Future price of gasoline and buying of large SUVs

[Quark]

Money managers are diverting money away from oil exploration and plowing trillions into green energy. But the day when this transition has a meaningful impact on oil demand being many years away some are forecasting dwindling oil reserves and higher prices. At some point oil exploration may increase once again but until then gas prices may spike to never seen before levels.

How many have considered that buying a new SUV will become a money pit when it comes time to refill the tank. Will these become status symbols for brief Sunday drives as we return to compacts for daily commutes and errands. What happens to GM and Ford who depend on these money makers to fund future car designs. What fuel price would deter buying a large SUV, perhaps forego long trips requiring this kind of space and buying an electric car with limited range. Whatever we decide it's going to be a bumpy ride.

 

[Geotrash]

Money managers are diverting money away from oil exploration and plowing trillions into green energy. But the day when this transition has a meaningful impact on oil demand being many years away some are forecasting dwindling oil reserves and higher prices. At some point oil exploration may increase once again but until then gas prices may spike to never seen before levels.

How many have considered that buying a new SUV will become a money pit when it comes time to refill the tank. Will these become status symbols for brief Sunday drives as we return to compacts for daily commutes and errands. What happens to GM and Ford who depend on these money makers to fund future car designs. What fuel price would deter buying a large SUV, perhaps forego long trips requiring this kind of space and buying an electric car with limited range. Whatever we decide it's going to be a bumpy ride.

I'm a petroleum geologist by education and spent the first several years of my career in oil exploration. "Peak oil" has been forecast by reserve estimators (eg, Colin Campbell) for years, but continuous improvement in exploration (especially 3D seismic) and extraction (horizontal drilling, fracking) have so far kept us ahead of the curve.

I tend to think the opposite will be true. The legislation on the books today will prove far more optimistic than demand reality. And while the automakers will dutifully continue their shift toward electric propulsion, the result will be an oversupply of electric vehicles and the demand, for at least the next 30 years, will still sway toward liquid (fossil and plant-based) fuels. I predict that as that reality approaches, the demand for used gasoline and diesel-powered large SUVs will reman strong, even as supplies of new ones dwindle. Your 2021 could well be worth more than half of its selling price in 15 years (after the new rules have kicked in) if well cared for.

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." -Milton Friedman

 

[Rocket Man]

I’m not worried. I’ll be dead before gas gets expensive enough to matter to me.

 

[TollKeeper]

I am worried about the fuel prices, as I think its going to more "international conflicts". But the EV market is horrible on offerings that dont feel like they just wouldnt accomplish what I need.

I am keeping an eye on the Rivian R1S/R1T, but they havent even hit the market yet, and I think the R1T is being rebadged to the Ford Maverick.

 

[Bill 1960]

Whether you’re discussing revenue producing investments, real property, or depreciating assets it never pays to follow the herd. Most of what passes for info is just advertorials or outright propaganda these days. Everyone is selling some narrative. Joe Friday is long gone.

I believe we’re in a relatively benign period for auto enthusiasts. When have we ever had a broader choice of vehicles? You can buy anything you want. Diesel, gas, hybrid, electric, it’s all on the menu. Gas guzzler, trucks, 700hp cars, 50 mpg economy cars and everything in between.

Petroleum has just in the recent past been so cheap they were pumping it out of the ground at a loss. As alternative transport energy sources come online I don’t see any market force driving petroleum radically higher.

And electricity will be just fine too, unless you’re lucky enough to live in cuckoo land (California). Every day more solar and wind comes online. And what pairs well with wind and solar? Storage. What does an EV have? Storage. Someday a company will get rich bundling renewable power sources with EV charging during peak production and EV returning power to the grid during peak demand.

 

[bill1013]

In my opinion the trend to get away from gas & oil has nothing to do with supply or availability as it is where most of the oil is buried. And that's the Middle East. We, the U.S., have been trying to wean ourselves off of Middle East oil for decades now. Why? It's a very unstable region and our money is going to these states that have anti-Western feelings at an extreme fashion. I remember there was a headline taken from an editorial which basically said, "If you drive an SUV...YOU ARE SUPPORTING TERRORISM AND ARE A TERRORIST YOURSELF!" Being the mild mannered, level headed guy that I am called, "********!! During the 70s we had gas rationing, remember? Why? Because the oil barons of the Middle East drastically cut the tap off. They stopped pumping oil out of the ground, lessening supply and causing the price of gas to go through the roof...if you were lucky enough to get it. So began the U.S. search for another oil source. With the recent unrest in the Middle East oil is not a given and economically speaking we're tired of giving them money to spawn their anti-western rants. It's a case of politics, economics and cut throat business and has nothing to do with the availability of oil or pollution or any other BS.

 

[Geotrash]

Whether you’re discussing revenue producing investments, real property, or depreciating assets it never pays to follow the herd. Most of what passes for info is just advertorials or outright propaganda these days. Everyone is selling some narrative. Joe Friday is long gone.

I believe we’re in a relatively benign period for auto enthusiasts. When have we ever had a broader choice of vehicles? You can buy anything you want. Diesel, gas, hybrid, electric, it’s all on the menu. Gas guzzler, trucks, 700hp cars, 50 mpg economy cars and everything in between.

Petroleum has just in the recent past been so cheap they were pumping it out of the ground at a loss. As alternative transport energy sources come online I don’t see any market force driving petroleum radically higher.

And electricity will be just fine too, unless you’re lucky enough to live in cuckoo land (California). Every day more solar and wind comes online. And what pairs well with wind and solar? Storage. What does an EV have? Storage. Someday a company will get rich bundling renewable power sources with EV charging during peak production and EV returning power to the grid during peak demand.

You know, your thoughts about EV’s being wonderful sources of storage for renewable energy has a lot of merit. I hadn’t thought of that before. Brilliant.

 

[George B]

You know, your thoughts about EV’s being wonderful sources of storage for renewable energy has a lot of merit. I hadn’t thought of that before. Brilliant.

I hadn’t either. It’s one of those things that turned a light bulb on for me. My fleet goes for weeks or months without driving the full range of an EV. Most of the time they would be plugged in.

 

[FrankU]

 

[Fireman591]

I find it ironic that the car companies think they can tell the consumers what they are going to purchase. The gas and diesel large SUVs are going no where because demand will remain high. Any company that follows through with full electrification before range increases and the speed of charging decreases will suffer big time financially and most likely get bought out by another company. Not sure who is pulling all the strings on this green push but it is slowly going to destroy the USA economy if voters and lawmakers don't wake up. Inflation and recessions will be the new norm in the near future.