Seeing that massive drop in investment while consumption rises makes me think I should be buying O&G stocks. A lot of this expansion is just that we are consuming more and more. It's good that some of that new consumption is fueled by solar, but we are still increasing petro usage. Long way to go.
It's going to lead to short term volatility for sure. As we've seen the transition has not been totally predictable and longer term investment in Oil and Gas is seen as more risky due to externalities.
I think there'll be a strong tightening of supply and higher prices in the near term, but that will only quicken the pace of change as non oil producing nations like China hurry towards energy security.
There's no doubt that peak demand is coming soon, but it may not be soon enough. Advanced economies in general use less oil now than they did even decades ago and are predicted to decline further. All of the growth is in emerging markets especially Asia. There's very little oil production there and they're rapidly electrifying because they don't want to be reliant on other nations for their energy. China added more wind and solar capacity than Europe and the US combined so far this year.
China is responsible for more than 100% of the growth in passenger vehicle sales. Regardless of power train, advanced economies are buying less vehicles every year and peaked in 2017. Almost all of that growth in oil consumption for passenger vehicles is China and a bit in India. Both are electrifying at an insane rate. China will likely finish 2023 at 40% of new car sales being plug in electric. It'll likely be 60% or more next year and it's not slowing down. India is a huge market for two and three wheeled mobility and electric options are destroying the ICE competition. China sold 220,000 electric buses last year and had over 600,000 themselves and growing fast. IEA predicts peak demand in road transport oil consumption to decrease starting in 2026, and many think that may be late. They predict consumption may continue to increase until 2028 due to high petrochemical demand, but the downside of that transport demand curve may be quite quick
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If you have ever wondered how lithium batteries are recycled, here's a good video of the process. One interesting bit is they say they can process up to 18,000 tons a year. That's about 25,000 car batteries. Tesla is selling roughly 1.5 million a year alone, so we are going to need a lot more scale on these in the future.
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If you have ever wondered how lithium batteries are recycled, here's a good video of the process. One interesting bit is they say they can process up to 18,000 tons a year. That's about 25,000 car batteries. Tesla is selling roughly 1.5 million a year alone, so we are going to need a lot more scale on these in the future.
The trouble with scaling now of course, is that it'll be 10-15 years before these batteries are available for recycling, so the supply of material isn't going to match the capacity of your start scaling too quickly. On that though, lots of announcements these days about recycling:
Lithium discovery in US volcano could be biggest deposit ever found
Quote:
An estimated 20 to 40 million tonnes of lithium metal lie within a volcanic crater formed around 16 million years ago. This is notably larger than the lithium deposits found beneath a Bolivian salt flat, previously considered the largest deposit in the world.
I just saw this after your post, as I was curious how much that actually meant.
Required global production:
Quote:
+ Benchmark Base Case: 3.1m tonnes
+ Benchmark High Case: 5.3m tonnes
+ Benchmark Lithium Supply Constrained Case: 2.5m tonnes
Current production:
About 130,000 tons
So a long way to go. That one mine would provide about 10 years of global supply. It seems kind of unique, though maybe more discoveries like this will help.The more interesting bit is that last number and how it will need to grow 30x.
I just saw this after your post, as I was curious how much that actually meant.
Required global production:
Current production:
About 130,000 tons
So a long way to go. That one mine would provide about 10 years of global supply. It seems kind of unique, though maybe more discoveries like this will help.The more interesting bit is that last number and how it will need to grow 30x.
Keep in mind that the 20-40 million tonnes being reported is likely the booked resource number (ie. what the geoscientists believe is in place based on extrapolation of earth science data.) The reserves, which is the amount that can actually be produced, is generally significantly less. Having never worked in hard rock geology I don't know what the numbers could look like but reserves could be less than 10% of resources.
Keep in mind that the 20-40 million tonnes being reported is likely the booked resource number (ie. what the geoscientists believe is in place based on extrapolation of earth science data.) The reserves, which is the amount that can actually be produced, is generally significantly less. Having never worked in hard rock geology I don't know what the numbers could look like but reserves could be less than 10% of resources.
Ya, Street Pharmacist's link doesn't say if that 20-40 is recoverable after processing, or presumed percent of rock volume, or what. I don't think that is hard rock though, is it? I just assumed it was the amount they could produce from the resource after processing.
I just saw this after your post, as I was curious how much that actually meant.
Required global production:
Current production:
About 130,000 tons
So a long way to go. That one mine would provide about 10 years of global supply. It seems kind of unique, though maybe more discoveries like this will help.The more interesting bit is that last number and how it will need to grow 30x.
So there's a few things wrong with your analysis.
1) Your numbers are wrong because you're conflating Lithium with Lithium carbonate equivalent. We currently produce about 120,000 metric tonnes of Lithium or 700,000 tonnes of Lithium Carbonate equivalent (edit: almost 1,000,000 tonnes in 2023 with another large jump expected as mines come on next year). The highest estimates of increased production are maybe 6x and that assumes zero recycling and no mineral substitution with massive overbuild. Most expert estimates are 2-4x and that increase is actually not that much as I'll show shortly.
2) I was speaking about people saying that the world doesn't have enough Lithium, not about being able to supply in the near term which will be a bottleneck for sure. But this is a timing issue, not a feasibility one. Global Lithium resources were estimated at 40M tonnes in 2014. As of 2022 it was 88M and will rise a lot more this year after the discovery I posted. The point is, we're good at finding more stuff if we have to. This is true for all mineral extraction.
3) The issue with Lithium demand increasing is a near term issue. A new mine takes 8-10 years to start producing, but we're going to need that lithium in 4-5 years. Globally, there are 35,000 or more active mines of all types. We need maybe 300-350 more for all the critical minerals. That's not that much. If the demand is there, it'll happen.
4) All of this ignores efficiency and substitution which will have massive impacts that we just can't see yet. Explosion in sodium ion battery production in China may substantially cut into lithium demand if it takes off. Early in the transition to EVs range and therefore battery size is king, but that may change as people get more comfortable with charging and realize they could save a lot by only buying what they need. There is large error bars on those estimates because lots can and will change in how we use and make these technologies
Really awesome substack article about this from Hannah Ritchie in January I look back at a lot for this type of stuff. She's the head of research at Our World in Data:
Keep in mind that the 20-40 million tonnes being reported is likely the booked resource number (ie. what the geoscientists believe is in place based on extrapolation of earth science data.) The reserves, which is the amount that can actually be produced, is generally significantly less. Having never worked in hard rock geology I don't know what the numbers could look like but reserves could be less than 10% of resources.
It's really early and mining feasibility studies haven't been done yet. The point was more that known resources are increasing quickly and the notion that there's not enough in the world (even if we look at reserves) is very silly.
Global resources were 88 million in 2022. This would change that number significantly once verification of the resource is finished. We've barely begun looking for it
Ya, Street Pharmacist's link doesn't say if that 20-40 is recoverable after processing, or presumed percent of rock volume, or what. I don't think that is hard rock though, is it? I just assumed it was the amount they could produce from the resource after processing.
Hard rock refers to extraction/mining of minerals and coal while soft rock refers to oil and gas.
A quick look for info on the project/area shows that those numbers are some estimate of resources. Proven reserves are reported at around 2.5M metric tonnes and proven+probable at 3.1M metric tonnes.
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Hard rock refers to extraction/mining of minerals and coal while soft rock refers to oil and gas.
A quick look for info on the project/area shows that those numbers are some estimate of resources. Proven reserves are reported at around 2.5M metric tonnes and proven+probable at 3.1M metric tonnes.
I apologize but those previous numbers on reserves were from 2018. The most recent NI 43-101 has proven reserves at 3.3Mt and 3.7Mt for proven+probable and that is for lithium carbonate equivalent.
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2) I was speaking about people saying that the world doesn't have enough Lithium
This is a super common issue.
People conflate known/discovered resources with total existing resources all the time. It's very easy to just look at "known amount of resource x" and think that's somehow all of the resource out there, or that finding more of a resource is some huge unknowable you can't count on.
This is how we ended up with predictions of "peak oil coming soon" for fifty years.
Thing is, if there's no imminent need to find more of a resource, then there's probably no immediate financial incentive to go looking for more.
There's now money to be made in new lithium mines in amounts that didn't exist just 10 years ago, so companies are actively searching for them now and thus finding them now.
If there weren't new lithium resources being found despite companies actively looking for them, then you could talk about it running out. But right now that's just not the case.
Last edited by Itse; 09-12-2023 at 12:49 PM.
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To the lithium supply argument recycling is going to make a massive dent in this concern. This company in Gilbert AZ is doing its part in solving the problem.
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It's going to lead to short term volatility for sure. As we've seen the transition has not been totally predictable and longer term investment in Oil and Gas is seen as more risky due to externalities.
I think there'll be a strong tightening of supply and higher prices in the near term, but that will only quicken the pace of change as non oil producing nations like China hurry towards energy security.
There's no doubt that peak demand is coming soon, but it may not be soon enough. Advanced economies in general use less oil now than they did even decades ago and are predicted to decline further. All of the growth is in emerging markets especially Asia. There's very little oil production there and they're rapidly electrifying because they don't want to be reliant on other nations for their energy. China added more wind and solar capacity than Europe and the US combined so far this year.
China is responsible for more than 100% of the growth in passenger vehicle sales. Regardless of power train, advanced economies are buying less vehicles every year and peaked in 2017. Almost all of that growth in oil consumption for passenger vehicles is China and a bit in India. Both are electrifying at an insane rate. China will likely finish 2023 at 40% of new car sales being plug in electric. It'll likely be 60% or more next year and it's not slowing down. India is a huge market for two and three wheeled mobility and electric options are destroying the ICE competition. China sold 220,000 electric buses last year and had over 600,000 themselves and growing fast. IEA predicts peak demand in road transport oil consumption to decrease starting in 2026, and many think that may be late. They predict consumption may continue to increase until 2028 due to high petrochemical demand, but the downside of that transport demand curve may be quite quick
I question the bolded.
What about the ever increasing energy demand to:
1. Keep warm and keep cool due to temperature extremes
2. Do all the mining to make the components for the solar panels and wind generators
3. Build, repair, and recycle and/or dispose of the solar panels and wind generators
4. Do all the reconstruction for damage due to storms, fires, floods, earthquakes
5. Provide the energy to satisfy the advances in technology e.g. EVs, batteries, crypto mining
6. Feed, cloth and shelter the 75 million people added to our planet each year
7. Etc.
Last edited by flamesfever; 09-13-2023 at 10:39 AM.
1. Keep warm and keep cool due to temperature extremes
Valid, building science advances are going to eat a lot of this however.
Quote:
Originally Posted by flamesfever
2. Do all the mining to make the components for the solar panels and wind generators
Our current energy sources also take energy to make, and everything is just getting more efficient over time.
Quote:
Originally Posted by flamesfever
3. Build, repair, and recycle and/or dispose of the solar panels and wind generators
Same as above, oil, gas and coal infrastructure wasn't free either.
Quote:
Originally Posted by flamesfever
4. Do all the reconstruction for damage due to storms, fires, floods, earthquakes
This is likely negligible in the scheme of things.
Quote:
Originally Posted by flamesfever
5. Provide the energy to satisfy the advances in technology e.g. EVs, crypto mining
Energy consumption per capita in developed countries is going down. Everything is getting more efficient over time. The biggest uplift in use will be people coming out of poverty, and more people living the same lifestyles as those in developed nations.
Quote:
Originally Posted by flamesfever
6. Feed, cloth and shelter the 75 million people added to our planet each year
Our population is a couple decades away from peaking, this is going to be far less impactful than the above.
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Didn't see it on my device. My bad. Thought it was really cool as it's local in Gilbert AZ and is a really good sign for things to come. 95% recoverable!
