"We Don't Plan to Lose Money."

March 7, 2020 10:38 AM

Shell Has a Plan to Profit from Climate Change (Malcolm Harris, author of 'Kids These Days: Human Capital and the Making of Millennials' (previously), for New York)
posted by box (19 comments total)

This is a good article, thank you for posting!

It’s important to remember that these people aren’t stupid, and that they will respond to the incentives they’re under.

If you’re working for a big energy company, and aware that climate change is real, and want to try to make things better, what are you going to do? You’re either going to quit (and then what?)... Or you’re going to try to bend your company in a direction that takes climate change into account. But even a somewhat-positive “green” direction is going to include finding ways for the company to benefit and to avoid damaging existing business too much, because that’s what you’re being paid for. You can’t realistically expect people at these organizations to make them self-destruct intentionally.

Personally, that’s why I think our climate change strategy should include nationalizing the large energy companies, rather than letting them convert to green companies in a fashion most beneficial to them. These companies are incredibly valuable repositories of infrastructure and expertise, but they need to be controlled directly if we want them to act in a manner against their own self interest.
posted by a device for making your enemy change his mind at 11:47 AM on March 7, 2020 [30 favorites]

Speaking as a Leaf driver, I think LG et al. are going to drink Big Oil’s milkshake this decade and finish ‘em off as going concerns next.

Half of US oil consumption used for transportation is light vehicles, when they go BEV the price of gasoline will necessarily fall to the cost of production.

At a notional 42mpg and 20c/kWh PG&E charge cost my Leaf is costing me the equivalent of $2/gallon when I drive in-town (intercity travel is still priced at parity to gasoline’s $3/gal), while having in-town performance that obliterates any econobox on the road now.
posted by Heywood Mogroot III at 12:14 PM on March 7, 2020 [2 favorites]

>If you’re working for a big energy company, and aware that climate change is real, and want to try to make things better, what are you going to do?

You invest heavily in renewables and storage and keep the fossils in the ground. Anything else is complete and utter bullshit.
posted by Twang at 1:09 PM on March 7, 2020 [9 favorites]

There is no viable alternative to liquid fuels for long distance air travel on the horizon. While alternatives to diesel for ships, locomotives, and farm tractors are conceivable, too, oil cannot go away completely in any near-term timeframe without the starvation of hundreds of millions of people.

So absolutely push these companies to do better. There are a lot of bright people, and there is a lot of infrastructure in these companies. Let’s take advantage of their human and physical resources.
posted by haiku warrior at 1:21 PM on March 7, 2020 [5 favorites]

So absolutely push these companies to do better.

I think you might need a stronger verb than that, though I suppose pushing is still the word for what, say, a bulldozer does. You're not exactly wrong it's just well past time to let "push" mean "nudge" is what I'm saying.
posted by atoxyl at 1:37 PM on March 7, 2020

There is no viable alternative to liquid fuels for long distance air travel on the horizon.

Long-haul trucks are a complicated matter, too. The Long Haul Towards Decarbonizing Road Freight (Science Trends, 2018)

While freight is a key player in global energy demand, there has been a lack of focus set on the road freight sector relative to others. For example, of the 133 submitted Intended Nationally Determined Contributions (INDCs), which represent national mitigation and adaption plans of 160 countries intended to comply with the ambitions set by COP21, only 13% mention freight while 61% mention passenger transport [6]. In a further comparison against passenger cars, standards mandating minimum fuel economy of new sales of heavy-duty road freight vehicles in 2015 covered about 50% of heavy-duty truck sales, while fuel economy standards for light-duty vehicles covered more than 80% of sales [7,8].

Electric Trucks to be Tiny Part of Market for Years, Report Says (Trucks.com, recapping Wards Intelligence tech report, 2019)

The battery pack necessary to support long-haul road freight will weight a lot, which cuts down on how much can be hauled (as trucks are weight-limited, so transportation engineers can plan roads and bridges accordingly). Decreased loads per truck means more trucks on the roads.
posted by filthy light thief at 2:20 PM on March 7, 2020 [4 favorites]

Trucks and aircraft prefer liquid fuels to batteries because the weight of the fuel decreases as energy is consumed, but not the weight of batteries. The renewable solution for them is biofuels (some kind of crop + sun + water) and fuel cells (nuclear/solar/wind/etc. + water).
posted by MattD at 3:21 PM on March 7, 2020 [3 favorites]

It should be said that at scale to be truly renewable both biofuels and fuel cells presume that there's a cheap and abundant baseline source of renewable electricity, because you need a lot of fresh water and a lot of inefficient industrial process and transportation to make them and get them to the fueling station point.
posted by MattD at 3:23 PM on March 7, 2020

https://www.eia.gov/todayinenergy/detail.php?id=17171 shows air travel is 9% of fuel use in the USA, heavy-duty 18%, so these aren't the big problems in this picture.

One thing about OTR BEV trucking that interests me is the future cost savings available to trucking operators who go electric.

Granted, in the future the demand pattern of that chart is going to invert and truckers are going to be the majority consumers of the supply of the coming oil glut since diesel is a pretty good fuel for them, all most [save for the future, but fuck that, right??] things considered.

Anyhoo, in budgeting out my future 2-3 week long excursions in my soon-to-be-mine Cybertruck I was struck by how CHEAP Tesla's charging is vs $2.50 diesel, like say a F-250 with Ford's spiffy Power Stroke® V8 Turbo Diesel that gets around 12mpg.

I'm guessing the '500 mile' Cybertruck is going to have 160 kWh of batteries and Tesla's "Version 3" superchargers will give me a 20% ⇨ 80% charge in about a half an hour [assuming one's available on arrival!], so that's a half-hour pit stop every 300 miles or 4-5 hours of driving. That sounds pretty great to me and even better is Tesla's 28c/kWh pump price -- that 100kWh of charging will cost under $30, vs the $50+ of diesel burned every 300 miles in the SuperDuty.

For trucks, if you double the time to one hour charging (for every 4 hours of driving remember), and triple the fuel costs due to the single-digit MPGs of big rigs, you get a $100 recharge cost vs. $150 of diesel burned for the same distance.

I'm have no idea how much OTR truckers make, but even paying them $50/hr to take one of their DOT-mandated rest breaks every 4 hours while their truck goes from 20% to 80% SOC pencils out as damn economic to me!

Diesel proponents might counter-argue 'oh-noes the trip times' but mitigating the cost of the possibly-increased trip time is the greatly increased service life of the BEV tractors vs. the traditional dirty diesel burner.

Trucking labor costs are no doubt going to $0 right along with diesel costs this century so it's an interesting picture. One thing related to that I wish in retrospect is that instead of the stupid HSR for California (nobody's going to ride it) we had put the money into the most future-proof trucking corridor (i.e. alternative to I-5/I-99) between LA/SF/Redding we could devise. A pro-only trucking highway would be pretty great, and designing self-driving vehicle technology in parallel WITH the actual road they're driving on seems like a much more doable approach vs whatever the heck Elon's minions are trying to pull off.
posted by Heywood Mogroot III at 6:10 PM on March 7, 2020 [1 favorite]

Long-haul trucks are a complicated matter, too.

Interesting that trains aren't mentioned above. I think trains are already quite a bit more efficient than trucks. Sometimes slowness is an advantage.
posted by sneebler at 6:22 PM on March 7, 2020 [1 favorite]

Maybe Amazon will be HSR's main customer eventually : ) Gonna suck to put billions into new tracks & ROWs that have trains pass every hour or three otherwise.
posted by Heywood Mogroot III at 6:25 PM on March 7, 2020

Oh yeah, relevant to the article, let's not forget who helped kill the first second*-gen of electric cars! (here's hoping the genie's well and truly out of the bottle now!)

* I always forget that BEV predates Henry Ford!
posted by Heywood Mogroot III at 6:35 PM on March 7, 2020 [2 favorites]

Half of US oil consumption used for transportation is light vehicles

You missed the memo where Shell and Formosa and others are building.immense ethylene crackers to increase plastics consumption / redirect demand.yes?
posted by eustatic at 6:50 PM on March 7, 2020

Long haul trucking is one area where a switch to electric might be feasible rather quickly, once the electric costs less diesel. Fuel costs are so large relative to cost of the vehicles that it is worthwhile buy a new fleet rather than keep the old one. That contrasts with personal transportation, where lifetime cost of fuel is only a fraction of the cost of the vehicle in virtually all cases.
posted by haiku warrior at 6:52 PM on March 7, 2020 [1 favorite]

Rail transport of freight is much more efficient than trucks, but it doesn’t get you door to door. Trucks still needed for delivery from freight yards.

Surprisingly, much more freight is shipped by rail in the US than in Europe. So Europe has a better *passenger* rail network, but uses trucks much more to ship goods.
posted by haiku warrior at 6:57 PM on March 7, 2020

I'm have no idea how much OTR truckers make, but even paying them $50/hr to take one of their DOT-mandated rest breaks every 4 hours while their truck goes from 20% to 80% SOC pencils out as damn economic to me!

Electrification looks profitable (according to someone selling truck rapid-chargers ;)), except they'd have to stop more often to charge. Here is a summary of the current Hours of Service for truckers. In short, they have to stop at least every eight hours, for at least 30 minutes. If battery weight wasn't an issue (it is an issue, and could eat 10% of the allowable gross vehicle weight [PDF], per that report from Transport Environment, looking at EU regulations), truckers would have to stop every 5-6 hours, looking at the Tesla Semi (Wikipedia) and 70 mph as an easy number for calculations.

And now, the Federal Motor Carrier Safety Administration is making hours of service more flexible, because trucker typically want to stop less, not more. I'm not sure where the cost-savings of possibly 1/3rd less for fuel would fare compared to more stops for longer periods. There's still a shortage of truck drivers, so it wouldn't be an issue of getting out-bid for jobs if you took an hour longer than your competition, as I understand it.
posted by filthy light thief at 7:40 PM on March 7, 2020 [2 favorites]

The oil companies are not stupid. They see long term how things are going. They realize that they are tomorrow's tobacco companies. That they are close to or past the point of social acceptance. The smarter ones are trying to find ways to change - but turning the battleship is hard. I think all of them grossly underestimate how quickly things are going to change. I highly recommend the blog post Bankruptcy in two ways - 'gradually and then suddenly' for a great explanation of what is likely to happen. That said, these companies have vast resources and the more we can encourage them to apply those in pursuit of positive climate goals the better. Good government policy signals can be very effective here and there are some good example from California State government to look at.

The Low Carbon Fuel Standard (LCFS) has effectively placed a price of $200/ton CO2 on high carbon intensity transport fuels (diesel and gasoline) that in turn funds development of replacement low carbon intensity fuels (BEV charging, biofuels, hydrogen etc). It is designed to continually lower the carbon intensity of transport fuels (at least until 2030 in the current rule) using a market based approach that has survived court challenges and that the fossil industry have reluctantly bought into. Frankly the program is a piece of legislative genius that California should be justly proud of.

Additionally California is throwing its economic weight behind a push to force transit and heavy-duty freight towards a zero-emission future. The Innovative Clean Transit Rule mandates ALL transit must be zero-emission by 2040. There is a bevy of programs designed to help transit agencies meet this mandate. There is a second regulation close to finalization called the Advanced Clean Trucks Rule that will force adoption of zero-emission freight starting in 2024! These regulations create markets for the vehicles which spurs their development (making them available for everybody else outside California) and in turn creates demand for fueling solutions. More than anything - California has adopted a "Zero means Zero" approach. The focus is on science driven pathways to true zero-carbon solutions. As the saying goes, "As goes California, so goes the world..." and that is the world the oil giants will find themselves living in.

Lastly a word on heavy-duty transportation. Batteries will have some part to play in shorter distance, fixed routes where weight is not an issue (i.e. load is volume limited not weight limited). However for long distance heavy freight by road or rail hydrogen fuel-cells are the clear winner. There are some really cutting edge demonstrations happening in California (Port of Long Beach) helping to make this a reality and of course many of you may have heard of Nikola. It's an exciting time to be working in this field.
posted by Long Way To Go at 8:57 PM on March 7, 2020 [3 favorites]

And now, the Federal Motor Carrier Safety Administration is making hours of service more flexible, because trucker typically want to stop less, not more.

Trucking companies want their drivers to stop less, and they craft the rules and pay incentives so that drivers feel pressured (or are legally obligated) to stop less. That pressure carries over to owner-operators. It would not be a bad thing if, as part of electrification, drivers worked more humane hours across the board.
posted by jedicus at 6:55 AM on March 8, 2020 [3 favorites]

While alternatives to diesel for...locomotives...are conceivable,

A bit more than conceivable, 25% of lines worldwide are already electrified.
posted by biffa at 2:48 AM on March 9, 2020