Elec­tric car sales slow de­mand on gaso­line.

Re­port: Elec­tric ve­hi­cles will make up 36% of sales by 2040

San Antonio Express-News (Sunday) - - Front Page - By Marissa Luck STAFF WRITER

Amer­i­cans’ ap­petite for gaso­line is slow­ing and could fall fur­ther as elec­tric car sales con­tinue to bite into gaso­line de­mand.

Elec­tric ve­hi­cles sales are ex­pected to make up 36 per­cent of new car sales by 2040, or in the most ex­treme sce­nar­ios, 100 per­cent of new car sales in the U.S., Europe and China, ac­cord­ing to new analy­ses by the en­ergy re­search firm from Wood Macken- zie.

Wood Mac pro­jected that that this rate of adop­tion of elec­tric ve­hi­cles would dis­place 5.5 mil­lion bar­rels a day of oil, although in an ex­treme sce­nario that could be as high as 11 mil­lion bar­rels a day. If the cur­rent pace of re­duc­ing emis­sions of car­bon diox­ide, a ma­jor cause of global warm­ing pro­duced by fos­sil fu­els such as oil, nat­u­ral gas and coal, the global de­mand for oil would peak in 2036. If the pace ac­cel­er­ates, global oil de­mand could peak as soon as 2031.

That, of course, has big im­pli­ca­tions for the econ­omy of Hous­ton, where most of the world’s big­gest en­ergy com­pa­nies have head­quar­ters or sig­nif­i­cant op­er­a­tions.

“The global en­ergy tran­si­tion will con­tinue to progress, led in large part to tech­nolo­gies and (car­bon diox­ide re­duc­tion) trends we’re al­ready see­ing in the mar­ket­place — the rise of re­new­ables, growth in elec­tric ve­hi­cles, elec­tri­fi­ca­tion of end-use de­mand, in­creas­ing ef­fi­ciency,” said David Brown, se­nior an­a­lyst at Wood Mackenzie, in a state­ment.

The auto in­dus­try’s bullish out­look on elec­tric ve­hi­cles was high­lighted this week when GM an­nounced it will stop mak­ing its hy­brid, the Chevy Volt, in fa­vor of fo­cus­ing on elec­tric and au­tono-

mous ve­hi­cles. Fos­sil fu­els, how­ever, are not go­ing to van­ish. Even in an ex­treme sce­nario, fos­sil fu­els will still make up 77 per­cent of global en­ergy de­mand through 2035, ac­cord­ing to Wood Mackenzie

While Amer­i­cans are still con­sum­ing lots of gaso­line, de­mand is flat­ten­ing as ve­hi­cles be­come more fuel ef­fi­cient. The could mean lower profit mar­gins — even losses — on mo­tor gaso­line for re­finer­ies along the Gulf and East coasts, the U.S. En­ergy Depart­ment said in a note Wed­nes­day.

Higher gaso­line prices for most of this year has hurt gaso­line de­mand, the En­ergy Depart­ment said. In the short-term en­ergy out­look re­leased ear­lier this month, the En­ergy De- part­ment es­ti­mated that U.S. gaso­line con­sump­tion fell 1.3 per­cent in Oc­to­ber com­pared to the same time last year, the sixth month this year with year-overyear de­clines.

For the first three weeks of Novem­ber, es­ti­mated monthly gaso­line con­sump­tion av­er­aged about 9.2 mil­lion bar­rels per a day, a de­crease of 262,000 bar­rels per a day since last Novem­ber.

“Gaso­line pro­duc­tion has out­paced de­mand,”the En­ergy Depart­ment said, “and in­ven­to­ries have in­creased beyond their nor­mal sea­sonal lev­els, low­er­ing gaso­line prices and, as a re­sult, gaso­line mar­gins.”

Gaso­line re­fin­ing mar­gins are an indicator of prof­itabil­ity. Mar­gins have reached some of their low­est Oc­to­ber and Novem­ber lev­els seen in the past five years, ac­cord­ing to the En­ergy Depart­ment. Gulf Coast re­finer­ies saw mo­tor gaso­line mar­gins fall from 27 cents per gal­lon in the first half of the year to 1 cent a gal­lon in Oc­to­ber.

But re­finer­ies are see­ing de­mand and mar­gins grow for ul­tra-low diesel. The EIA ex­pects diesel fuel mar­gins to re­main high next year.

“Gaso­line pro­duc­tion has out­paced de­mand and in­ven­to­ries have in­creased beyond their nor­mal sea­sonal lev­els.”

En­ergy Depart­ment re­port

Un­der one sce­nario, elec­tric ve­hi­cles will ac­count for 100 per­cent of new car sales in the U.S. Europe and China by 2040.Ng Han Guan / As­so­ci­ated Press

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