Chitchat Singapore Inc's Wrong Bet on O&G Services Industry

[Pinkieslut]

WHY ARE WE BETTING ON AN INDUSTRY WITH THE FOLLOWING CHARACTERISTICS?

1. PEAK OIL IN THE 2000 PERIOD - ALOT OF ALTERNATIVE ENERGIES LIKE SOLAR, WIND AND NUCLEAR (IN THE FUTURE FUSION POWER) IS COMING UP. COSTS OF EXTRACTING OIL WILL ONLY GO UP.
2. INDUSTRY THAT IS OVERCROWDED BY OTHER ASIAN COMPETITORS LIKE THE KOREANS, PRCS, JAPANESE, ETC. DOES THE IP OR KNOWLEDGE DEVELOPED USEFUL FOR OTHER BUSINESSES IN THE FUTURE?
3. HEAVY CAPITAL OUTLAY PROJECT BASED SERVICES - HAVE TO PUT IN A LOT OF MONEY TO RUN THE PROJECTS BEFORE ONE COLLECTS THE MONEY.
4. WORKER INTENSIVE - NEED LOTS OF TECHNICIANS AND EVEN UNSKILLED WORKERS. HARSH WORKING CONDITIONS. END UP HAVING TO MASS IMPORT LABOUR FROM 3RD WORLD COUNTRIES.

straitstimes.com
More to come after Swiber, warn analysts
JACQUELINE WOO

With low oil prices continuing to weigh heavily on offshore and marine companies worldwide, the deep troubles of mainboard-listed Swiber Holdings could be the start of more to come.

The debt-laden offshore services firm, which faces letters of demand amounting to US$50.5 million (S$67.7 million), initially filed to wind up and liquidate its business in a move that shocked the market last week. Late Friday, it switched tack and said it will put itself under judicial management instead - an option that offers at least some light at the end of the tunnel.

Analysts believe the hard-hit sector could see more such casualties.

KGI Fraser Securities analyst Joel Ng told The Straits Times that firms with a substantial amount of debt and weak cash flow are particularly vulnerable to funding problems.

$1.4b

Amount in Singdollar bonds that oil-related companies have maturing up to 2018.

$325m

Amount due by the end of the year.

"These are mainly companies that invested during the peak of the oil boom, just before oil prices crashed in the second half of 2014," said Mr Ng. "There just isn't enough cash to go around, given the 20 to 30 per cent capital expenditure cuts across the sector over the past two years, so profit margins have been eroded. Companies are operating at break-even levels just to obtain work to repay the interest on their debt, which is similar to what Swiber went through."

Amid the weak demand and activity levels in the industry, it is "very difficult" for companies to raise cash by selling their assets.

"Potential buyers are waiting for prices to fall even more to scoop up cheap assets," he said.

Mr Roger Tan, chief executive of Voyage Research, added that loans for quite a few companies here will be due in the next few years. "Given the current conditions, refinancing these loans will be difficult," he said.

Already, SGX-listed Pacific Radiance, which owns and operates offshore vessels and provides subsea services to the oil and gas industry, expects its full-year financial results to be directly affected by Swiber's surprise move.

The firm said on Friday it might not be able to recover about US$10.1 million it lent to Swiber's units.

Earlier this month, Technics Oil and Gas and its unit were placed under judicial management after facing a series of claims. The plight of the company, which specialises in building modules and equipment for use in oil and gas exploration and production activities, had less of an impact as its market cap was only around $16.2 million compared with Swiber's $50 million.

Oil-related companies have $1.4 billion worth of Singdollar bonds maturing up to 2018, with $325 million due by the end of the year, according to Bloomberg data. Ausgroup and Otto Marine are among those in the sector that have started a process to loosen bond vows this year.

Shake-out can weed out excess capacity

Others with a high net-debt-to- equity ratio (a measure of a firm's debt) include Swissco Holdings, Ezion Holdings, Ezra Holdings and Marco Polo Marine.

Ezra Holdings - once a market darling - provides offshore marine services to oil and gas players. It has had consecutive quarters of losses, and there was speculation that banks were going to pull the plug earlier this year.

The group's Lee family was reported in March to be selling its Sentosa Cove bungalow, after disposing of a Good Class Bungalow in Windsor Park Road last October for $22 million.

That said, Mr Tan noted there are bright spots amid the gloom, as a shake-out could remove the excess capacity in the industry and bring about consolidation among the players.

Investors can also stand to gain. "The tide is down and those not wearing their pants will be exposed, but good companies will also be priced below their potential future value," he said.

"Good strategy, a strong balance sheet and high value-price differential are signs of a good investment opportunity. Investors have to ride out the storm first."

 

[frenchbriefs]

If oil is at peak oil in 2000,it means oil prices will only get higher.oil prices at $50 is only proof that fracking is unsustainable.renewables whil growing are not an immediate threat yet for the world's love affair with fossil fuels.

 

[Pinkieslut]

The Future of Oil Is Here—and It Doesn’t Look Pretty
By Michael T. KlareTwitter March 8, 2016
APTOPIX Eagle Shale Impact

A drilling rig in Kenedy, Texas (AP Photo / Eric Gay)

Three and a half years ago, the International Energy Agency (IEA) triggered headlines around the globe by predicting that the United States would overtake Saudi Arabia to become the world’s leading oil producer by 2020 and, together with Canada, would become a net exporter of oil around 2030. Overnight, a new strain of American energy triumphalism appeared and experts began speaking of “Saudi America,” a reinvigorated USA animated by copious streams of oil and natural gas, much of it obtained through the then-pioneering technique of hydro-fracking. “This is a real energy revolution,” The Wall Street Journal crowed in an editorial heralding the IEA pronouncement.

This article originally appeared at TomDispatch.com. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com.

The most immediate effect of this “revolution,” its boosters proclaimed, would be to banish any likelihood of a “peak” in world oil production and subsequent petroleum scarcity. The peak oil theorists, who flourished in the early years of the 21st century, warned that global output was likely to reach its maximum attainable level in the near future, possibly as early as 2012, and then commence an irreversible decline as the major reserves of energy were tapped dry. The proponents of this outlook did not, however, foresee the coming of hydro-fracking and the exploitation of previously inaccessible reserves of oil and natural gas in underground shale formations.

Understandably enough, the stunning increase in North American oil production in the past few years simply wasn’t on their radar. According to the Energy Information Administration (EIA) of the Department of Energy, US crude output rose from 5.5 million barrels per day in 2010 to 9.2 million barrels as 2016 began, an increase of 3.7 million barrels per day in what can only be considered the relative blink of an eye. Similarly unexpected was the success of Canadian producers in extracting oil (in the form of bitumen, a semisolid petroleum substance) from the tar sands of Alberta. Today, the notion that oil is becoming scarce has all but vanished, and so have the benefits of a new era of petroleum plenty being touted, until recently, by energy analysts and oil company executives.

“The picture in terms of resources in the ground is a good one,” Bob Dudley, the chief executive officer of oil giant BP, typically exclaimed in January 2014. “It’s very different [from] past concerns about supply peaking. The theory of peak oil seems to have, well, peaked.”
The Arrival of a New Energy Triumphalism

With the advent of North American energy abundance in 2012, petroleum enthusiasts began to promote the idea of a “new American industrial renaissance” based on accelerated shale oil and gas production and the development of related petrochemical enterprises. Combine such a vision with diminished fears about reliance on imported oil, especially from the Middle East, and the United States suddenly had—so the enthusiasts of the moment asserted—a host of geopolitical advantages and fresh life as the planet’s sole superpower.

“The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere,” oil industry adviser Daniel Yergin proclaimed in The Washington Post. “The new energy axis runs from Alberta, Canada, down through [the shale fields of] North Dakota and South Texas…to huge offshore oil deposits found near Brazil.” All of this, he asserted, “points to a major geopolitical shift,” leaving the United States advantageously positioned in relation to any of its international rivals.

If the blindness of so much of this is beginning to sound a little familiar, the reason is simple enough. Just as the peak oil theorists failed to foresee crucial technological breakthroughs in the energy world and how they would affect fossil fuel production, the industry and its boosters failed to anticipate the impact of a gusher of additional oil and gas on energy prices. And just as the introduction of fracking made peak oil theory irrelevant, so oil and gas abundance—and the accompanying plunge of prices to rock-bottom levels—shattered the prospects for a US industrial renaissance based on accelerated energy production.

As recently as June 2014, Brent crude, the international benchmark blend, was selling at $114 per barrel. As 2015 began, it had plunged to $55 per barrel. By 2016, it was at $36 and still heading down. The fallout from this precipitous descent has been nothing short of disastrous for the global oil industry: many smaller companies have already filed for bankruptcy; larger firms have watched their profits plummet; whole countries like Venezuela, deeply dependent on oil sales, seem to be heading for receivership; and an estimated 250,000 oil workers have lost their jobs globally (50,000 in Texas alone).

In addition, some major oil-producing areas are being shut down or ruled out as likely future prospects for exploration and exploitation. The British section of the North Sea, for example, is projected to lose as many as 150 of its approximately 300 oil and gas drilling platforms over the next decade, including those in the Brent field, the once-prolific reservoir that gave its name to the benchmark blend. Meanwhile, virtually all plans for drilling in the increasingly ice-free waters of the Arctic have been put on hold.

Many reasons have been given for the plunge in oil prices and various “conspiracy theories” have arisen to explain the seemingly inexplicable. In the past, when prices fell, the Saudis and their allies in the Organization of the Petroleum Exporting Countries would curtail production to push them higher. This time, they actually increased output, leading some analysts to suggest that Riyadh was trying to punish oil producers Iran and Russia for supporting the Assad regime in Syria. New York Times columnist Thomas Friedman, for instance, claimed that the Saudis were trying to “bankrupt” those countries “by bringing down the price of oil to levels below what both Moscow and Tehran need to finance their budgets.” Variations on this theme have been advanced by other pundits.

The reality of the matter has turned out to be significantly more straightforward: US and Canadian producers were adding millions of barrels a day in new production to world markets at a time when global demand was incapable of absorbing so much extra crude oil. An unexpected surge in Iraqi output added additional crude to the growing glut. Meanwhile, economic malaise in China and Europe kept global oil consumption from climbing at the heady pace of earlier years and so the market became oversaturated with crude. It was, in other words, a classic case of too much supply, too little demand, and falling prices. “We are still seeing a lot of supply,” said BP’s Dudley last June. “There is demand growth, there’s just a lot more supply.”
A War of Attrition

Threatened by this new reality, the Saudis and their allies faced a painful choice. Accounting for about 40 percent of world oil output, the OPEC producers exercise substantial but not unlimited power over the global marketplace. They could have chosen to rein in their own production and so force prices up. There was, however, little likelihood of non-OPEC producers like Brazil, Canada, Russia, and the United States following suit, so any price increases would have benefited the energy industries of those countries most, while undoubtedly taking market share from OPEC. However counterintuitive it might have seemed, the Saudis, unwilling to face such a loss, decided to pump more oil. Their hope was that a steep decline in prices would drive some of their rivals, especially American oil frackers with their far higher production expenses, out of business. “It is not in the interest of OPEC producers to cut their production, whatever the price is,” Saudi Oil Minister Ali al-Naimi explained. “If I reduce [my price], what happens to my market share? The price will go up and the Russians, the Brazilians, US shale oil producers will take my share.”

In adopting this strategy, the Saudis knew they were taking big risks. About 85 percent of the country’s export income and a staggeringly large share of government revenues come from petroleum sales. Any sustained drop in prices would threaten the royal family’s ability to maintain public stability through the generous payments, subsidies, and job programs it offers to so many of its citizens. However, when oil prices were high, the Saudis socked away hundreds of billions of dollars in various investment accounts around the world and are now drawing on those massive cash reserves to keep public discontent to a minimum (even while belt-tightening begins). “If prices continue to be low, we will be able to withstand it for a long, long time,” Khalid al-Falih, the chairman of Saudi Aramco, the kingdom’s national oil company, insisted in January at the World Economic Forum in Davos, Switzerland.

The result of all this has been an “oil war of attrition”—a struggle among the major oil producers for maximum exposure in an overcrowded energy bazaar. Eventually, the current low prices will drive some producers out of business and so global oversupply will assumedly dissipate, pushing prices back up. But how long that might take no one knows. If Saudi Arabia can indeed hold out for the duration without stirring significant domestic unrest, it will, of course, be in a strong position to profit when the price rebound finally occurs.

It is not yet certain, however, that the Saudis will succeed in their drive to crush shale producers in the United States or other competitors elsewhere before they drain their overseas investment accounts and the foundations of their world begin to crumble. In recent weeks, in fact, there have been signs that they are beginning to get nervous. These include moves to reduce government subsidies and talks initiated with Russia and Venezuela about freezing, if not reducing, output.
An Oil Glut Unleashes “World-Class Havoc”

In the meantime, there can be no question that the war of attrition is beginning to take its toll. In addition to hard-hit Arctic and North Sea producers, companies exploiting Alberta’s Athabasca tar sands are exhibiting all the signs of an oncoming crisis. While most tar sands outfits continue to operate (often at a loss), they are now postponing or canceling future projects, while the space between the future and the present shrinks ominously.

Just about every firm in the oil business is being hurt by the new price norms, but hardest struck have been those that rely on “unconventional” means of extraction like Brazilian deep-sea drilling, US hydro-fracking, and Canadian tar sands exploitation. Such techniques were developed by the major companies to compensate for an expected long-term decline in conventional oil fields (those close to the surface, close to shore, and in permeable rock formations). By definition, unconventional or “tough oil” requires more effort to pry out of the ground and so costs more to exploit. The break-even point for tar sands production, for example, sometimes reaches $80 per barrel, for shale oil, typically $50 to $60 a barrel. What isn’t a serious problem when oil is selling at $100 a barrel or more becomes catastrophic when it languishes in the $30 to $40 range, as it has over much of the past half-year.

And keep in mind that, in such an environment, as oil companies contract or fail, they take with them hundreds of smaller companies—field services providers, pipeline builders, transportation handlers, caterers, and so on—that benefited from the all-too-brief “energy renaissance” in North America. Many have already laid off a large share of their workforce or simply been driven out of business. As a result, once-booming oil towns like Williston, North Dakota, and Fort McMurray, Alberta, have fallen into hard times, leaving their “man camps” (temporary housing for male oil workers) abandoned and storefronts shuttered.

In Williston—once the epicenter of the shale oil boom—many families now line up for free food at local churches and rely on the Salvation Army for clothes and other necessities, according to Tim Marcin of the International Business Times. Real estate has also been hard hit. “As jobs dried up and families fled, some residential neighborhoods became ghost towns,” Marcin reports. “City officials estimated hotels and apartments, many of which were built during the boom, were at about 50-60% occupancy in November.”

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Add to this another lurking crisis: The failure or impending implosion of many shale producers is threatening the financial health of American banks that lent heavily to the industry during the boom years from 2010 to 2014. Over the past five years, according to financial data provider Dealogic, oil and gas companies in the United States and Canada issued bonds and took out loans worth more than $1.3 trillion. Much of this is now at risk as companies default on loans or declare bankruptcy. Citibank, for example, reports that 32 percent of its loans in the energy sector were given to companies with low credit ratings, which are considered at greater risk of default. Wells Fargo says that 17 percent of its energy exposure was to such firms. As the number of defaults has increased, banks have seen their stock values decline, and this—combined with the falling value of oil company shares—has been rattling the stock market.

The irony, of course, is that the technological breakthroughs so lauded in 2012 for their success in enhancing America’s energy prowess are now responsible for the market oversupply that is bringing so much misery to people, companies, and communities in North America’s oil patches. “At the beginning of 2014, [the United States] was pumping so much oil and gas that experts foresaw a new American industrial renaissance, with trillions of dollars in investments and millions of new jobs,” commented energy expert Steve LeVine in February. Two years later, he points out, “faces are aghast as the same oil instead has unleashed world-class havoc.”
The Geopolitical Scorecard From Hell

If that promised new industrial renaissance has failed to materialize, what about the geopolitical advantages that new oil and gas production was to give an emboldened Washington? Yergin and others asserted that the surge in North American output would shift the center of gravity of world production to the Western Hemisphere, allowing, among other things, the export of US liquefied natural gas (LNG) to Europe. That, in turn, would diminish the reliance of allies like Germany on Russian gas and so increase American influence and power. We were, in other words, to be in a new triumphalist world in which the planet’s sole superpower would benefit greatly from, as energy analysts Amy Myers Jaffe and Ed Morse put it in 2013, a “counterrevolution against the energy world created by OPEC.”

So far, there is little evidence of such a geopolitical bonanza. In Saudi attrition-war fashion, for instance, Russia’s natural gas giant Gazprom has begun lowering the price at which it sells gas to Europe, rendering American LNG potentially uncompetitive in markets there. True, on February 25, the first cargo of that LNG was shipped to foreign markets, but it was destined for Brazil, not Europe.

Meanwhile, Brazil and Canada—two anchors of the “new world oil map” predicted by Yergin in 2011—have been devastated by the oil price decline. Production in the United States has not yet suffered as greatly, thanks largely to increased efficiency in the producing regions. However, pillars of the new industry are starting to go out of business or are facing possible bankruptcy, while in the global war of attrition, the Saudis have so far retained their share of the market and are undoubtedly going to play a commanding role in global oil deals for decades to come (assuming, of course, that the country doesn’t come apart at the seams under the strains of the present oil glut). So much for the “counterrevolution” against OPEC. Meanwhile, the landscapes of Texas, Pennsylvania, North Dakota, and Alberta are increasingly littered with the rusting detritus of a brand-new industry already in decline, and American power is no more robust than before.

In the end, the oil attrition wars may lead us not into a future of North American triumphalism, nor even to a more modest Saudi version of the same, but into a strange new world in which an unlimited capacity to produce oil meets an increasingly crippled capitalist system without the capacity to absorb it.

Think of it this way: In the conflagration of the take-no-prisoners war the Saudis let loose, a centuries-old world based on oil may be ending in both a glut and a hollowing out on an increasingly overheated planet. A war of attrition indeed.

 

[scroobal]

I don't think it had anything to do with poor planning or betting on the wrong thing. Oil & Gas became a saviour of sorts when we had to wind down our highly labour intensive shipbuilding and repair industry. It was also service and logistics orientated and there was already a smaller but established provisioning base for American drilling interest in the region. Loyang became the hub and did very well since the early 80s. So nearly 35 years of a great ride.

Folks like the Ezra founders made their fortune years ago on the back of the O&G. Its now for the second generation to find another opportunity.

As for the government, it really needs to get its head our of the sand and start planning for new industries and more employment opportunities for Singapore. They certainly need to stop spinning stories to the compliant press about how jobs are and pretending that all is hunky dory.

 

[Pinkieslut]

A Saudi Aramco IPO? Why You Should Steer Clear | Investopedia
Dan Moskowitz

It has been reported that Saudi Arabia is considering floating shares of its state-run oil monopoly Saudi Aramco. If this opportunity becomes a reality, should you take advantage? As of last year, foreign investors are allowed to participate in the Saudi Arabian stock market. But it’s also possible that Saudi Aramco will be listed in the United States.
The Beginning, Middle and End

Saudi Aramco began as four American companies joining together in 1933. The Saudi government bought a 25% stake in 1973, followed by a 100% stake in 1980. The Saudis soon after, in 1985, changed their oil production policy in order to defend market share. The same thing is taking place now and it’s an obvious attempt to drive competitors out of the market in order to increase market share. Saudi Arabia has no interest in cutting production because it’s the second-lowest cost producer behind Kuwait. The only other countries that can produce oil and make a profit below $37 a barrel are Iran and Iraq. This is not the case for Nigeria, Canada, Egypt, the United States, Britain, Venezuela, Russia, Qatar or Norway. In fact, Saudi Arabia can still turn a profit below $15 a barrel. If a multitude of operations fail in unprofitable countries, Saudi Arabia will gain share. (For more, see: Saudi Aramco: An IPO for the World's Largest Firm?)
Little Info

You have to ask yourself why Saudi Arabia is so adamant on maintaining current production levels. Everything about Saudi Aramco is secretive, including revenue numbers and reserves. Could it be possible that this is a failing operation that’s looking to go public so those in charge can cash out? It can’t be ruled out as a possibility. On the other hand, if Saudi Aramco goes public, most information related to the company will become transparent.

Either way, if Saudi Aramco goes public, it’s expected to be the largest publicly-traded company in the world with a market cap in the trillions. In the beginning, it’s possible that only 5% of the company will be available, followed by likely increases, but not enough where those in power will give up control. (For more, see: The Biggest Oil Producers in the Middle East.)
Investment Angle

All of the above information is interesting, but the investment angle is much simpler. Currently, we’re living in a deflationary global economy where oil prices will only move lower over the next 12-18 months. Even if you attempt to make the argument that oil will rebound when inflation returns down the road, let’s say in 7-10 years, the opportunity will be lost because alternative energy will have gained significant momentum by that time. The most innovative minds of the millennial generation are determined to make alternative energy a reality that can be afforded by the masses. If alternative energy were affordable to the masses now, then almost everyone would be using it. It takes time for new and complicated technologies to become affordable to the general population.
The Bottom Line

It’s possible that Saudi Aramco will make for a good initial trade if there is an initial public offering (IPO), but over the long haul, oil is the next coal. It’s clearly evident that oil’s best days are behind it, not ahead. Barring a highly disturbing geopolitical event, it’s unlikely that we will ever see $100 a barrel oil again. From an investment angle, oil will shift from long-term investor interest to trader interest, with the range for the price of oil being much lower than in the past. If you’re looking for the simplest conclusion possible: Steer clear of Saudi Aramco. (For more, see: The Largest Oil Companies Make a Pledge to Climate Change.)

 

[Pinkieslut]

bloomberg.com
Here’s How Electric Cars Will Cause the Next Oil Crisis

A shift is under way that will lead to widespread adoption of EVs in the next decade.

By Tom Randall | Feb. 25, 2016
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With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the whole world changes.

It’s looking like the 2020s will be the decade of the electric car.

Battery prices fell 35 percent last year and are on a trajectory to make unsubsidized electric vehicles as affordable as their gasoline counterparts in the next six years, according to a new analysis of the electric-vehicle market by Bloomberg New Energy Finance (BNEF). That will be the start of a real mass-market liftoff for electric cars.

By 2040, long-range electric cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of new cars worldwide will have a plug.
Chart: Rise of Electric Cars

This isn’t something oil markets are planning for, and it’s easy to see why. Plug-in cars make up just one-tenth of 1 percent of the global car market today. They’re a rarity on the streets of most countries and still cost significantly more than similar gasoline burners. OPEC maintains that electric vehicles (EVs) will make up just 1 percent of cars in 2040. Last year ConocoPhillips Chief Executive Officer Ryan Lance told me EVs won’t have a material impact for another 50 years—probably not in his lifetime.

But here’s what we know: In the next few years, Tesla, Chevy, and Nissan plan to start selling long-range electric cars in the $30,000 range. Other carmakers and tech companies are investing billions on dozens of new models. By 2020, some of these will cost less and perform better than their gasoline counterparts. The aim would be to match the success of Tesla’s Model S, which now outsells its competitors in the large luxury class in the U.S. The question then is how much oil demand will these cars displace? And when will the reduced demand be enough to tip the scales and cause the next oil crisis?
GIF: The S curve goes vertical

First we need an estimate for how quickly sales will grow.

Last year EV sales grew by about 60 percent worldwide. That’s an interesting number, because it’s also roughly the annual growth rate that Tesla forecasts for sales through 2020, and it’s the same growth rate that helped the Ford Model T cruise past the horse and buggy in the 1910s. For comparison, solar panels are following a similar curve at around 50 percent growth each year, while LED light-bulb sales are soaring by about 140 percent each year.

Yesterday, on the first episode of Bloomberg’s new animated series Sooner Than You Think, we calculated the effect of continued 60 percent growth. We found that electric vehicles could displace oil demand of 2 million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the 2014 oil crisis.

Compound annual growth rates as high as 60 percent can’t hold up for long, so it’s a very aggressive forecast. BNEF takes a more methodical approach in its analysis today, breaking down electric vehicles to their component costs to forecast when prices will drop enough to lure the average car buyer. Using BNEF’s model, we’ll cross the oil-crash benchmark of 2 million barrels a few years later—in 2028.
Chart: Predicting the Big Crash

Predictions like these are tricky at best. The best one can hope for is to be more accurate than conventional wisdom, which in the oil industry is for little interest in electric cars going forward.

“If you look at reports like what OPEC puts out, what Exxon puts out, they put adoption at like 2 percent,” said Salim Morsy, BNEF analyst and author of today’s EV report. “Whether the end number by 2040 is 25 percent or 50 percent, it frankly doesn’t matter as much as making the binary call that there will be mass adoption.”

BNEF’s analysis focuses on the total cost of ownership of electric vehicles, including things like maintenance, gasoline costs, and—most important—the cost of batteries.

Batteries account for a third of the cost of building an electric car. For EVs to achieve widespread adoption, one of four things must happen:

1. Governments must offer incentives to lower the costs.
2. Manufacturers must accept extremely low profit margins.
3. Customers must be willing to pay more to drive electric.
4. The cost of batteries must come down.

The first three things are happening now in the early-adopter days of electric vehicles, but they can’t be sustained. Fortunately, the cost of batteries is headed in the right direction.
Chart: It's All About the Batteries

There’s another side to this EV equation: Where will all this electricity come from? By 2040, electric cars will draw 1,900 terawatt-hours of electricity, according to BNEF. That’s equivalent to 10 percent of humanity’s electricity produced last year.

The good news is electricity is getting cleaner. Since 2013, the world has been adding more electricity-generating capacity from wind and solar than from coal, natural gas, and oil combined. Electric cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the move toward a cleaner grid, electric vehicles and renewable power create a mutually beneficial circle of demand.

And what about all the lithium and other finite materials used in the batteries? BNEF analyzed those markets as well, and found they’re just not an issue. Through 2030, battery packs will require less than 1 percent of the known reserves of lithium, nickel, manganese, and copper. They’ll require 4 percent of the world’s cobalt. After 2030, new battery chemistries will probably shift to other source materials, making packs lighter, smaller, and cheaper.
Video: The Peak Oil Myth and the Rise of the Electric Car

Despite all this, there’s still reason for oil markets to be skeptical. Manufacturers need to actually follow through on bringing down the price of electric cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel. Many new drivers in China and India will continue to choose gasoline and diesel. Rising oil demand from developing countries could outweigh the impact of electric cars, especially if crude prices fall to $20 a barrel and stay there.

The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year. The more miles a car drives, the more economical battery packs become. If these new services are successful, they could boost electric-vehicle market share to 50 percent of new cars by 2040, according to BNEF.

One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that follows will bring more electric cars to the road, and less demand for oil. Someone will be left holding the barrel.

 

[Satyr]

I don't think it had anything to do with poor planning or betting on the wrong thing. Oil & Gas became a saviour of sorts when we had to wind down our highly labour intensive shipbuilding and repair industry. It was also service and logistics orientated and there was already a smaller but established provisioning base for American drilling interest in the region. Loyang became the hub and did very well since the early 80s. So nearly 35 years of a great ride.

Folks like the Ezra founders made their fortune years ago on the back of the O&G. Its now for the second generation to find another opportunity.

As for the government, it really needs to get its head our of the sand and start planning for new industries and more employment opportunities for Singapore. They certainly need to stop spinning stories to the compliant press about how jobs are and pretending that all is hunky dory.

These guys are clueless and using a shotgun to nail as many buzzwords as possible. Worse, they still have money and that can be a substitute for hard thinking. I have nothing against foreigners but you cannot depend on them to get you out of a fix. The worst thing this administration had done is to kill Singapore pride and identity. Do they think we are the great US ? Yes , over there immigrants can come in and feel American and protected because the country never really has her back totally to the wall. They also have a great narrative about their history. No American will hesitate to tell you what America stands for， regardless of how politicians screw it up. Singaporeans don't even believe in much of the pledge and most don't know what the words of their National Anthem mean.
Singapore has gone from being about people to being about inputs to the GDP. Specifically imported labour and money. In a crisis , nationalism is important. That is almost gone. Well done MIW.

 

[congo9]

These guys are clueless and using a shotgun to nail as many buzzwords as possible. Worse, they still have money and that can be a substitute for hard thinking. I have nothing against foreigners but you cannot depend on them to get you out of a fix. The worst thing this administration had done is to kill Singapore pride and identity. Do they think we are the great US ? Yes , over there immigrants can come in and feel American and protected because the country never really has her back totally to the wall. They also have a great narrative about their history. No American will hesitate to tell you what America stands for， regardless of how politicians screw it up. Singaporeans don't even believe in much of the pledge and most don't know what the words of their National Anthem mean.
Singapore has gone from being about people to being about inputs to the GDP. Specifically imported labour and money. In a crisis , nationalism is important. That is almost gone. Well done MIW.

Singaporean Hierachy of needs is always stuck at the bottom level. Though some may proclaim that they do charity works for some under privilege countries or few, but beneath that when you hear them speak you know something is critically missing in their soul and Spirit. They may speak God , go by the spirit but when you speak deeper, something is just not there.

The spirit of Can do , will to fight , innovate , create something new and Political awareness is all not there.

 

[Pinkieslut]

Singaporean Hierachy of needs is always stuck at the bottom level. Though some may proclaim that they do charity works for some under privilege countries or few, but beneath that when you hear them speak you know something is critically missing in their soul and Spirit. They may speak God , go by the spirit but when you speak deeper, something is just not there.

The spirit of Can do , will to fight , innovate , create something new and Political awareness is all not there.

You will notice that many Singapore "Christians" are treating their God no different from the Chinese' God of Prosperity. Basically it is a "religion" of put your trust in GOD and he will render your wealth/career-success/riches.

 

[frenchbriefs]

Singaporean Hierachy of needs is always stuck at the bottom level. Though some may proclaim that they do charity works for some under privilege countries or few, but beneath that when you hear them speak you know something is critically missing in their soul and Spirit. They may speak God , go by the spirit but when you speak deeper, something is just not there.

The spirit of Can do , will to fight , innovate , create something new and Political awareness is all not there.

U know what is missing?the sound of money,sinkies are the most passionate when there is promise of profit.its the same for all classes,the elites,mps,ministers and officers earning 10k,15k and 100k a month,even the rank and file,run of the mill sinkie employees,look how loyal they are to their employet,the PAP,sinkies will never do anything to jeopardize their ricebowl,even the poor and underprivileged class sinkies,do u admire their loyalty and dedication when they are to queuing up at sg pools everyday.everything sinkies do is for one purpose and one thing only,the pursuit of wealth and prosperity.u can see it from everything they do,be it from religion,why do the older generation pray fervently to the buddhist gods and burn incense and kim zhua?partly to appease the spirits and superstition,but mainly they believe it would change their luck and fortune?why do the younger generation believe in christianity?because they believe in jesus and the good lord all that bullshit?no they believe in the new phase of christianity,the prosperity theology,that god and jesus will make u rich if.sinkies are simple minded coolies at heart afterall,the hierachy of needs are simple,all they want is money and the good life.why are peasant sinkies so desperate to send their kids to tuition and cram school and study all day long?simple for money and status.abeilt these peasant sinkies are going about it the simple minded way.they choose religion,the PAP and the education system.for me,i was born a capitalist from young,i always knew deep in my bones i would be filthy rich,i embraced capitalism in video games,trading,merchanting,read about finance and economics and investing in the stock market and real estate.picked up poker.

do u think sinkies embrace equality and swiss living all that bullshit?no as long as they have the qualifications to brag about,and the big fat paycheck that reassures them of their dignity and eliteness,they are willing to step on other sinkies backs and look down on them and throw the rest under the bus,and this applys to most sinkies,most sinkies think they are above average or they are superior to others or at least some sinkies.this sort of competition between sinkies has been brewing since the 90s.a sinkies entire existence is to prove that he/she is superior to other sinkies.