(Permalink to this post: http://meetingthetwain.blogspot.com/2017/08/end-of-oil.html )
The End of Oil &
Rise of Electric Vehicles
"The stone age didn't end for lack of stones"
(Sheik Yamani - former Saudi Oil Minister)
Even the Wall St. Journal sees it coming!
First - 1900:
Second - 1913:
Someone entering first grade in 1900 would know only horses as "last mile" and personal transportation - unchanged since the dawn of history. That same person would graduate high school with horses hard to find among all the automobiles.
Electric Vehicles (EVs) are to internal combustion engine (ICE) cars as motor cars were to horses.
Growth of EVs on the roads
|From IEA publication at:|
Seba's point is that when change happens it can happen very, very fast. Electric vehicles (EVs), Seba argues, will replace internal combustion engines (ICEs) with equal rapidity. His argument is that while EVs represent only 1% of sales now, they have been doubling their sales every 2 years. If they continue on then another 2 years (2019) = 2%, then 4% in 2021, then 8%, 16%, etc., etc. putting the crossover year in 2030 - thirteen years from this year - 2017 - the same time it took autos to replace horses! What a coincidence!
|If EVs continue to double market share every two years|
|Market penetration rate of new technologies increases over time|
The most rapid adoptions are happening most recently as seen from above chart. The telephone took 60 years to go from 5% to 80% of US households. Cell phones took 10 years to do the same (see chart above):
The International Monetary Fund (IMF) published a working paper in May 2017 titled "Riding the Energy Transition: Oil Beyond 2040".
From the paper: Electric Vehicle adoption is happening at a faster rate than cars were adopted. As a minor but supportive note, if you look closely you can make out that e-bikes are being adopted faster than were motorcycles (click image to enlarge).
Same thing only clearer - red line (electric vehicles) growing at a faster rate from 2011 (at 0.07 per 1,000 people) than purple line (motor vehicles) - from 1900 (at 0.11 per thousand people):
As motor vehicles became more common, horses became less common - diminishing from 39 per 1,000 people in 1905 to 3 per 1,000 by 1930 as shown below (note logarithmic axis so growth is much faster than initially appears). Again, we see EVs growing faster than motor cars did. Will EVs replace motor cars faster than autos replaced horses?
As EVs gain market share, at some point it will become harder and harder to find gas stations and auto repair shops. The drive train for the standard motor car has about 2,000 moving parts - pistons, gears, belts, rotors, etc., etc. (see below).
|All the parts of an Internal Combustion Engine (ICE) car. Over 99% disappear in an Electric Vehicle.|
When Will Oil End?The same month the IMF paper was published, the Wall Street Journal, a conservative pro-business newspaper, reported essentially the same thing with the only issue in doubt being the timing.
Before getting into details, I want to note that "experts" have been spectacularly wrong about how fast new technologies are adopted. Seba's 13-year projection for 100% of all new cars being EVs was based on the incredibly rapid replacement of the horse with the motor car. That change in 1913 required enormous changes of infrastructure - massive numbers of oil refineries, gas stations, paved roads, mechanics and parts suppliers for maintenance. The EV needs an electrical outlet - we already have those.
Here are some views (as noted in the WSJ article):
IEA: "The Paris-based International Energy Agency argues that demand will grow, albeit slowly, past 2040" (WSJ, ibid) This is based on the assumption that countries won't do much to strengthen regulations to mitigate Green House Gas emissions (GHGe). If countries do impose restrictions on GHGe then the IEA predicts 2020 for peak demand.
BP: British Petroleum predicts 2040, but alternative scenarios based on the rate of shift to alternative fuels are labeled "fast" and "faster" predicting earlier and much earlier times for peak demand. BP is shifting investment to natural gas. BP has a carbon-neutral project: https://www.bptargetneutral.com/us/
Royal Dutch Shell: peak demand in 2025 to 2030. The CEO of Shell is getting an electric car. The CFO already has one. Shell is shifting investment to natural gas and renewables.
Statoil: peak demand in 2030. Norway's oil producing company sees a rapid shift to electric cars in both the developed and developing world (where gas is usually $6-$7 per gallon).
Total Oil Co: 2040. The French oil company uses the IEA scenarios.
Exxon, Aramco, Chevron: No peak demand in sight.
McKinsey Co.: 2035. EVs will represent 50% of the car market in developed countries and 30% in emerging economies. http://www.mckinsey.com/industries/oil-and-gas/our-insights/is-peak-oil-demand-in-sight
"...the biggest “X” factor is how widespread electric-vehicle (EV) adoption will be. Transport fuel accounts for about 50% of the demand for crude oil, with cars accounting for half of that..." (WSJ - ibid). As described in the WSJ article, the IEA's conservative estimate for 2040 hinges on the importance of trucking as a consumer of oil and the importance of mass market 200-mile range cars as a minimum requirement for widespread adoption.
But we already have several cars with over 200 miles of range before recharging. That 200 miles between recharging is almost universally considered the tipping point at which mass market sales of EVs will take off, along with a price of around $33,000 - the average selling price of new cars in the US.
|Tesla Model 3 released July 2017|
210 to 310 miles per charge
$35,000 before $7,500 US tax rebate
|Chevrolet Bolt released December 2016|
238 miles per charge
$35,000 before $7,500 US tax rebate
TrucksTrucks account for about 40% of transport oil demand with all the other forms (shipping, air, military) making up about 10%. The IEA spokesman said that without trucking going electric he could not see a peak demand coming any sooner than 2040. Except they are already here:
|Daimler Urban-e Truck|
|Cummins e-Truck AEOS|
|DHL (Deutsche Post in the EU) designed its own 100% electric trucks|
Tesla is slated to reveal detail next month on it's semi tuck reported to have a 200-300 mile range. It is designed for regional carriers which is 30% of trucking these days - train depot to warehouse, warehouse to retail store, etc. (click chart below to enlarge).
In Norway 42% of new car sales were electric in 2016. China is demanding all auto companies produce 8% electric cars, and will raise the requirement as time goes on. On bad air days in China, ONLY EVs are allowed in cities. China's auto market is the largest in the world at about 24 Million/year vs 17 Million/year in the US. Below is a 100% electric medium delivery truck. Thousands have been sold in China and it is being brought to the US in partnership with Ryder Truck Leasing. The CEO of Ryder is a former Tesla executive.
http://www.greencarreports.com/news/1112436_chanje-electric-delivery-truck-from-china-to-go-on-sale-this-yearThere are 7 million trucks this size on the roads of the US. About 500,000 are sold each year.
(Related: The Netherlands govt. officially bans the sale of internal combustion engines fro 2025 and requires all vehicles to have zero emissions by 2030 - http://www.greencarreports.com/news/1113295_all-cars-with-engines-to-be-off-dutch-roads-by-2030-following-2025-sales-ban)
In terms of transportation, we are very close to a golden age of electric vehicles of all sizes and uses. Long term, we can stop using GHG emissions as a reason for biking, high density housing, and everything else under the sun. Biking, and high density housing must be considered on their own merits. Transport of goods and people is on the edge of a great sea change which will change the conversation about these issues dramatically. There will still be important areas to work on, but by 2030 it will be very clear that transport GHG emissions won't be one of them.