Favoring diesel over gasoline lead to diesel cars in Europe increasing their market share from 10 percent of the car fleet in the mids to 55 percent at their peak in This trend has changed after the Volkswagen scandal, as it became evident that diesel cars are more polluting.
The pro-diesel policy was abandoned in favor of EVs and hybrid cars. However, despite the emerging policy support for EVs, less polluting and less efficient gasoline cars stand to gain in market share in Europe at the expense of diesel over the medium term, which in turn has an impact on the European car fleet efficiency.
The majority of the projected car ownership increase will take place in the developing world where car ownership per capita remains substantially below that of the OECD countries. Analyzing oil demand by focusing solely on 20 percent of the market is bound to yield misleading results. Oil demand is driven by a myriad of structural factors most of which are tied to industrialization, global commerce, improving living standards and marine, air and truck transport. These forces are not subject to speculation on EV penetration.
Who Killed the Electric Car Midterm Essay Example
Statoil, by far the most conservative forecaster of future oil demand and the oil major most bullish on EV penetration 17 percent of the global car fleet by still expects oil demand to reach million by Specifically referring to non-transport oil demand, Statoil states:. Demand growth for petrochemical products is expected to remain high and the potential for energy efficiency is relatively limited. Therefore, demand for petrochemical feedstock rises steadily, from 15 mbd in to about mbd by , dependent on the scenario.
Such recommendation if followed, will have a far more material impact on oil demand in the coming years than any new EV model companies such as Tesla may bring to the market.
With the majority of the world population still residing in non-OECD countries, and the remaining massive gap in per capita oil consumption in the OECD Non-OECD 2. As a matter of fact, despite a 2. This can be traced to the 0. Oil investors, executives and forecasters have been gun shy in their oil demand projections, the constant barrage of negative oil headlines and the politically sensitive nature of being disposed favorably toward oil after years of green indoctrination has skewed the debate.
A friend of mine who attended the International Petroleum Week event in London reported a sense of gloom and lack of confidence about future oil demand by the people who are supposed to insure sufficient investments to insure adequate oil supply. Yet, despite the rampant skepticism reality says otherwise, demand growth over the last two years has been the best since the mids barring the oil demand rebound from the financial crisis.
In the United States, the Trump administration is adopting a pro-fossil fuel policy, while considering an ambitious infrastructure and tax plan that could accelerate U. Meanwhile, Europe is experiencing a growth renaissance spurred by an easy monetary policy and low euro. China is tugging along despite yearly predictions of impeding economic collapse, and India continue to plow ahead under a determined Modi leadership. Furthermore, the recent price rebound in a number of commodities should have a favourable impact on the economy of commodity exporters such as Brazil and South Africa.
Besides a more bullish global GDP outlook, the oil industry itself is a large consumer of oil due to the energy intensive nature of developing unconventional oil resources. This is where shale oil could play a constructive role in keeping the market well supplied and prices reasonable in the face of solid demand growth. Many view shale oil as an unwelcome guest on the global oil scene.
According to the IEA data, in the last two years, OECD oil demand switched from an average annual decline of , barrels to , barrels growth. The dynamics governing U. Healthy OECD oil demand combined with structural oil demand growth of 1. To borrow a line from the IEA, such buoyant growth would have seemed unfathomable a few years ago.
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Discussion Headlines. Shale Output Nears 9 Million Bpd. Oil Sanctions. Third wave of shale coming. Home Energy Energy-General. Nawar Alsaadi Nawar Alsaadi is a principal at Semper Augustus Capital, a private investment firm with a special focus on the energy sector. He is also a… More Info.
Premium Content. The IEA doubled down and expanded on its weak demand thesis in its Medium-Term Oil Outlook report issued in February The global economy, reshaped by the information technology revolution, has generally become less fuel intensive.
Death spiral for cars. By 2030, you probably won’t own one
After the dust settled and the IEA did its tally of oil demand, we notice that no actual collapse in oil demand has taken place, if anything, oil demand growth has accelerated materially since the crisis: As can be seen from the table above, global oil and NGLs demand has been growing at a steady average annual rate of 1.
What Electric Cars? Conclusion Oil investors, executives and forecasters have been gun shy in their oil demand projections, the constant barrage of negative oil headlines and the politically sensitive nature of being disposed favorably toward oil after years of green indoctrination has skewed the debate. By Nawar Alsaadi for Oilprice. Thank you for writing such an informative article. I have been questioning the popularity of EV vehicles for a long time.
Not because I am anti-enviromental, but because the sales numbers do not lie. EV's do not even make the top 20 list for sales numbers. Even hydrids are not on the top 20 list. This tells me that most consumers do not want EV or hydrid vehicles. There is nothing wrong with purchasing a EV or hydrid vehicle, but the MSM tends to make one think that they are more popular. As I said the sales numbers do not lie.
Author conveniently left many important factors related to EV. A lot of pablum here and already well known data.
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Does little to explain how badly you missed oil inventory, technological improvements, debt financed US shale fiasco and the brittle balance sheet of some of your picks. In the end , they had to sell non core properties to survive. That call and brittle balance sheets was very costly. As I recall, you also had an over reliance on flowing barrel which, at the time: I pointed out was an error.
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I expect oil demand to remain solid. Companies I own like CVX have maintained their divvy and the share price performance is reasonable. I picked your PWE under a buck, waiting until panic and desperation set in. Next cycle I suggest you listen more and pontificate less. I believe you will be soon surprised as most people miss geometric growth. This argument is wildly naive. Batteries are enabling renewable energy to make inroads into all oil markets, save non-energy uses.
Moreover, the impact of renewables, batteries and vehicle electrification will grow more quickly in non-OECD countries than in developed ones. I would encourage the author to explore electric buses in China. Nevertheless, the overarching thesis is that individual auto ownership is ending, along with the dominance of the gas-powered engine.
Here's a reality check on all that. True, ride-hailing services such as Uber and Lyft have in a short period created a new storyline connected to Silicon Valley.
Can Electric Cars Replace Gas Guzzlers?
The sharing economy, through services such as Airbnb, suggest that people are aware that idle vehicles are an greatly underutilized asset. But it's far from clear that this story embodies a wholesale shift in consumer behavior.
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People continue to own stuff. And people continue to not use everything they own in the most economically advantageous manner.
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Even more telling is the non-growth of the EV market, at the same time the internal-combustion market has boomed. Almost 34 million vehicles have been sold over the past two years in the US alone — and nearly all them run on gas. Electric cars, meanwhile, have failed to launch.
Tesla sales are a drop in the bucket, and it's the most successful electric carmaker around.