An Economy On the Rocks

So let's talk about ice. Specifically, ice in Odyssey.

At Fanfest CCP Fozzie released a dev blog describing what the plans are for resource balancing in the brave new expansion, and the part about ice mining has this to say:

Next we turn our attention to mining of a cooler kind. Ice mining provides the materials used to fuel New Eden’s thousands of Starbases, and the movements of massive capital fleets across the stars. These materials play a crucial role in EVE’s economy, but the mechanics around ice harvesting have not created a dynamic or interesting feature until now. New Eden currently enjoys a massive oversupply of ice, which stifles competition and emergent gameplay with the notable exception of a few specific organized ice interdictions performed by some very ambitious players. At current levels of ice product usage, all of the ice needed for the entire game could be provided by only four ice belts (one of each ice type). We at CCP want ice harvesting to be a lucrative activity that encourages players to relocate and compete for a piece of the pie. However we also must be careful not to cause the price of isotopes to rise beyond the means of most Starbase operators. We put a lot of thought into how we would walk this tightrope, and we believe we have found a strong solution.

 To summarize the changes:
- ice belts being removed, replaced by ice anomalies in the same system (with some exceptions)
- reducing the cycle time of all ice harvesters by 50%

The goal is apparently this:

The amount of ice found in these sites will be tuned to ensure that most, but not all, of the ice needs of the New Eden cluster can be provided by high security belts. At our current numbers, the maximum supply of ice from highsec (assuming that each belt is mined out completely five times a day) would provide approximately 80% of the game's ice needs, ensuring that at least some of the ice mining must be undertaken in lower security space. For context, this means that highsec will still be a large exporter of ice products, being able to generate eight times the volume of isotopes used by highsec control towers.

Does current ice production from high sec meet all of the cluster's ice needs? I think it must since they are trying to adjust it to make it necessary to ice mine in null sec and low sec. Certainly ice rocks in static belts that have infinite ice would suggest its capable of doing so, and in that case we can talk about the effects of this change.

Prediction #1 - Supply of Ice will go Down

Even if low sec and null sec mining ops start happening to cover the shortfall of current needs, it will probably not be enough as AFK ice mining is pretty much been nerfed into the ground. Humans will need to be involved more often so ice mining pilots will be active less often and thus unable to generate as much ice per pilot over a day than before.

Prediction #2 - Ice Product Prices will Rise

As supply drops, prices will rise, probably with a spike right around Odyssey's deployment and then stabilizing at a higher average price overall in the long term.

Prediction #3 - Demand will Drop

While demand for Liquid Ozone will remain pretty much static due to its price inelasticity (i.e. jump freighters and capitals will continue to operate much the same as before despite price increases due to the insignificant cost of using the fuel compared to operating the vessel overall), a lot of POS owners may find that the profit margins of their operations may evaporate under the increased fuel prices (since the cost of running a POS is super-significant to its operation!). More than a few POSes all over New Eden will probably be torn down, especially in high sec.

Prediction #4 - Demand will Level Off with High Sec Providing 95% of the Ice

I think we'll see POS operations and ice prices dictate event such that high sec ends up providing most if not all of the ice the cluster needs, with some operations in null sec where alliances can control access and security, but no operations in low sec.

Prediction #5 - Ice Mining will have fewer Pilots

But those pilots will make more ISK per hour since the cycle times are increased and prices are higher.