Comment by thelastgallon
6 hours ago
Demand destruction will collapse profits and accelerate the oil/dollar downfall. Saudi Arabia can profitably pump oil probably under $10/barrel. If demand drops, thats where oil should be.
China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia). This is probably the biggest transition in the history of mankind. This is energy production, storage and all the appliances that use electricity. After this, its incredibly hard for any other country to compete.
> China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia)
I dont agree with china having the same position as the FF exporters. Simply because with renewables, you export the means to produce energy rather than the energy itself. So in terms of monetary value, china will be selling alot less panels than the FF countries sell oil. And other countries can also manufactor renewables tech themselves, while with oil they couldnt materialize it under their feet
Basically i think the paradigm of the energy trade being cornered for politcal controll wont exost with renewables. Renewables are decentralized and so not controllable
ACtually no , even with the export of primary goods that go into the manufactue of renewables like solar the price differential still favours China. A recent example is the boom of local solar manufacture in India whil relies on solar modules imported from china.The assembled panes are still 2X the price of a similar fullly aseembled one from China. And not due too subsidies of labour - a lot of the value chain is highly automated and densely colocated diffrerent from other industrail setups where complimentary industries are geographically separeted which increase final costt by adding unreliable transport and delays into the mix. So at scale and with high volume will continue to be the dominated by China , wear and tear even with renewables will continue to favour the first mover as tech evolves over time.The solar modules/batteries of 10-15 years ago are not the same effficency as those of today.
China indeed makes very cheap solar panels, inverters and batteries, but that just means that they take up a smaller share of the cost of a complete installation, which also includes labor and additional hardware for the mounting system. So solar panels doubling in price won't double the cost of new solar capacity, let alone the cost of electricity from existing installations. That reduces the political leverage a lot compared to oil, where a supply disruption affects prices on fairly short time scales.
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China has shown the willingness to develop and use any source of energy. The same cannot be said for the United States.
China is now the world leading developer of Thorium Reactors.
Innovator's Dilemma for the US. Any alternatives to fossil fuels impact the big energy companies, who want to preserve their cash cows.
Coal in China has many applications beyond simply burning it to produce electricity.
Coal 2025 report
"China consumes 30% more coal than the rest of the world put together. It also produces more coal than all other countries combined, and it is the world’s largest importer. This dominance by a single country makes global coal markets very dependent on developments in China, notably those related to economic growth, government policies, energy markets, weather conditions and dynamics in the Chinese domestic coal sector."
https://www.iea.org/reports/coal-2025/executive-summary
In terms of reducing oil consumption China is pursuing two strategies:
1. Electrification of transport
2. Producing synthetic gasoline/diesel/chemicals from coal.
"The sector last year turned 276 million tons of coal - equivalent to almost a year of European coal use - into chemicals, oil and gas, according to the China National Petroleum and Chemical Planning Institute."
https://www.reuters.com/sustainability/climate-energy/chines...
"China’s power sector is undergoing a visible transformation. Electricity demand rose by 5% between 2024 and 2025, reaching 10,368 TWh, yet coal-fired generation declined by 113 TWh to 6,294 TWh in a year, reducing its share in the power mix. The entire increment in electricity demand was absorbed by nuclear and renewable sources, whose combined output rose by 617 TWh. On paper, this reflects a decisive shift away from coal and toward low-carbon energy. In practice, however, coal is not disappearing from China’s industry – it is being redirected."
"Coal-to-liquids (CTL) and coal-to-chemicals (CTC) technologies provide the missing link. Using Fischer-Tropsch synthesis, coal can be converted into synthetic liquid fuels such as diesel, gasoline, and naphtha, as well as petrochemical feedstocks including olefins for plastics production. China and South Africa are the only countries operating CTL and CTC at an industrial scale. China alone consumes hundreds of millions of tonnes of coal annually (380 million tonnes as reported by the IEA) for chemical and synthetic fuel production. It is important to note that the largest part of this demand goes into the CTC industry. China has effectively replaced gas as its main feedstock for ammonia and methanol production with raw coal, to the extent that roughly 80% of these chemicals’ output is now fed by coal."
https://oilprice.com/Energy/Coal/Chinas-Renewable-Boom-Masks...
This is actually not the first major energy transition.
The world moved from coal to oil for transport and shipping fairly quickly due to the higher energy density and significantly easier handling of liquid vs solid fuels. Using pipes and tubes was a huge labor savings compared to having people shovel coal into a hard to control boiler.
Automatic mechanical stokers replaced people with shovels long ago. Nobody has shoveled coal in a boiler room since the era of the Titanic. Oil is still easier to handle in ships (or really any transport) though.
Saudi Arabia can profit at those prices, but it can't sustain its living standards at those prices unless they pump like crazy. I recall reading that it was around 40 bucks a barrel where things would start looking not ideal for the princes.
Oil and gas is more valuable for other uses besides burning it up into thin air. Humans have just been pretty sloppy any country that has plenty of oil and gas won’t go broke.
Saudi Arabia needs oil prices at ~$86.60/barrel to balance their budget, per Bloomberg. It is not the marginal cost to pump a barrel, but what a country needs to support their sticky spending from previously assured energy exports. Governments will collapse long before we approach low single digit oil prices on the global market.
The World Is Awash With Oil and Prices Are Poised to Keep Falling - https://www.bloomberg.com/graphics/2025-global-oil-supply-pr... | https://archive.today/hkhtI - December 18th, 2025 (Control -F "Crude Price Forecasts Are Below Levels Needed for Budgets")
> China with [EVs|Solar|BESS|Turbines] will replace all of the fossil fuel countries (US, middle-east, Russia). This is probably the biggest transition in the history of mankind. This is energy production, storage and all the appliances that use electricity. After this, its incredibly hard for any other country to compete.
Strongly agree. China is replacing petrostate economic demand with demand for their clean tech products, which keeps their deflationary economy afloat, provides them soft power, and will transition the yuan to a global reserve currency. Today countries by dollars to by petroleum ("petrodollar"); tomorrow, countries will want yuan to buy "manufacturing fiat," to trade with the world's factory (China is 1/3rd of global manufacturing capacity, as of this comment). Stocks of assets vs flows of energy.
Indeed. Electricity will be the only abstraction layer of energy, all end uses (transportation, cooking, heating, cooling, appliances) will switch to electricity.
Electricity can be generated from any source (dirty + clean), but the abstraction layer of electricity will allow the grid to continuously increase the clean fuels. It helps that the cleanest is also the cheapest. Solar panels are cheap as dirt. In 1975, a solar PV module cost $128.27 per watt. In 2026 it costs $0.1 - $0.2 per watt, a thousand times cheaper. In 1975, only satellites could afford solar. Today, its the cheapest source of energy.
China will be an electrostate. Are there any other electrostates? Maybe Bhutan, Costa Rica, but they are too small.
You are assuming that carbon negative countries are all electrostates. That's not true at all. Carbon negative countries due to their low GDP are very far behind on electrification. Just look up the percentage of new car sales that are electric on each of those countries. It's around 5%. They are carbon negative because their population is small enough to have most of the country still covered in virgin jungles and forests. They are big enough to offset the carbon emissions of the existing population. Also due to low GDP, they don't consume much energy and houses are small. For example most people don't run AC most the time unlike the US or don't have AC at all. Houses are usually 50 to 100 square meters. Electric service is 120 amps at 120 volts split phase. That's just 14 kilowatts.
> China will be an electrostate. Are there any other electrostates? Maybe Bhutan, Costa Rica, but they are too small.
China for sure. The rest will come as they replace the last of coal and fossil gas with anything low carbon, solar, wind hydro, as well as the necessary battery storage and transmission for energy orchestration and agility. Like Norway is already at 100% of EV sales and other countries are still close to 0%, we're simply observing a global energy transition horse race. Exciting time to be on the timeline imho.
Ember Energy: Global Electricity Review 2026: Solar surge halts fossil generation rise as clean power meets all demand growth and renewables overtake coal - https://ember-energy.org/latest-insights/global-electricity-... - April 21st, 2026
The ‘profound’ global impact of China’s rise as an electrostate - https://www.ft.com/content/013e8a27-ade5-48ed-8f2e-ffbf70cc5... | https://archive.today/J0bew - October 10th, 2025
China is currently pursuing all types of energy/solutions. They are not stuck on any particular one, is that because they’re run by engineers instead of lawyers/MBA’s…
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If you buy yuan just to turn around and spend them you aren't holding the yuan.
But China is already in decline before reaching this ascendancy.
I think new models will result in new structures, not just a switch from the US to China.
Sure. What difference does it make if they're 1.2b or 800m. It's still huge by any metric.
A multipolar world where every pole is a decadent husk or a former (or not even former) great empire.
Yeah, sounds about right for this timeline.
China's population is declining while building and operating the largest fleet of manufacturing robotics in the world. The US population is not declining as quickly while having limited capability to do anything. A recent example is $500M of taxpayer dollars spent on a munition manufacturing facility that did not build a single munition.
The US has coasted just about as far as it can go on it's exorbitant privilege while failing to invest in the future.
TLDR China builds, and will continue to build long into the future, the US prospers (for now) from financialization but cannot build, nor has the will to attempt to.
China Makes AI-powered Robots Core of National Strategy: China´s 15th Five-Year Plan (2026-2030) marks pivot to innovation - https://en.wikipedia.org/wiki/Exorbitant_privilege
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But, how much of the extracted oil becomes ICE fuel? Because other transports cannot be converted that quick (air, sea...) and most if not all petrochemical industries will still need to exist even if all cars drive electric. So how big will be the effect of crashing fuel demand?
25% of oil production is for cars
16% for trucks and buses
7% for aviation
4% for shipping
2% for rail and domestic waterways
25% + a chunk of the 16% (city buses, shorter distance or smaller trucks, etc) is a good amount.
https://www.statista.com/statistics/307194/top-oil-consuming...
About 6% is for plastics. That isn't going away anytime soon, but it also doesn't release much carbon, it's mostly just changing form from liquid to solid.
There's no reason to separate cars from trucks and buses. Everything is getting electrified. In jurisdictions where Buy America Act doesn't apply (i.e. the world outside the US), electric buses are already the default.
Moreover, it takes a lot of oil to refine and transport oil. If there's no demand for road transport, then the corresponding demand for refining and transport will disappear as well.
Finally, coal is already replacing oil in the chemical industry. Not because it's cleaner, but because it's cheaper and more available.
You mean a good amount of the 46% consumed by road transports. So my napkin says, when we all switch to driving EV the oil demand will drop by 15%. It's something for sure, but not overly dramatic (to me).
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I would add energy generation to ICE fuel. This is about 84-86% of total I believe
This, and it's murky because a good chunk of that used directly by ICE will move over to power generation to power EVs -- it's not as if we're anywhere close to 100% renewable power even just for EVs here.
There's a good EIA graph about halfway down on https://www.weforum.org/stories/climate-action/us-fossil-fue... that breaks it down.
If the price were to drop all the way down to $10/barrel, demand would skyrocket.
The future where oil demand is so low and and will remain low even after low prices is much further ahead I'm afraid.
China is much more of a "fossil fuel country" than the US. They've got a ways to go to even catch up.
https://ourworldindata.org/grapher/energy-mix?tab=stacked-di...
I think you're not telling the full story with that chart. https://ourworldindata.org/grapher/energy-mix?tab=line&stack...
87.5% vs 83.1%
Renewables have to go up by 10x (or more, with electrification of all the things) everywhere pretty much in the coming decades.
Thorium Reactors?
Look closely at China, they are pursuing all forms of energy Solar, Wind, Gas, Oil, Nuclear and even new Thorium reactors (Courtesy of Oak Ridge, Tennessee) and all forms of batteries Lithium/Sodium ion they are not resting on their laurels anywhere they are willing to use anything, and are open to any solution that works.
https://www.neimagazine.com/news/china-refuels-thorium-react...
https://china-environment-news.net/2025/06/01/world-first-ch...
The Chinese are not limiting themselves to just one solution or two they are pursuing all types of technology all types of energy they seem to have an open mind is this where/becuase the oligarchs don’t get to call the shots in their system?
Uh, that chart shows they source a greater percentage of their power from renewables than we do with the exception of nuclear and biofuels. Their wind, solar and hydropower bars are all wider, and they're building more nuclear.
They just don't have our easy-access shale fields. If it wasn't for fracking our coal percentage would likely be just as high