Twitter, Facebook, and Shopify are among the companies that are allowing employees to work at home permanently. If the trend continues, there could be long-term reductions in oil use, congestion, and car pollution.
For weeks, we’ve been hearing that plummeting oil prices and dirt-cheap gasoline will kill electric vehicles. Now it appears the oil industry is the one whose future is in question. So, of course, President Trump is plotting a big bailout for Big Oil.
US oil futures plummeted below zero today due to the coronavirus pandemic. Loss of demand has pushed domestic storage tanks toward capacity.
On Sunday, oil-producing nations agreed to the largest production cut in history. Whether that will stabilize oil prices and the industry as a whole remains to be seen.
Russell Hardy, the CEO of Dutch energy and commodities company Vitol, the world’s largest independent oil trader, spoke with Bloomberg Markets: European Open this morning about the impact of the coronavirus on the oil markets as Congress finalizes the latest stimulus bill. What will energy get?
Russia refused to cut oil output quotas by up to 1.5 million barrels per day at a failed meeting on Friday between OPEC and non-OPEC nations. So in retaliation, Saudi Arabia will produce 2 million barrels per day at $6 to $7 a barrel into an already oversupplied global market. As a result, oil prices have dropped by a third today.
Great interview, not much new however if you follow Tesla and its CTO into the energy industry. Some interesting bits:
Why did Tesla act differently? For a start, it does not think of itself as a carmaker. “I see us more as an energy-innovation company,” says Jeffrey “JB” Straubel, the firm’s chief technology officer, and one of the co-founders of Tesla, along with Elon Musk, the chief executive. “If we can reduce energy-storage prices, it’s the most important thing we can do to make electric vehicles more prevalent,” says Mr Straubel. “Add in renewable power and I have a direct line of sight towards an entire economy that doesn’t need fossil fuels and doesn’t need to pay more to do it.”…
Mr Straubel met Mr Musk, a freshly minted multimillionaire from the sale of his PayPal digital-payments company to eBay. “One lunch was the beginning of what eventually became Tesla,” says Mr Straubel. “We spent most of the meal talking about electric aeroplanes. But as we were wrapping up, I said I was working on a fun crazy project with cars, trying to build a lithium-ion battery pack that could last 1,000 miles.”…
“Most other companies do not believe that battery volume will grow as fast as it’s going to,” Mr Straubel counters. “They don’t understand the tight linkage between cost and volume. We’re at this crossing-point where a small reduction in cost is going to result in a ridiculously big increase in volume, because the auto industry is so big.”…
“No one wishes we could come up with a technology that makes today’s chemistry obsolete more than me,” says Mr Straubel. “We could sell more cars at a lower price. But we’re not waiting.”