ELECTRIC CARS ARE NO THREAT TO OIL

via Friends of Science Calgary
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Robert Lyman will be one of our special guest speakers at the May 9th, 2017 “Climate Dogma Exposed” event at the Red and White Club, McMahon Stadium, Calgary. Information and Tickets at http://ift.tt/1Rexnvq or EventBrite.

At a recent conference in Calgary, Steve Kronin, a former under secretary in the U.S. Department of Energy and a New York University professor, predicted that electric vehicles will make up 50 percent of the vehicles on the road by 2050 and that this will pose a threat to the oil industry because of its dampening effect on fuel demand.

Kronin’s remarks echo those of many advocates for electric vehicles who enjoy speculating about the future. Their objective, perhaps, is to reinforce the thesis that there will be an easy and inevitable transition to a “decarbonized” world economy.

Let us, instead, examine the facts and draw our conclusions from them.

There is no question that there has been a relatively rapid growth in the sales of electric vehicles (EV), including both electric hybrids (PHEVs) and all-electric cars (BEVs), since 2010. Annual global sales of plug-in models rose from 134,000 in 2012 to 774,000 in 2016. By the end of 2016, cumulative global sales of plug-in passenger cars and light utility vehicles passed the two million mark.

These sales were stimulated in large part by continuing large government subsidies in North America, Europe and China. The geographic distribution of sales offers some insight into why sales have increased so fast. China, which has poured billions of dollars into consumer subsidies, had 645,000 cumulative sales of plug-ins by the end of 2016. In the United States, where federal subsidies of up to $7,500 per vehicle are available in addition to various state-level subsidies, the cumulative sales total was 570,000 vehicles. Japan accounted for 147,500 and Europe 637,000. Norway alone has the highest plug-in electric car segment. There, extremely rich subsidies have driven plug-ins to 29% of new car sales.

That, for EVs, is the good news. However, a little perspective is in order.

For all the growth from small beginnings, plug-in electric vehicles still represent less than 0.15 percent of the global light duty vehicle stock. In the United States alone, annual EV sales are far less than 1% of the total. Last year, there were 17 million new cars sold in the United States that run on oil fuels. There were 157,000 EV sales.

It is far from clear that governments will continue indefinitely the large subsidies that have underpinned EV sales. In the United States, it has always been a feature of the existing program that the subsidies to an EV producer would end when its sales reached the 200,000 vehicle level. The Trump Administration is now in the process of eliminating or reducing many of the subsidy and regulatory programs implemented by the former Obama Administration to reduce greenhouse gas emissions; one wonders how long the U.S. subsidy program can last. China has announced that it will eliminate EV subsidies by 2020. European taxpayers have begun to tire of endless subsidies to various “green” causes; even there, governments are starting to take a closer look at whether such subsidies are justified when most of them go to consumers who could afford to buy the vehicles without subsidies.

Nonetheless, many countries remain committed publicly to a vision of rapidly growing EV sales. The International Energy Agency (IEA) has developed a policy and planning process called Energy Technology Perspectives that seeks to chart technology paths towards the reduction of global GHG emissions from 33 gigatonnes (Gt) in 2013 to about 15 Gt in 2050. The IEA vision for transportation sees EVs constituting 150 million (10%) of the total light duty vehicle stock by 2030 and nearly 1 billion (40%) of the total light duty vehicle stock by 2050. The 2015 Paris Declaration on Electro-Mobility and Climate Change, announced at the time of the COP21 conference, set more modest targets of 400 million electric two-wheelers and 100 million EVs by 2030.

With these targets in mind, on which growth path are EVs? Continuation of the relatively fast rate of growth in sales plus some acceleration could yield a vehicle stock of 7.4 to 13 million EVs by 2020. In contrast, an annual growth in sales by 230,000 units per year, as has happened over the last three years, would produce a stock of less than 3 million units by 2020 and less than 7 million units by 2030. Either outcome would be still be tiny in comparison to a global vehicle population of 1.3 billion.

Further, the most optimistic projections of EV sales have very limited implications for global oil demand growth. Over the period since 2008, in spite of the most serious recession since the Great Depression, world oil demand has increased from 86 million barrels per day to 97 million barrels per day, or around 1 million barrels per day per year. If that trend continues, then even the most optimistic scenarios for growth in EV sales would only make a slight dent in oil demand growth. Oil would continue, as it is now, the most important energy source on the planet.

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via Friends of Science Calgary http://ift.tt/2on3Vep

April 9, 2017 at 02:19PM