Tesla Supercharges Tomorrow. Oil Keeps Kicking Today.
Electric vehicles are the best opportunity in the coming years for all major markets to reduce oil consumption substantially. The United States alone with its 250 million vehicles (USDOT approx.) uses about 8.7 million barrels per day (bpd) of gasoline (EIA). With such a large potential market, Tesla stock (TSLA) is like a young excitable pup playing on the NASDAQ stock market. TSLA hopped up 1.06% to $178.56 per share today, happily wagging its Supercharger plug.
Electric Energy Revolution
Tesla CEO Musk plans to take a cross country trip soon (spring, across the US) with his kids, which will help demonstrate to the world that Tesla is more than just an electric car manufacturer. This may not be a walk on the Moon or Mars, but it will be a very important moment in history. We are transitioning from oil to electric. As the oil needle runs down (peak oil) today, we know that electric energy can take us wherever we want or need to go tomorrow.
Tesla plans to have most of its Supercharger stations powered by solar, which is a good choice since the Sun has plenty of days ahead, 4.5 billion years approximately (NASA).
Yes, it is in its infancy, but the electric energy revolution is upon us. The Solar Energy Industries Association (SEIA) states on its website: “Today, solar is one of the fastest-growing industries in America, employing 120,000 workers and generating an estimated 13 gigawatts (GW) of clean electricity – enough to effectively power 2 million homes.” SEIA has organized a “Shout Out For Solar” day for January 24 to celebrate solar energy.
West Texas Intermediate (WTI) oil kicked back up to $96.75 per barrel today. The International Energy Agency (IEA) upped its world oil demand estimate to 92.5 million bpd for 2014 in its latest Oil Market Report. The IEA cites the economic rebound in the developed world (US and Europe) as the primary factor for the upped estimate. While most market strategists in recent years have been focusing on the developing world’s appetite for oil, particularly China, the IEA has been reminding us recently that the developed world remains entrenched in the oil world.
As a side note, Royal Dutch Shell issued a substantial profit warning last Friday, largely due to the limits of easy oil supplies. Oil is kicking, but the easy oil has been kicked.
Tesla Supercharger stations
With the world so dependent on this one energy resource, oil, you would think that there would be a relentless (maybe reckless) effort to wean the world off oil. Yes, Tesla Supercharger stations are helping to recall some oil barrels from the world market, but it will take many years for Tesla to make a meaningful dent in world oil demand. The company has 68 Supercharger stations in North America and 14 in Europe, according to its website. By comparison, there are approximately 160,000 gasoline stations in the US according to the Energy Information Administration (EIA) and about 131,000 in Europe according to Europia. Tesla stated yesterday that “81 Supercharger locations are energized worldwide, with 14 locations in Europe. More than 11 million kilometers have been charged by Tesla Superchargers and nearly 1.13 million liters of gas have been offset.”
Oil Transition Risk
The world consumed 91.2 million bpd in 2013 according to the IEA and crossed over 92 million bpd in Q4 2013. As the oil numbers grow larger, the risks for the world grow larger. There is absolutely no certainty that the oil industry will meet global oil demand at a reasonable price per barrel, so the world lives with a constant economic uncertainty that only time and great investment can fix. No, shale oil is not a long-term solution; sustainable electric energy is a long-term solution. We need to stop the oil consumption graph line before the price of a barrel of oil stops the world economy. Please note that the IEA and EIA have slightly different data.
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The world is transitioning from the fossil fuel age to the clean electric energy era. Two major world emergencies are driving this change:
1. There are over 7 billion people on the planet according to the United Nations. Today’s worldwide economic growth is placing tremendous demands on the energy sector. Unfortunately, according to the International Energy Agency, approximately 80% of the world’s energy is derived from fossil fuels. Absent an energy revolution, climate research tells us that the planet will be significantly warmer and altered for future generations.
2. The oil market is expensive and fragile. The door is open to green alternatives; however, high oil prices may destroy the currencies of oil dependent nations before the EV and greentech revolutions have a chance to reach mass adoption.