WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket

SRSrocco's picture

SRSrocco

By the SRSrocco Report,

The world's largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt.  The glory days of the highly profitable global oil companies have come to an end.  All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil.

I realize my extremely unfavorable opinion of the world's oil industry runs counter to many mainstream energy analysts, however, their belief that business, as usual, will continue for decades, is entirely unfounded.  Why?  Because, they do not understand the ramifications of the Falling EROI - Energy Returned On Invested, and its impact on the global economy.

For example, Chevron was able to make considerable profits in 1997 when the oil price was $19 a barrel.  However, the company suffered a loss in 2016 when the price was more than double at $44 last year.  And, it's even worse than that if we compare the company's profit to total revenues.  Chevron enjoyed a $3.2 billion net income profit on revenues of $42 billion in 1997 versus a $497 million loss on total sales of $114 billion in 2016.  Even though Chevron's revenues nearly tripled in twenty years, its profit was decimated by the falling EROI.

Unfortunately, energy analysts, who are clueless to the amount of destruction taking place in the U.S. and global oil industry by the falling EROI, continue to mislead a public that is totally unprepared for what is coming.  To provide a more realistic view of the disintegrating energy industry, I will provide data from seven of the largest oil companies in the world.

The World's Major Oil Companies Debt Explode Since The 2008 Financial Crisis

To save the world from falling into total collapse during the 2008 financial crisis, the Fed and Central Banks embarked on the most massive money printing scheme in history.  One side-effect of the massive money printing (and the purchasing of assets) by the central banks, was that it pushed the price of oil to a record $100+ a barrel for more than three years.  While the large oil companies reported handsome profits due to the high oil price, many of them spent a great deal of capital to produce this oil.

For instance, the seven top global oil companies that I focused on made a combined $213 billion in cash from operations in 2013. However, they also forked out $230 billion in capital expenditures.  Thus, the net free cash flow from these major oil companies was a negative $17 billion... and that doesn't include the $44 billion they paid in dividends to their shareholders in 2013.  Even though the price of oil was $109 in 2013; these seven oil companies added $45 billion to their long-term debt:

As we can see, the total amount of long-term debt in the group (Petrobras, Shell, BP, Total, Chevron, Exxon & Statoil) increased from $227 billion in 2012 to $272 billion in 2013.  Isn't that ironic that the debt ($45 billion) rose nearly the same amount as the group's dividend payouts ($44 billion)?  Of course, we can't forget about the negative $17 billion in free cash flow in 2013, but here we see evidence that the top seven global oil companies were borrowing money even in 2013, at $109 a barrel oil, to pay their dividends.

Since the 2008 global economic and financial crisis, the top seven oil companies have seen their total combined debt explode four times, from $96 billion to $379 billion currently.  You would think with these energy companies enjoying a $100+ oil price for more than three years; they would be lowering their debt, not increasing it.  Regrettably, the cost for companies to replace reserves, produce oil and share profits with shareholders was more than the $110 oil price.

There lies the rub....

One of the disadvantages of skyrocketing debt is the rising amount of interest the company has to pay to service that debt.  If we look at the chart above, Brazil's Petrobras is the clear winner in the group by adding the most debt.  Petrobras's debt surged from $21 billion in 2008 to $109 billion last year.  As Petrobras added debt, it also had to pay out more to service that debt.  In just eight years, the annual interest amount Petrobras paid to service its debt increased from $793 million in 2008 to $6 billion last year.  Sadly, Petrobras's rising interest payment has caused another nasty side-effect which cut dividend payouts to its shareholders to ZERO for the past two years.

Petrobras Annual Dividend Payments:

2008 = $4.7 billion

2009 = $7.7 billion

2010 = $5.4 billion

2011 = $6.4 billion

2012 = $3.3 billion

2013 = $2.6 billion

2014 = $3.9 billion

2015 = ZERO

2016 = ZERO

You see, this is a perfect example of how the Falling EROI guts an oil company from the inside out.  The sad irony of the situation at Petrobras is this:

If you are a shareholder, you're screwed, and if you invested funds (in company bonds, etc.) to receive a higher interest payment, you're also screwed because you will never get back your initial investment.  So, investors are screwed either way.  This is what happens during the final stage of collapsing oil industry.

Another negative consequence of the Falling EROI on these major oil companies' financial statements is the decline in profits as the cost to produce oil rises more than the economic price the market can afford.

Major Oil Companies' Profits Vaporize... Even At Higher Oil Prices

To be able to understand just how bad the financial situation has become at the world's largest oil companies, we need to go back in time and compare the industry's profitability versus the oil price.  To find a year when the oil price was about the same as it was in 2016, we have to return to 2004, when the average oil price was $38.26 versus $43.67 last year.  Yes, the oil price was lower in 2004 than in 2016, but I can assure you, these oil companies weren't complaining.

In 2004, the combined net income of these seven oil companies was almost $100 billion..... $99.2 billion to be exact.  Every oil company in the group made a nice profit in 2004 on a $38 oil price.  However, last year, the net profits in the group plunged to only $10.5 billion, even at a higher $43 oil price:

Even with a $5 increase in the price of oil last year compared to 2004, these oil companies combined net income profit fell nearly 90%.  How about them apples.  Of the seven companies listed in the chart above, only four made profits last year, while three lost money.  Exxon and Total enjoyed the highest profits in the group, while Petrobras and Statoil suffered the largest losses:

Furthermore, the financial situation is in much worse shape because "net income" accounting does not factor in the companies' capital expenditures or dividend payouts.  Regardless, the world's top oil companies' profitability has vaporized even at a higher oil price.

Now, another metric that provides us with more disturbing evidence of the Falling EROI in the oil industry is the collapse of  the "Return On Capital Employed."  Basically, the Return On Capital Employed is just dividing the company's earnings (before taxes and interest) by its total assets minus current liabilities.  In 2004, the seven companies listed above posted between 20-40% Return On Capital Employed.  However, this fell precipitously over the next decade and are now registering in the low single digits:

In 2004, we can see that BP had the lowest Return On Capital Employed of 19.68% in the group, while Statoil had the highest at 46.20%.  If we throw out the highest and lowest figures, the average for the group was 29%.  Now, compare that to the average of 2.4% for the group in 2016, and that does not including BP and Chevron's negative returns (shown in Dark Blue & Orange).

NOTE:  I failed to include the Statoil graph line (Magenta)  when I made the chart, but I added the figures afterward.  For Statoil to experience a Return On Capital Employed decline from 46.2% in 2004 to less than 1% in 2016, suggests something is seriously wrong.

We must remember, the high Return On Capital Employed by the group in 2004, was based on a $38 price of oil, while the low single-digit returns by the oil companies in 2016 were derived from a higher price of $43.  Unfortunately, the world's largest oil companies are no longer able to enjoy high returns on a low oil price.  This is bad news because the market can't afford a high oil price unless the Fed and Central Banks come back in with an even larger amount of QE (Quantitative Easing) money printing.

I have one more chart that shows just how bad the Falling EROI is destroying the world's top oil companies.  In 2004, these seven oil companies enjoyed a combined net Free Cash Flow minus dividends of a positive $34 billion versus a negative $39.1 billion in 2016:

Let me explain these figures.  After these oil companies paid their capital expenditures and dividends to shareholders in 2004, they had a net $34 billion left over.  However, last year these companies were in the HOLE for $39.1 billion after paying capital expenditures and dividends.  Thus, many of them had to borrow money just to pay dividends.

To understand how big of a change has taken place at the oil companies since 2004, here are the figures below:

Top 7 Major Oil Companies Free Cash Flow Figures

2004 Cash From Operations = ............$139.6 billion

2004 Capital Expenditures = .................$67.7 billion

2004 Free Cash Flow = ...........................$71.9 billion

2004 Shareholder Dividends = ..............$37.9 billion

2004 Free Cash Flow - Dividends = $34 billion

2016 Cash From Operations = .................$118.5 billion

2016 Capital Expenditures = ....................$117.5 billion

2016 Free Cash Flow = ................................$1.0 billion

2016 Shareholder Dividends = ...................$40.1 billion

2016 Free Cash Flow - Dividends = -$39.1 billion

Here we can see that the top seven global oil companies made more in cash from operations in 2004 ($139.6 billion) compared to 2016 ($118.5 billion).   That extra $21 billion in operating cash in 2004 versus 2016 was realized even at a lower oil price.  However, what has really hurt the group's Free Cash Flow, is the much higher capital expenditures of $117.5 billion in 2016 compared to the $67.7 billion in 2004.  You will notice that the net combined dividends didn't increase that much in the two periods... only by $3 billion.

So, the lower cash from operations and the higher capital expenditures have taken a BIG HIT on the balance sheets of these oil companies.  This is precisely why the long-term debt is skyrocketing, especially over the past three years as the oil price fell below $100 in 2014.  To continue making their shareholders happy, many of these companies are borrowing money to pay dividends.  Unfortunately, going further into debt to pay shareholders is not a prudent long-term business model.

The world's major oil companies will continue to struggle with the oil price in the $50 range.  While some analysts forecast that higher oil prices are on the horizon, I disagree.  Yes, it's true that oil prices may spike higher for a while, but the trend will be lower as the U.S. and global economies start to contract.  As oil prices fall to $40 and below, oil companies will begin to cut capital expenditures even further.  Thus, the cycle of lower prices and the continued gutting of the global oil industry will move into high gear.

There is one option that might provide these oil companies with a buffer... and that is a new even larger Fed and Central Bank money printing scheme which would result in severe inflation and possibly hyperinflation.  But, that won't be a long-term solution, instead just another lousy band-aid in a series of band-aids that have only postponed the inevitable.

The coming bankruptcy of the once mighty global oil industry will be the death-knell of the world economy.  Without oil, the global economy grinds to a halt.  Of course, this will not occur overnight.  It will take time.  However, the evidence shows that a considerable wound has already taken place in an industry that has provided the world with much-needed oil for more than a century.

Lastly, without trying to be a broken record, the peak and decline of global oil production will destroy the value of most STOCKS, BONDS and REAL ESTATE.  If you have placed most of your bests in one of these assets, you have my sympathies.

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wide angle tree's picture

It's due to bad management more than falling EROI.

fulliautomatix's picture

Indeed. Lots of squawk about Petrobas, Brazil and corruption too over the years. Profits down - really? Also no indications of borrowings by year and share buybacks to complete the picture.

The ROI looks to tracking the general (global) economy in terms of growth.

steve2241's picture

In the past decade, Exxon spent $210 billion buying back its own shares.

https://www.reuters.com/article/us-exxon-mobil-results-buybacks/exxon-to...

desertboy's picture

Yup,  with free capital, why would they not go into debt?  

steve2241's picture

This is just creative accounting.  In recent years, companied have purchased their stock and went into debt to do so.  Their interest expense numbers have gone through the roof and resulted in considerable net losses.  I haven't read through the whole article, but the cash flow number is important and should be mentioned in it.

AGuy's picture

"This is just creative accounting. In recent years, companied have purchased their stock and went into debt to do so."

They abandon Mega-projects to replace depleting reserves. Around 2010-2011 it became evident that consumers could sustain the cost of high oil prices and could not complete with money losing Shale drillers that were funded by debt and investors.

Hugh Mann's picture

GOOD! My heart bleeds piss for them.

Kefeer's picture

Seems we are near the bottom and the price will be rising.  The oil is not going anywhere.  If people believe that "green energy" is going to replace oil anytime soon, then I have a lithium plant for sale.  Those batteries are bombs in the making.

desertboy's picture

Bombs in the making?  So were automobiles.  I guess that's why we stopped driving them.

Herdee's picture

Start employing all the secret patents that the state has bought up to make everyone energy self sufficient. The advanced technolgies that the government holds could bring the world into peace. The environment would be saved as world population growth grows exponentially and soon to double.  She'd be a new world and global peace would come about but the NeoCon/Socialist Nazis don't want it. They serve the military/industrial/spy complex and are destroying our planet. Decades ago, the American government could gone ahead with it but decided to serve another entity.  The entity of endless war and environmental destruction.

desertboy's picture

I think they need you back in Roswell.

Kefeer's picture

You cannot have peace apart from honoring God and it is inherent within our nature to rebel against that which is good - God is always good.  If you look at 1962 and beyond we have gone down the moral sewer as we have decided, after nearly 200 years that we no longer needed God.  (1962 is when the Supreme Court basically kicked God out of our schools)

rf80412's picture

God created us to be mindless worship machines and hates us enough to torture us for eternity because we dared to be more than that.

FIAT CON's picture

Speak for yourself. I follow no fake god.

All Risk No Reward's picture

>>God created us to be mindless worship machines and hates us enough to torture us for eternity because we dared to be more than that.<<

Nonsense. Lucifer manipulate people to be mindless money worshipers and suckers for deception.

Eternal hell is not Biblical, the 2nd death is. Oh, I know, Lucifer lies and says death is life, but the Bible doesn't say that.

Oh, you assume Christian orthodoxy is actually authentic Christianity?

You probably didn't know that Jesus said people claiming to represent Christianity would deceive the many.

"For man shall come in my (Jesus') name and say that I (Jesus) is Christ, and they shall deceive many."

WHO comes in Jesus' name and says that he's the Christ? Establishment Christianity. Whose deceived you? The same counterfeit Christianity.

I know, Lucifer says that the verse speaks of people coming in Jesus' name, but claiming that they (the person speaking) is the Christ.

How many people come in Jesus' name, but proclaim themselves to be the Christ? Not enough to deceive the "many."

Oh, and look at the history of the Counterfeit Christianity... they spent 10 years genociding authentic Christians, often torturing and terrorizing them first, then, once they murdered almost all of them, they took the name and brought in their own traditions while rejecting the main message of the Bible.

So, that's what's wrong the mostly unwitting Luciferians parading around like Christians.

What's right with authentic Christianity?

The principle of being free to care about others equal to yourself in any manner you see fit.

If you do that, you live forever, as it should be.

But if you know the truth with a clear mind are committed to being selfish and committed to doing dirty to others (not caring about them), then you will be put out of your misery.

As it should be.

The TRUTH is so simple, that the Luciferian deceived mind repels it.

Until it doesn't.

tangent's picture

The moment you have free energy then you have moguls that will produce free energy for use in power plants, aluminimum production, etc. Yet 100% of all electricity seems to come from coal and other such methods. So no, nobody has figured out free energy. You are wrong. There isn't a shred of evidence any energy intensive operation on the planet has a mysteriously high profit margin, or low fuel need. None. Zero stories about power plants with no fuel needs. Zero proliferation of nuclear energy plants, which could be used to disguise a free energy power plant.

chestergimli's picture

With free energy, the Jews would lose their money and power. THere is no way they will let out the truth about 911 or free energy.

Peterman333's picture

No, you're wrong Colonel Sanders. Fleischhmann, Pons, Tesla.

Yukon Cornholius's picture

Thorium and LFTR technology would certainly ease some of the energy burden. Good thing the Chinese hold most of the patents on it.

Cloud9.5's picture

So would warp drive cores.   I'm sure there is one laying around in a junk yard somewhere. 

desertboy's picture

That sums it up nicely.  Thorium, as a closed fuel cycle, is one of the best scams going.

Silver Savior's picture

Exactly. People have it in their heads that we can just tap resources cheaply and with abandon. Those easy days are over. Going forward it's higher costs, lower grade and overall diminishing returns. It's kind of like parents coming home to an out of control teenie bopper party.

MrBoompi's picture

Name one business sector the banks haven't conquered.

Paul Morphy's picture

This is a great article and it lays out clearly and concisely the facts.

 

Great article and great find Tyler

Hongcha's picture

No mention of PTR, SNP, SHI, CEO, LUKOY or the most undervalued company in the world, OGZPY.  Have a look at their balance sheets.  I own then all, and yes they pay their dividends and pay them on time. 

Honest Sam's picture

The deficit doesn't matter, debt doesn't matter. 

It is only an illusion, a vapor.

As we saw in the 2008-2009 and continuing financial Armageddon that brought us over the edge, like the Coyote chasing the Roadrunner, while hanging in midair, the FED simply got in bed with Treasury and within a Jew Nork minute, trillions of new debt was created and that was followed by CBs all over the world dittoing this maneuver and here we are 10 years later with no consequences, the culprits and shylocks that borught it about have bought even larger Estates, more Eurasian and Japanese mistresses, Top end Auto sales are at an all time high, and the stock market has reflected this jubilance by being incapable of any correction, indeed, has risen to never before seen heights.

You people worry too much.  Be happy.

Sirius Wonderblast's picture

About borrowing to pay dividends.

Leaving aside simple greed, of which there is plenty, execs across the board are shit scared of not paying dividends or even announcing a slightly depressed result because they know some arsehole lawyer will be suing them before you know it. This usually takes place in NYC, and keeps many attorneys there in caviar.

chestergimli's picture

The higher the stock goes In the stock market, the more dividends they have to pay. Personally, I believe the big bosses are paying themselves huge pay raises. In addition, are they borrowing money for any stock buybacks?

WTFUD's picture

I've located a Whale of an Oil Field, biggest ever find, will produce enough barrels of oil per day to single-handedly cater for total daily world consumption for 500 years ( factored in is that oil consumption/demand will increase 20% year on year ). I'll hand it over to the current shower of oil companies, that they never need  chase uneconomical smaller finds in the far corners of the Earth, with the increasing requirement of huge Capital Outlay, so they can all concentrate, pull their resources in just this One Spot, lay-off 90% of the workforce, but pay them their regular salary for Life + a guaranteed $100 Billion per year in Shareholders Dividend. The Oil is so beautifully clean no refining is necessary. Last All Vichy DC Wars can now cease - it's basically Free.

However, am no tellin naebody whar it is, unless the Establishment hand over the main instigators of 9/11.

gregga777's picture

The U.S. Internal Revenue Service defines a BOE (barrel of oil equivalent) as equal to 5.8 × 106 BTU.[1] (5.8 × 106 BTU59 °F equals 6.1178632 × 109 J, about 6.1 GJ (HHV), or 1.7 MWh.) The value is necessarily approximate as various grades of oil and gas have slightly different heating values. If one considers the lower heating value instead of the higher heating value, the value for one BOE would be approximately 5.4 GJ (see ton of oil equivalent). Typically 5,800 cubic feet of natural gas or 58 CCF are equivalent to one BOE. The USGS gives a figure of 6,000 cubic feet (170 cubic meters) of typical natural gas.[2]

What You Can Buy With America's Daily Oil Consumption. It is no secret that the U.S. has long been the world's dominant oil consumer. According to the EIA, America uses approximately 18.9 million barrels of crude per day; that nets out to nearly 7 billion barrels per year, an astonishing figure.

The United States uses approximately 18.9 million barrels of oil per day (~20 gallons gasoline, ~11 gallons diesel fuel/home heating oil, ~4 gallons jet fuel, and miscellaneous other products). The energy contained in a barrel of oil is 6.1 G Joules (HIgher Heating Value) or 5.4 GJ (Lower HV).

Using the higher heating value for a barrel of oil:

18.9E6 barrels per day X 6.1E9 Joules/barrel (HHV) =
1.15E17 Joules/day / (3600s/hr) = 3.2E13 (J/s)-hours/day =
3.2E13 W-hrs/day = 3.2E4 GW-hrs/day =
3.2E4 GW-hrs/day / 24 hours/day = 1,334 GW

That's the energy consumed at the customers point of usage! It DOES NOT include power plant energy conversion efficiency from whatever energy source, transmission line losses, up/down voltage conversion losses, etc.! That also assumes that the load is spread evenly across the entire day which everyone knows is not true.

That's equivalent to ~1,334 1 GW power plants at the customer's point of usage!

Using the lower heating value:

18.9E6 barrels per day X 5.4E9 Joules/barrel (LHV) =
1.02E17 Joules/day / (3600s/hr) = 2.84E13 (J/s)-hours/day =
2.84E13 W-hrs/day = 2.84E4 GW-hrs/day =
2.84E4 GW-hrs/day / 24 hours/day = 1,181 GW

That's the energy consumed at the customers point of usage! It DOES NOT include power plant energy conversion efficiency from whatever energy source, transmission line losses, up/down voltage conversion losses, etc.! That also assumes that the load is spread evenly across the entire day which everyone knows is not true.

That's equivalent to ~1,181 1 GW power plants at the customer's point of usage!

Better start building lots of electricity generating capacity if you really think that electricity can replace oil especially in the transportation sector (forget about electrifying air transportation).

Also, on the surface wind turbine plants seem like a bargain. That's until one realizes that to get 1 GW of generating capacity one has to build 5 GW of nameplate rated generating capacity. That's because wind turbines only generate about 21% of their nameplate rated capacity over the course of a year. The wind is fickle even in the windiest of places.

desertboy's picture

"That's the energy consumed at the customers point of usage!"

 "..DOES NOT include power plant energy conversion efficiency"

 

Say what?  All consumed oil is used without normal efficiency losses? 

 

Wrong.  An automobile is a 25% efficient power plant from HHV (thermal efficiency),.... NOT including extraction/refining/distribution losses - it's no more efficient than your grid energy (about 45% efficient steam turbine minus grid losses).

 

Also worth noting: the sun hits the earth with about 89,000 x the total US consumption given here (or, about 89,000,000 GW), so, good to keep things in perspective.

Otherwise a good post.

perkunas's picture

Where did you get that from "greenpeace".

When you refine oil, you get thousands of products, the numer one being plastics. What you are left over with, is a waste product called gas. Years ago  they poured it down the drain, untill someone got the idea its better to burn it in our cars. Cars may or not be that efficant at converting that energy, is a non issue. They burn waste, and the only things that can be said about that, is the CO2 produced. Since CO2is not a pollutant, as plants need it to survive, another non issue.

RafterManFMJ's picture

Concur; visit his website and read up!

WTFUD's picture

. . . . and here's me thinking he was just a bolshie anti-Establishment agitator. lol

Ban KKiller's picture

A bandaid of louses? Yucky, yep. Ha ha ha ha.

Cloud9.5's picture

The oil market is rigged.  For there to be a true market, there must be two prime players, buyers and sellers that are free to negotiate price. We are sitting here on the edge of a cratered economy and musing over why gas prices have not risen.

On the seller’s side, i.e. the production side, there is a rather simple process in any mining operation. The large concentrations of the easy to get at stuff are always mined first. As the operation begins to deplete those easy sources, innovators introduce new technologies to augment production. The steam engine came into its own because there was a need to pump water out of coal mines. Those engines did not put more coal in the veins that were being mined. What they did do was make some inaccessible coal accessible. At some point the veins play out or the techniques needed for extraction become cost prohibitive and production stops. Either way, at some point coal mines close.

On the buyer’s side, the sought after product must in some way increase income or enhance the standard of living for the purchaser. Oil does that for western civilization in a million ways. Oil is the single factor, the one ingredient, that if withdrawn will collapse our civilization in a matter of days. Nothing else is in place that can fuel our transports. Before alternatives could be brought on line the world wide supply chains would collapse. The resulting chaos would take down civilization.

For this simple reason, nothing about the oil market is real. Everything is contrived and controlled. Still, there is a dynamic that is playing out below the surface. It has to do with the declining ratio that exists between the energy consumed in production and the remaining net energy available for sale. We are very rapidly approaching a zero sum game. We are getting to the point that the calories invested in production are exceeding the calories produced by the process. This declining ratio is evidenced in declining profit margins. In a real market, when extraction costs rise to the point that they exceeded the product’s market price, production would simply stop.

 

That is not the case with oil. Unprofitable oil is being extracted the world over. The fact that it is not profitable is concealed first and foremost by a never ending line of credit that has been made available to producers. As long as the bills can be paid by borrowed money, the profit margins are irrelevant. The spice will continue to flow even at a loss. Secondly the full impact of this imbalance is being hidden to some extent by the simple fact that source of calories used in production are not identical to the calories produced by the process. Coal produced electricity will not power an F-16.

Oil production will continue and prices will continue to remain low as long as the exponential credit creation continues. When credit collapses oil production implodes.

RafterManFMJ's picture

Coal can be liquified to fuel a ‘16.

Eventually, it will be.

Cloud9.5's picture

You are quite correct.  Coal gasification was an expedient used in WW I and II by the Germans and ran the Luftwaffe during the Second World War.  Wood gas was another expedient.  I have no doubt that A-10’s will still be flying long after soccer moms are forced to ditch their SUV’s for Vespas. 

AGuy's picture

"You are quite correct. Coal gasification was an expedient used in WW I and II by the Germans and ran the Luftwaffe during the Second World War. "

Nope The Germans were never able to produce sufficient fuel from Coal to meet demand. Even with modern Tech, CTF would cost about $22 gallon (equiv to gasoline) or about $924 for a equiv to a barrel of Oil.

FWIW: I think the era of modern transportation comes to end when the price of Oil is between $150 & $200. Its likely when Oil prices soar again it will break most if not all of the industrialized nations.

El Vaquero's picture

At which point, industrial society takes a shit, or we go full bore on breeder reactors and manufacture liquid fuels. 

ZZR600's picture

Is this why there is suddenly a big panick to ban IC engines in many countries by the 2030's? We assume that governments are idiots, but maybe they are keeping up to date with this stuff and are tryng to mitigate the effect. 

pparalegal's picture

No, they are grinning idiots selling free college to the willing. They just get to tax their i?diotic plans and losses.

El Vaquero's picture

No, they're fucking idiots.  None of them have any concept of how much infrastructure would have to be built and/or upgraded, nor how much mining would have to be done to get the raw materials needed to convert our fleet of vehicles to electric, nor what that would do to shipping.  Few people ever think about what would have to happen on the back end of this shit. 

 

Funny tagent:  Yesterday, I was near some lady who was getting signatures to make my state install some large amount of "green" energy solutions by 2030, and before she even got to me, I said that I would not sign that petition because it won't work and all it would do is shift the pollution to China.  She looked like I had punched her in the gut when I said that. 

AGuy's picture

"We assume that governments are idiots, but maybe they are keeping up to date with this stuff and are tryng to mitigate the effect. "
Nope since they turned to NatGas as the primary answer. Power companies are converting Nuclear & Coal to NatGas plants. There agenda is to create a "new" a Carbon tax.

pparalegal's picture

The goal is UN Agenda 21 (or the new and improved one - 2036). All will be moved into managed mega cities to play on their cell phones and live in their stack & pack shipping containers within walking distance of their jobs. Only special people and bureaucrats will be allowed free wheeling transportation and suburban homes.  Enjoy you national parks now while you can. You will have to book an approved tour bus out of town later.

El Vaquero's picture

IIRC, coal produces more CO2 than natgas per KwHr, but don't quote me on that. 

Sirius Wonderblast's picture

They're not that bright. After all, have they come up with a way to power transport when the wells run dry (or no-one wants to get what's left out of the ground)? So far as I am aware, they have not. They do, however, keep on promoting edge of town and out of town development that ensures people must jump in cars to go to work, but don't worry they'll just add tax to somehow fix that. Fuckwits.