$100 bucks a barrel

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peakbagger

Minister of Fire
Jul 11, 2008
8,679
Northern NH
I am starting to see something that hasnt been around for awhile and that is renewable alternative fuels starting to nose back into the press. OPEC finally looks like its going to actively defend $100 a barrel and that means the economics of biofuels start to match up with oil. The propane association is pushing renewable propane (uses the same basestock as biodiesel). The Renewable Fuel Oil product that I worked with several years ago is looking at building a plant in the US (East Millinocket Maine) https://www.bangordailynews.com/202...wood-east-millinocket-biorefinery-joam40zk0w/ and some other tech is being dusted off. I recently saw a plug for Ethyl Levulinate https://www.oilheatsouthcarolina.com/2022/08/23/what-is-ethyl-levulinate/ . I dont see biodiesel being much of player as to date it depends on unsistainable Palm Oil plantations in Indonesia. The EU long ago banned palm oil based biodiesel so currently is going elsewhere. The Ensyn product is made from forestry and sawmill scrap (it can be made out of any cellulosic wastes). I think the Ethyl Levulinate fuels are also made from biomass.

All this tech depends on sustained high oil prices or carbon taxes to make it competitive. Once these supplies start getting built locally they will probably buidl a market but a sustained drop in oil prices will kill them.
 
And opec could next year could increase output to drive competition out of business like they did previously. Opec is a cartel.
 
OPEC has the problem that they need to bribe off their populations to allow the kleptocrats to keep pumping oil. That cost is going up, plus Russia needs a new army and equipment to match. They do not come cheap.
 
And opec could next year could increase output to drive competition out of business like they did previously. Opec is a cartel.
The cartel now includes Russia. That's the + in OPEC+. This is a political move timed before the US elections.
Though now maybe with increased pressure. Russia just blew $500 million in missiles today. They need cash flow.
 
Working with ChemE's I see all this bio feedstock alt fuels stuff a lot. On the academic side, it is pretty consistent.

I am skeptical that we can do much. I think there are some niche applications for substitution.
 
The Ensyn product is targeted at commercial and industrial use as it replaces #4 heating fuel. Its not a drop in, its mildly acidic so the storage and tankage needs to be upgraded to stainless. It also has a short shelf life. That said for its intended market, its got a niche that could expand due to its "green premium". Bates College in Lewiston Maine is district heating system looking for "green cred" so its probably a good fit. Its been a chicken and egg situation, the plants to make the product are claimed to be $200 million. They have a plant in Ottawa that supplied the facility in North Conway that I managed the conversion, but trucking was expensive. They built a plant on the North Shore of the Saint Lawrence in Quebec but that is also a long haul but my guess is it was subsidized with province money so they needed another plant in the US but I think they have been waiting for a long term higher oil price before building another facility. Reportedly, it also can be used as a blending feedstock for a refinery to make motor fuels but I dont think its been done commercially.

BTW, I did that one time conversion in North Conway and our firms went their separate ways so I have "no dogs in this fight" Being a first time project, no doubt it was a steep learning curve, and was not inexpensive to do and no doubt the cost was far above budget. I do drive by it on occasion and it still looking good, one of the few tangible projects in my career that didnt get torn down or sitting unused.
 
The cartel now includes Russia. That's the + in OPEC+. This is a political move timed before the US elections.
Though now maybe with increased pressure. Russia just blew $500 million in missiles today. They need cash flow.
Looks like the weapons sales to the Saudi’s aren’t a done deal.

How does the sustainable aviation (SAF) fuel push fit in? Seems like what ever advances they make could be utilized in the heating space. Are they two completely different markets and products?
 
In 2020, I was lamenting that I failed to move on selling a large sum of Exxon stock in 2019. Glad that I resisted the urge to sell then. Let it rise!

Assuming Putin's tantrum is not permitted to last indefinitely, oil prices will inevitably drop over the next decade or two, due to falling demand. Decades from now, prices will rise again, as the reduced economy of scale catches up and overwhelms the effect of falling demand. We've seen this in many commodity markets since the industrial age, today is just a blip on a very long timeline.

Those getting overly excited about alt fuels, and most specifically bio fuels, usually seem to fail to recognize the impact of scaling these solutions. Sometimes there is a legitimate advantage in just moving a problem from one place to another, no arguments there. But there will never be a solution where one tech eliminates all problems of another, without creating some new problems of its own, and it's frankly comical how many times headlines and news stories on this tech seem to ignore this reality. Ethanol may have improved emissions, but at the cost of increased food prices and rotting fuel lines. For some (esp. corn farmers and OPE manufacturers), it was a net win, but not exactly a cure for all that ails the general population.
 
In 2020, I was lamenting that I failed to move on selling a large sum of Exxon stock in 2019. Glad that I resisted the urge to sell then. Let it rise!

Assuming Putin's tantrum is not permitted to last indefinitely, oil prices will inevitably drop over the next decade or two, due to falling demand. Decades from now, prices will rise again, as the reduced economy of scale catches up and overwhelms the effect of falling demand. We've seen this in many commodity markets since the industrial age, today is just a blip on a very long timeline.

Those getting overly excited about alt fuels, and most specifically bio fuels, usually seem to fail to recognize the impact of scaling these solutions. Sometimes there is a legitimate advantage in just moving a problem from one place to another, no arguments there. But there will never be a solution where one tech eliminates all problems of another, without creating some new problems of its own, and it's frankly comical how many times headlines and news stories on this tech seem to ignore this reality. Ethanol may have improved emissions, but at the cost of increased food prices and rotting fuel lines. For some (esp. corn farmers and OPE manufacturers), it was a net win, but not exactly a cure for all that ails the general population.
And the bio feedstock solutions have (in genl) rather high habitat-loss impacts. While there are exceptions (like using a true 'waste product'), that will eventually take off their green sheen.
 
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