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Andreas de Vries & Salman Ghouri

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Can We Expect Oil Demand To Slow Anytime Soon?

Oil Barrels

The true foresight on which competitive advantages are built does not result from extrapolations of past experience. It results from early identification of the trends that will be driving a market, which often means understanding what consumers will like before they know it themselves, coupled with understanding how these trends will be affecting the market, before they actually have. Forecasting oil demand on this basis leads to interesting – and for some shocking – insights.

Current Oil Demand

Since global oil demand results from a number of different segments of the global economy, each of which is impacted by different trends, current oil demand first needs to broken down to its main components before a trend-based forecast can be developed. 

According to data from the international energy agency (IEA), at present the largest driver for oil demand is transportation, being responsible for approximately 56 percent of total oil demand, some 52 million barrels per day (mb/d) in 2015. Second is industrial demand from industries such as iron, steel, cement production, construction and mining, who together make up 15 percent of global oil demand, or 14 mb/d. Petrochemicals are third, being responsible for 12 percent of global oil demand, or 11 mb/d, while power generation is fourth with 6 percent, or 6 mb/d. The remaining 11 percent of global demand, or 10 mb/d, comes from a range of different industries such as agriculture, bitumen and lubricants.

Transportation, the largest driver for oil demand, is by no means a homogenous group, however, since it consists of the components passenger vehicles (25 mb/d), commercial vehicles (17 mb/d), aviation (6 mb/d) and marine (5 mb/d). Some of the components of transportation are larger drivers for oil demand than the non-transportation drivers. A trend-based forecast of global oil demand therefore requires a breakdown of current oil demand like that of graph 1.

(Click to enlarge)

Graph 1: A segmental breakdown of current oil demand

Passenger Vehicle Trends

While the total number of passenger driven light vehicles (PDLVs) on the road will most likely continue to increase, in particular in places such as China and India, the extent to which this will drive an increase in crude oil demand is debatable.

Under pressure from tightening emissions regulations, passenger vehicle fuel economy has improved substantially over recent years. In the United States, for example, the sales weighted average for fuel economy has increased from 20.8 mpg in 2008 to 25.1 mpg in 2017 – a 25 percent increase despite a trend toward larger vehicles (SUVs) amongst consumers. And there is no reason to assume that sometime in the near future this trend will suddenly end. Related: Goldman Sachs Warns Of Global Oil Demand Peak

What is very likely, however, is a gradual increase in the share of electric vehicles (EVs) in the global passenger vehicle pool, as fundamentally, EVs can meet the transportation need of consumers in a manner that is superior to what conventional internal combustion vehicles (ICEVs) offer – more seating and storage space for an equal size, faster yet smoother acceleration and deceleration, less maintenance, greater reliability, and lower environmental and noise pollution, amongst other things. Recent additions to the range of EV models available have essentially already kicked off this electrification revolution. These cars, such as Chevrolet’s Bolt and the Tesla models, offer a driving range that well exceeds the needs of a typical daily commute, and that is essentially on par with the range offered by ICEVs. Driven by improvements in battery technology, the lifetime ownership cost of these EVs is also inching closer to that of ICEVs. Already, the EV’s cost of operation (fuel) and maintenance is well below that of ICEVs. By the middle of the 2020s, battery technology is expected to have improved to the point where EVs are cheaper to produce than ICEVs, at which point EVs will outperform ICEVs on a cost-basis comprehensively and become the preferred passenger vehicle option (“no brainer”) in most parts of the world. (Interestingly, the two countries that are expected to drive growth in the global vehicle pool, China and India, are also the ones pursuing electrification of their vehicle fleet most aggressively.)

This would mean that the stock of ICEVs should be expected to stop growing as of the middle of the 2020s and enter a period of gradual decline thereafter. (Since the typical lifetime of an ICEV is 10 – 15 years in developed economies, and 15 – 20 years in the developing world, it is not unreasonable to expect, as some have argued, that by 2040 all miles driven will be electric and oil demand from passenger vehicles will have decreased to essentially zero.)

Commercial Vehicle Trends

For a trend-based forecast, Commercial Vehicles should be further subdivided in three sub-components, being light commercial vehicles (LCVs) that are designed to transport goods over shorter distances, heavy commercial vehicles (HCVs) that are designed to transport goods over longer distances, and busses that transport people.

As a group, Commercial Vehicles have been a major factor in global oil demand growth over recent years, adding nearly 6 mb/d to global growth since 2000. For some of its segments electrification is by now a clear trend, however, raising doubts as to how much exactly Commercial Vehicles will drive oil demand growth in the future.

For example, the electrification of busses is already taking place. This is because the task busses perform can be electrified relatively easily, while the benefits of doing so are substantial. Most busses drive short, inner city routes, covering distances that current battery technology can already manage. Because the utilization rate of busses is much higher than that of PDLVs, and their driving is characterized by continuous stop-and-go, the potential benefits of electrification are actually greater than in the case of PDLVs. For this reason countries and cities around the world have enacted plans to electrify their bus fleet, in order to promote bus usage (by providing bus users a much smoother stop-and-go experience), capture monetary savings on maintenance and fuel, cut inner city emissions and reduce noise pollution. The electrification of busses should therefore be expected to pick up pace during the 2020s. (Some expect that by 2030 the bus sub-component of Commercial Vehicles will be electrified to a large extent already.) This means that oil demand growth associated with busses should be expected to diminish from the second half of the 2020s onward, and might even turn negative from 2030 onward.

For LCVs electrification offers similar benefits as for busses, but the challenge of practically making it happen is greater as since the use of LCVs is more diverse. Consequently, for certain uses electrification makes more sense – and is as a result more advanced – than for others, but in general it is well behind the electrification of PDLVs and even that of busses. LCV linked oil demand should therefore be expected to continue to grow in line with economic growth well into the 2020s, and possibly even beyond that. The risk to this demand growth is regulation, however, as many cities today are considering putting in place limits on truck traffic – some have already put policies in place that will ban diesels from their inner cities by 2025. This regulatory trend can drive investment and innovation in electrified LCVs, which could speed up overall electrification of the segment by lowering the cost at which the benefits of electrification can be achieved.

HCVs least lend themselves to electrification as they tend to be used for heavy duty, long haul trucking. Some companies are currently looking at ways through which this task could be electrified, but for the segment as a whole this still seems a long way out. However, the Paris Accord will have implications for emissions standards in the countries that have signed up to it, and the HCV segment of Commercial Vehicles in particular will be challenged by this as it is one of the largest contributors to overall emissions. At a minimum, this will drive a focus on fuel efficiency in the segment, which would have as a consequence that going forward, oil demand from HCVs will continue to grow in line with economic growth but at an overall lower pace than what has been experienced in the past 15 years. Another yet less likely possibility is that the segment shifts from diesel to alternate fuels such as compressed natural gas (CNG) and liquid natural gas (LNG), which some companies at least are already betting on will happen.

Aviation Trends

Aviation is a bright spot when it comes to future oil demand, as the segment is expected to double over the next two decades. At a substantial 2.5 percent annually, growth in Europe is forecasted to be the slowest of all the world’s regions. The Asia Pacific region will add the most new flyers, with China expected to add 817 million passengers a year by 2035, India 322 million, Indonesia 135 million and Vietnam 112 million. The United States is expected to add 484 million passengers a year by 2035.

Electrification of aviation is not expected before at least another 20 years, which means that the growth in aviation will be a strong driver for oil demand growth.

Marine Trends

Oil demand related to marine has over the past 75 years benefitted greatly from the globalization trend. Since the 1950s the growth rate of international trade has almost consistently been twice that of economic activity as a whole. From 2000 to 2008 world trade increased by an average 5.4 percent each year, while economic activity increased by only 3 percent. Marine transport has consequently seen massive growth.

Since 2015, however, the IMF has been warning that the prospect for global growth is, at best, “mediocre”, which would seriously undermine Marine’s ability to continue to drive oil demand upwards.

A further risk for Marine’s ability to continue to drive oil demand is the populism trend in politics. This has the potential of forcing globalization into reverse (which according to some has already happened), namely, through economic policies that switch focus towards regionalization or even localization of manufacturing (“America First”).

Most important for Marine’s ability to continue to drive oil demand is the International Marine Organization’s (IMO) recent tightening of the sulphur limit for marine bunker fuel. This requirement could be met through adjustments to the refining process used for the production of bunker fuel (hydrotreating, requiring investment from the refiners), or installation of “scrubbers” on board vessels to remove sulphur from the exhaust fumes (requiring investments from the ship owners). A third option is to switch Marine from oil based bunker fuels to LNG. Some of the biggest players in the LNG industry are pushing for this switch, through investments in LNG-fueling stations in ports around the world, hoping it will enable them to remove some of the supply glut LNG is currently facing. In the short term a majority of the existing vessel fleet will most likely opt for the purchasing of ultra-low sulphur bunker fuel or the installation of scrubbers in order to meet the new marine fuel bunker regulations. Vessels currently under design could more easily opt for the LNG options, however, which means that medium to longer term LNG powered vessels should be expected to become more common.

The most optimistic outlook for Marine associated oil demand is therefore continued growth, but at a substantially lower level than during the past 15 years due to lower global economic growth and the beginnings of fuel substitution.

Other Industry Trend

The Paris Climate Accord also poses a substantial challenge for energy intensive industries such as steel, aluminum, cement and paper. In order to deliver on the targets defined in the Paris Accord these industries will have to switch from “higher carbon fuels” such as coal and oil to natural gas, while at the same time implementing new technologies that substantially improve energy efficiency, as processes that are truly “zero carbon”, such as those based on hydrogen or renewable electricity, are not yet realistic alternatives.

This will be no small feat to achieve, however, as in many cases these changes require significant – and thus expensive – retrofits to existing plants. Also holding back these investments is what could be called “first mover disadvantage”, i.e. the first to implement the necessary changes will also be the first one to incur the costs, resulting in a disadvantage in the international market place.

For practical reasons oil demand from industries such as steel, aluminum, cement and paper should therefore be expected to continue to grow in line with overall economic growth.

Petrochemical Trends

Over the past 50 years plastics usage has increased twenty-fold, closely linked to economic growth. If this trend were to continue, plastics usage would double again in the next 20 years, driving up demand for both natural gas and refined oil products (Naphtha, LPG).

Behind these growth numbers is a global habit of use-and-dump when it comes to plastics. It is estimated that 8,300 million metric tons (Mt) have been produced over the years. 6,300 Mt of these are no longer in use, of which just 9 percent has been recycled. This use-and-dump has become an issue on a global scale. The realization that if left unaddressed, by 2050 the world’s oceans would contain more dumped plastics than fish, has lead to a number of trends that will affect plastics demand growth.


One of these trends is the substitution effect. Consumers are looking for sustainable alternatives over hydrocarbon based plastics, and governments are beginning to discourage or even prohibit the use of plastics in cases where plastics use can easily substituted (such as for example in the case of shopping bags in China and The Netherlands). Clearly, this trend will negatively affect impact plastics demand growth.

Another trend with regard to plastics is sustainable manufacturing. In response to the substitution trend amongst consumers, producers are looking at more sustainable ways to produce plastics. The so-called bioplastics niche of the petrochemical industry, in which plastics are produced from renewable feedstocks instead of crude oil derivatives or natural gas, has been one of its fastest growing sectors and is projected to maintain this pace.

For plastics the general concern about sustainability will probably also mean continued growth in recycling, which in and off itself would not impact plastics demand but would impact the oil demand resulting from demand.

All this has lead some analysts to conclude that plastics associated oil demand might have already peaked, i.e. that the petrochemical industry will not be driving further oil demand growth. A more conservative view is that plastics associated oil demand will continue to grow for the foreseeable future, but at a slower pace than heretofore.

Power Generation Trends

Oil or oil derivatives based electricity generation is amongst the most costly ways to produce electricity. For this reason the share of electricity produced from oil sources has decreased steadily since at least 1960. Today oil or oil derivatives based electricity generation makes up just 4 percent of global electricity generation. Related: Falling Chinese Demand May Be OPEC’s Biggest Dilemma

Technological progress has made wind and solar energy a viable option for ever more regions of the world. In many parts of the world wind and solar can now cost-compete with coal and natural gas, traditionally the lowest cost feedstocks for power generation, as a consequence of which many of the countries that have a dependency on oil or oil derivatives for power generation are moving forward with plans to remove this dependency.

Power generation will therefore not be driving oil demand. Rather, it should be expected to reduce oil demand.

Overall Assessment

It is hard to deny that the electrification of transport, consumer environmental concern and the implications of the Paris Accord are severe challenges for the oil industry. Nevertheless, many have argued that oil demand will continue to grow. A segmental, trend-based-analysis of future oil demand shows this expectation is highly doubtful since essentially all segments are experiencing trends that will adversely affect their oil demand. For some these trends are more acute (transportation related demand) than for other (industry related demand), but they are there for all.

This means, firstly, that it is most likely that oil demand growth will soon break with the past and start a new trajectory, where it first slows down (2020s), then disappears (2030s), and ultimately shoots into fast reverse (2040s). And secondly, that there will be substantial shifts in the product-composition of oil demand (diesel versus gasoline versus jet fuel, et cetera).

Of course, if global growth were to break with its recent past and suddenly pick up again, and implementation of the Paris Accord is delayed, and the consumer concern about the environment and enthusiasm for electric vehicles were to fade away, oil demand could continue its past growth path for another two decades. But how realistic are these assumptions?

By Andreas de Vries and Salman Ghouri for Oilprice.com

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Leave a comment
  • Nick on August 08 2017 said:
    Wow. Not a single word about the current subsidies supporting the purchase of passenger electric vehicles. And not a single word about the drastic drop in demand for electric vehicles that has taken place when these subsidies are reduced or eliminated.
  • snoopyloopy on August 08 2017 said:
    If certain segments of the market start contracting, the total market will also contract, or at least stagnate. If transportation accounts for over 50% of current total demand and there are headwinds on basically all sectors of use, the best case scenario is that the market in a decade is the same size as the current market. A mass shift to electrification, especially which is likely once Tesla releases their semi later this year, will likely reduce demand even faster than growth. So how is the total oil market going to grow when the main drivers of growth no longer exist?
  • Citizen Oil on August 08 2017 said:
    These are some aggressive timelines. Have you taken any trips/vacations to the USA ? The biggest consumer of oil for transport on the planet ? Yukons, Suburbans, Escalades, Tahoes, etc, etc are the norm. Your predictions may happen one day but definitely the timeline you propose. I personally am not American but will never buy an electric vehicle if I'm not forced to and I imagine most in the USA will concur.
  • John Keller on August 08 2017 said:
    The author doesn't explain who is going to buy electric vehicles, especially ones that cost $40,000 with a subsidy or no subsidy. Are emerging market consumers with average incomes of $5,000-10,000? The author must believe that the cost of EV's is going to be cut by 2/3. Not going to happen with the prices of inputs (cobalt, lithium, etc.) for EV batteries doubling. His beloved Tesla might not even be around come 2025. Also, the author states:

    "EVs can meet the transportation need of consumers in a manner that is superior to what conventional internal combustion vehicles (ICEVs) offer – more seating and storage space for an equal size, faster yet smoother acceleration and deceleration, less maintenance, greater reliability, and lower environmental and noise pollution, amongst other things."

    Most of those are false. Less maintenance? Greater reliability? Totally false. He should read up on Tesla's problems. EV will be a niche product for wealthy drivers for the foreseeable future.
  • Marcus Rönningås on August 09 2017 said:
    For us it was a quite simple decission:
    1. Economy. There are a EV's than Tesla with much, much better prices. The Ioniq we got was slightly higher in purchase price compared to similar ICE/Hybrids, but owning and driving it is almost a 10'th of the cost compared to similar vehicvle. We are not a high income family, so the total cost was very important to us.
    2. Environment. Zero CO2 emissions, as long as I "fuel it" at home, that is. Which we will for most of the time.

    However, if you don't have the possibility to charge your EV at home or work, or if you drive very, very long distances each and every day, then an ICE/Hybrid could be the better option.

    But if you can charge the vehicle at home/work and if you only drive ~200 km (124 miles) / day the question is not why to buy or consider an EV, but why not to consider or buy one. Besides personal opinions ofcourse. And the latter seems to be the major argument on both sides of the electrical fence..
  • TM on August 09 2017 said:
    @ Nick: You state "Not a single word about the current subsidies supporting the purchase of passenger electric vehicles. And not a single word about the drastic drop in demand for electric vehicles that has taken place when these subsidies are reduced or eliminated". Please bear in mind the following: 1) The subsidies that EVs get are nothing compared to the subsidies that the fossil fuel industry receives on a global basis. So if subsidies are the problem, then let's eliminate all of them, but this would damage the fossil fuels industry more than the renewable energy industry (current trends show solar and wind are already competitive with the cheapest fossil sources of energy) 2) EVs will become cheaper than ICEs cars between 2020 and 2025; It's not a matter of if, just a matter of when. Once they become cheaper (and there is growing consensus among experts and automakers that this will happen) they will become a no brainer and the ICE will start fading away. It will still take years so don't get so nervous and defensive oil guys, just adapt to this new era. That's what winners do. You still have time for it. Those who fail to adapt will become the losers. That's the great thing about capitalism, it's like mother nature. (PS:@ Nick and Citizen Oil: Pay attention to what's happenning with Tesla Model 3; Some EVs are already an object of desire for hundreds of thousands of consumers, and everything indicates they will soon become millions. After all, you can generate your own electricity but you can't easily refine fossil fuels at home to make your own gasoline. You don't need to be a genius to understand what's best for a consumer. Enough said).
  • Idon'tknow on August 09 2017 said:
    This was a good article for a 10 year old essay. Not that I'm a fan of O&G or any other industry, but guys come with some facts, numbers, evidences when you writing articles. Everybody knows O&G is screwed if EVs become affordable, but THEY ARE NOT. I leave in Canada and you have to pay $1600 for monthly lease of a Tesla, and by the way the electricity cost is ridiculous here, because everything is nuclear or hydroelectric (wait a minute shouldn't these things be cheaper than fossil based power plants as advertised everyday in news!!!).
  • Marcus Rönningås on August 09 2017 said:
    @Idon'tknow $1600 for a tesla was rediculous. We pay ~$495 for the Hyndai Ioniq and the electricity price is $0,12 / kWh at home including COO.

    We also tested the Nissan Leaf and the BMW I3, but the Ioniq was better for us since we are a family of 4.
  • William Livingston on August 09 2017 said:
    Granted, EVs probably will serve the needs of most vehicle drivers, but until the day comes when a EV pickup is on the market, ICE propelled F-150s will continue to sell like hotcakes and unless that Epickup can pull a loaded horse trailer through four inches of snow, it won't entirely replace the ICE F-150.
  • William Livingston on August 09 2017 said:
    While EVs may serve most folks' driving needs the ICE F-150 will continue to sell like hotcakes.

    Should a DEpickup hit the market even it won't replace the F-150 unless it is capable of towing a loaded horse trailer through four inches of snow
  • William Livingston on August 09 2017 said:
    Although a EV may serve most folks' driving needs unless a Epickup appears on the market, the F-150 is going to continue to sell like hotcakes.

    Even if a Epickup should appear, the ICE F-150 will continue to dominate the market unless the E version is able of pulling a loaded horse trailer through four inches of snow.
  • Independence01776 on August 09 2017 said:
    Looking at historic trends to predict the future demand of new innovations is going to be very inaccurate. In 1900 no one would have seen the trend in autos. By 1915, you couldn't find a horse in major cities. Same is likely to occur for EV's and thus change our energy equation.

    Ask a couple of questions and you soon have the answer.
    1) Are EV's better vehicles than ICE. On power, safety, comfort, they seem to be. If not, then why is Tesla the number 1 seller in the high end sedan market. Why are cities switching to electric buses. How does Tesla attract 500,000 orders for a vehicle that is just starting to be produced. If you still disagree there's no reason to read point 2.
    2) Then the next question is are EV's going to be cheaper than ICE vehicles. With battery prices dropping 10% per year and with less than 1/3 the parts of an ICE vehicle and having 1/5 the maintenance and operation cost, EV's certainly look to shake up the world just as soon as folks see greater selection, are comfortable with the infrastructure needed and prices are comparable for a wide variety of models. In fact one can easily make the argument the Tesla's model 3 (without subsidy) at 35 to 50,000 purchase price has a lower total cost of ownership than comparable ICE vehicles. you'll save 1 to 2,000 per year in operations cost.

    My guess is sedans, which were 1.5% EV sales in the US in 2015, and 2.2% in 2016, and are currently running at 3.3% for 2017, and are set to be near 10% for 2018 now that new EV's are coming to market.

    One could easily see this type of trend as prices for EV's continue to decline rapidly.

    US EV Vehicle Sales as pct of total

    Year Sedan EV Sales Light Trucks EV sales (Pickups / SUV's)
    2018 - 10% 0%
    2019 - 18% 1%
    2020 - 30% 5%
    2021 60% 20%
    2022 85% 60%
    2023 95% 80%
  • snoopyloopy on August 09 2017 said:
    @John Keller
    You keep focusing on the greater-than $40k EV and Tesla reliability, but there are many options that are both not Tesla and cost under $40k to get into. Nissan continues to offer discounts on the Leaf that effectively halve the MSRP, which is listed at ~$31k. Options like the IoniqEV and e-Golf have triple the range the average driver drives a day and start at under $30k and the Smart ForTwo ED starts under $25k. Before incentives. In the right states, the incentives can lower the out-the-door price into the teens, which makes them much cheaper than most other alternatives. (The incentives are also what decimates values on the used marketplace.) But while the depreciation is brutal, it does create deals that make it easy for people to get into an EV fairly cheaply and after discovering all the benefits of driving an electric, most people have little desire to own another car that isn't. (Also, with all the money they saved, they can afford the EV that costs more than $40k.) Every person that happens to is another lost customer in the future for a gas-powered vehicle if they can help it. The first mover in each market segment of vehicle will have a significant advantage, especially as prices decline. (Just look at Tesla in the large luxury segment. They've gobbled over 25% of the market and there's already evidence that suggests that the Model 3 is depressing sales of entry-level luxury sedans like the BMW 3-series.) Everyone else will be left scrambling to survive.
  • Disgruntled on August 16 2017 said:
    My goodness, the passion that people have for EVs . . . I still ask, where will the electricity come from? Something has to blow, flow, or glow for electricity to be generated. [Wasn't that a cute commentator above that said "you can generate your own electricity but you can't generate your own gasoline." Precious] I think we are using about 10 million barrels of gasoline per day in the United States and we're going to displace that by when again? It takes approximately 1/8th of a MCF of natural gas to equal a gallon of gasoline, except you have to burn the natural gas to turn a turbine to generate electricity so there's some loss right there and I'll leave that to the engineers to quantify. But in rough numbers, it will take 52,000,000 MCF, or as we say in the industry 52 BCF (billion cubic feet) of gas EVERY DAY to displace the amount of gasoline we're currently using, plus the energy loss in generating the electricity. And it will take natural gas. There simply aren't enough spaces for windmills to generate that much electricity, nor solar arrays unless that's all we want to see when we step out of our houses. You see, there are no miracles when it comes to performing work, that is, moving an object of any given mass some given distance at some given speed.

    To move any object, work must be performed. Energy must be available. Solar/wind, under the present technology, will never supply enough energy to power the world's vehicle fleet to any great degree. The following was taken from Wikipedia. If you want to skip it, at least read the final sentence.

    The work done by a constant force of magnitude F on a point that moves a displacement (not distance) s in the direction of the force is the product


    For example, if a force of 10 newtons (F = 10 N) acts along a point that travels 2 metres (s = 2 m), then it does the work W = (10 N)(2 m) = 20 N m = 20 J. This is approximately the work done lifting a 1 kg weight from ground to over a person's head against the force of gravity. Notice that the work is doubled either by lifting twice the weight the same distance or by lifting the same weight twice the distance.

    Work is closely related to energy. The work-energy principle states that an increase in the kinetic energy of a rigid body is caused by an equal amount of positive work done on the body by the resultant force acting on that body. Conversely, a decrease in kinetic energy is caused by an equal amount of negative work done by the resultant force.

    From Newton's second law, it can be shown that work on a free (no fields), rigid (no internal degrees of freedom) body, is equal to the change in kinetic energy of the velocity and rotation of that body,
    W=Delta KE.

    The work of forces generated by a potential function is known as potential energy and the forces are said to be conservative. Therefore, work on an object that is merely displaced in a conservative force field, without change in velocity or rotation, is equal to minus the change of potential energy of the object,

    W=-Delta PE.

    These formulas demonstrate that work is the energy associated with the action of a force, so work subsequently possesses the physical dimensions, and units, of energy.

    The work/energy principles discussed here are identical to Electric work/energy principles.
  • Molar on August 16 2017 said:
    EV's are going to have to be equally as cheap as ICE vehicles for any of this to come to fruition. I'm not sure that's obvious at this point in time. Will upscaling EV volumes to equal ICEV volume be possible with the current natural resources available? Over a billion cars seems like a lot of lithium.
  • Marcus Rönningås on August 18 2017 said:
    I won't say I have a passion for EV's since it's only 1 of 3 cars we own that is a pure EV. But maybee a small crush.

    Anyway, regarding consumtion I did some math for a vision of 100 % EV's in Sweden - that probably wont happen during my lifetime. But this is what I found:
    -We have almost 4 800 000 cars in Sweden - population just over 10 000 000.
    -We drive in general 12240 km / year (7606 miles)
    -If the consumtion of the EV is 1,5 kWh/10 km (~2,41 kWh/mile) then the total consumtion of electricity from 100 % EV's in Sweden would be ~8,8 Twh
    - 8 TWh is ~6 % of Swedens electricity production. As comparision, Sweden produce more than 15 TWh wind today, and that is growing.

    Hence, I would not say that EV's will cause any major problems in terms of electricity production. I'm loading during nighttime - which basically everyone would do. Not because it is cheaper or to avoid peaks, but because anything else would not make sense.

    Ofcourse there are cases where an EV won't be a feasible car. But within a few years ?? Well, that's anyones guess.
  • Bob Wallace on September 06 2017 said:
    Let me suggest another possible development that could drive down oil demand faster.

    Assume we have functioning self-driving cars somewhere between 2020 and 2025. Almost as soon as they become available we should start seeing fleets of self-driving taxis on our streets. Uber has already tried to contract for 500,000 self-driving EVs and GM bought a large portion of Lyft (and Uber-like service).

    Robotaxis. Call for a ride (or set up your commute schedule). If the EVs in the fleet average five different passengers per day then each will be paying for a 5th of the car. Not for an entire car that sits parked for 90% of the time. And it will be an EV so less per mile.

    If you are willing to ride share (which we do in buses, subways, and planes) then the cost drops even further. Average 2 people per car per mile and the low rate drops again to about half.

    Now, suppose you are a working person with a thin budget. Your car needs a few hundred dollars repairs (new alternator or fuel pump, for example). You've got little cash and your credit card is maxed. You phone for a robotaxi and discover the benefit of riding cheaper than driving yourself plus not having to worry about the car breaking down.

    Or an older person who is tired of driving and would love to be driven.

    Or a student with not much money to spend on a car.

    These people plus the folks who have a boring daily commute are likely to quit driving and use robotaxis. All the ICEVs they would have been driving won't be using fuel.

    One EV going into robotaxi service might take five or more ICEVs off the road.
    Tony Seba at Stanford has suggested that one robotaxi could take 10 ICEVs off the road but that seems a bit extreme to me. But three, five or ten - there could be a very large multiplier effect which could crash oil demand.
  • Northern Fox on November 03 2017 said:
    Why is the discussion around oil demand and EVs always so polarized? It seems like almost everyone is either in the camp of unrealistically optimistic EV adoption rates, or unrealistically pessimistic EV adoption rates. I think the analysis provided in the article is quite reasonable. Even then, ICE vehicles are still going to be around for at least 2-3 decades to come. The point that the authors are trying to make is that there will be increasing headwinds to oil demand. This will likely slow oil demand growth over the next decade, until growth turns negative (i.e. using less oil on an absolute basis).

    At the same time, I see people on the other side throwing around crazy statistics that don't seem to be unhinged from facts and reality (e.g. 90% of new vehicles will be EVs in 5 years). I think a lot of this has to do with localized myopia. We focus so much on passenger cars in large western cities, but at the end of the day this is still a pretty small piece of the overall oil demand pie. For example, in Canada, only about 5% of our annual greenhouse gas emissions are attributable to passenger cars. If every Canadian were to suddenly start driving an EV overnight, the GHG reduction would be relatively modest (considering that many places in the country still rely heavily on natural gas for electricity generation).

    A little moderation from both sides of the argument would go a long way.

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