BP sees electric vehicles crimping oil demand by 2040
LONDON: The emergence of self-driving electric cars and travel sharing are set to dent oil consumption by 2040, oil and gas giant BP said, forecasting a peak in demand for the first time.
In its benchmark annual Energy Outlook, BP forecast a 100-fold growth in electric vehicles (EVs) by 2040, with its chief economist Spencer Dale painting a world in which we travel much more but instead of using private cars, we increasingly share trips in autonomous vehicles.
While travel demand more than doubles over the period as economies in countries such as China and India grow, higher oil demand will be more than offset by increased engine efficiency standards as well as the larger number of EVs and shared travelling.
Share of electric vehicles
Unlike many other forecasts, including previous BP Energy Outlooks, which looked solely at the growing share of EVs in the car fleet, BP this year focused on the share of vehicles kilometres powered by electricity. Under BP’s Evolving Transition scenario, which assumes that policies and technology continue to evolve at a speed similar to that seen in the recent past, some 30 per cent of car kilometres are powered by electricity by 2040 from almost zero in 2016.
At the same time, the number of EVs is set to increase from 3 million today to over 320 million by 2040, representing roughly 15 per cent out of a total car fleet of 2 billion.
The gap between the increasing number of EVs on the road and the kilometres powered by electricity is due to the expected growth in so-called shared mobility by EVs, Dale said.
“Cars will be used much more intensely over time,” Dale told reporters in a briefing on Monday ahead of the release of the report on Tuesday.
As a result, fuel demand from the car fleet is forecast to dip to 18.6 million barrels per day (bpd) in 2040 from 18.7 million bpd in 2016, when it represented around one fifth of total oil demand, according to BP.
Cheaper rides
BP expects autonomous vehicles to become available in the early 2020s. Their initial high cost means the vast majority of the cars will be bought by fleets offering shared mobility services.
The average electric car is expected to be driven about two and a half times more than an internal combustion car, according to Dale.
“What we expect to see in the 2030s is a huge growth in shared mobility autonomous cars ... Once you don’t have to pay for a driver, the cost of taking one of those share mobility fleets services will fall by about 40 or 50 per cent,” Dale said. The vast majority of the shared mobility is expected to be EVs because of their lower maintenance costs.
Car makers including General Motors and high-tech giants such as Google Waymo and Uber Tech- nologies have poured billions into the autonomous vehicles industry hoping gain a first-mover advantage. Robo-taxi services are seen as the main use for most selfdriving vehicles.
BP sharply raised its estimate of growth in electric vehicles in the coming decades from last year’s forecast that EVs would reach 100 million by 2035. The big upwards revision is due to an increase in hybrid cars and an expected sharp growth in EV purchases in the second half of the 2030s, Dale said.
London-based BP joined other oil companies such as Royal Dutch Shell in forecasting a peak for oil demand in the late 2030s, when it is expected to slightly decline at around 110 million bpd.
It did not foresee a peak in demand in its previous outlooks that stretched into 2035.
While the transportation sector will continue to dominate the growth in oil consumption, demand for plastic manufacturing will become the main source of growth in the 2030s. - Full story @ timesofoman.com/business