Petrol cars going nowhere

Sometimes the future takes longer to arrive than you’d think. every year BP takes a long look at global energy – where it comes from, where it is used, the different types of supply and so on.

You might imagine that with the switch to electric cars, the growth of renewables, and the technological advances such as LeD light bulbs that fossil fuels in general, and oil in particular, might be on the way out.

they are not. BP’s statistical Review of World energy, now overseen by spencer Dale, former chief economist at the Bank of england, makes the point that even if the world’s car fleet has switched over to electricity by 2040, total oil demand would still be higher than it is today.

there are three main reasons for this. First, while renewable sources of energy are growing with astonishing speed and costs are plunging, the base from which they are rising is still very small. thus solar power is less than half of 1pc of the global primary energy supply.

second, the switch of the world’s vehicle fleet to electricity does not reduce primary energy demand. You still have to produce the electricity to power the fleet. more efficient cars and trucks, and fewer of them, would reduce energy demand, but given the growth of the emerging world, that is not going to happen for at least another generation, maybe longer.

And third, we know from history that it takes a long time for one technology to replace another. the steam turbine still produces almost all electricity generation. the internal combustion engine powers still almost all the vehicle fleet. the jet engine drives all large aircraft.

there is a message here. the first part is that we will be a fossil fuel economy for a long time to come. the second part is that precisely because we will be a fossil fuel economy we need to conserve energy in every way we can.

Cash gets its cards?

CAsh or card when you bought your lunch today? if it was cash you are part of a declining band because the UK may have reached ‘peak cash’ this year.

Credit cards have been around in the Us since the 1950s and the UK since the 1960s, but it is only in the past five years that the killer combination of the debit card and touchless transactions has seen plastic replace cash for small transactions.

the amount of cash in the economy is still climbing though more slowly than before, but the proportion of cash transactions is plunging. Cards have long been preferred for large payments but now they are taking over for small ones as well. Does this matter? Well, yes. the country that has gone furthest towards a cashless society is sweden.

Lots of shops and restaurants now no longer accept cash – you have to pay with a card or a phone. Legal tender is no longer legal, in the sense that businesses are not obliged to accept cash or notes.

this may be great for tax revenues in that transactions are recorded, but it creates social exclusion. the elderly, people working in the informal sector, and some of the poor are effectively excluded from a chunk of economic life. A commission looking at the social problems of the cashless society reports in the summer.

We are not there yet. But the shift to cards is already causing headaches for small retailers. they may not have the hassle and cost of handing cash but many feel they are charged too high a commission on card transactions and have little choice but to stump up.

if you are tesco or m&s you can negotiate fine margins with your bankers. if you run a corner store you can’t.

there is a parallel here with cheques. they have disappeared entirely in the Netherlands and are rarely used elsewhere on much of the Continent.

A decade ago banks in the UK tried to get rid of them, and had they got their way they would be phased out by the end of this year.

But a rearguard action by small businesses and charities – who realised many donors would not pay any other way – saved the cheque.

maybe we need a similar solidarity campaign for cash.

ALEX BRUMMER IS AWAY