https://www.spe.org/en/print-article/?art=3943
[Despite the dateline, I don't think this is meant as an April Fool's
joke posting.]
BP: Robust Adoption of Electric Vehicles Would Not Stop Oil Consumption
Growth
Joel Parshall, JPT Features Editor | 01 April 2018
Even a robust adoption of electric vehicles (EVs) over the next 2
decades would not eliminate the growth of either global oil consumption
or carbon emissions, BP Chief Economist Spencer Dale said on 20 February
as the company introduced its 2018 Energy Outlook. And to meet the goals
of the Paris Climate Accord, Dale said, the outlook concludes that a
system of global carbon emission pricing and increased regulation to
spur energy efficiency and fuel switching would probably be needed in
addition to EV adoption.
Projecting the future impact of EVs on oil consumption and emissions
involves more than counting the number of them and their percentage
share in the global vehicle fleet, he said.
First, pure battery electric vehicles (BEVs) must be distinguished from
plug-in hybrid electric vehicles (PHEVs), as the latter allow the power
source to alternate between battery electricity and oil-based fuel.
Thus, the impact of PHEVs cannot be viewed as equivalent to that of
BEVs. Second, the intensity with which the EVs might be driven,
particularly as shared mobility expands, is a critical variable.
EV Share of Kilometers Driven
“If there are say 300 million EVs on the road but they are driven twice
as much as conventional cars, that’s more akin to having 600 million EVs
on the road,” Dale said. Recognizing this, the outlook focuses on the
share of vehicle kilometers (Vkms) driven by EVs.
Illustrating the point about intensive use, Dale noted that the outlook
projects that EVs will comprise approximately 15% of the global
passenger car fleet in 2040—about 300 million vehicles out of a total of
almost 2 billion—based on a scenario called “evolving transition (ET).”
Under ET, policies, technologies, and societal preferences evolve in a
manner that mirrors the recent past.
However, Dale emphasized that under this scenario, “the share of
passenger car Vkms powered by electricity is over 30%, twice as much.”
The greater market penetration, measured in Vkms “reflects the
interaction of EVs with shared mobility and autonomy,” he said.
Shared Mobility
Shared mobility is defined by vehicle ownership, i.e., when the vehicle
is not privately owned by the driver, and as a category includes taxi
and rental car fleets as well as ride-hailing services such as Uber and
Lyft.
Fully autonomous cars will likely be available in the early 2020s but
probably will be initially very expensive. Their high expense means they
will generally be purchased by shared-mobility-service companies and not
private individuals.
“The costs saving associated with no longer having to pay for a driver,
which could reduce total costs by as much as 40% or 50%, leads to a
surge in the importance of kilometers driven by shared-mobility
autonomous cars in the 2030s,” Dale said.
Autonomous Cars ‘Game Changer’
The vast majority of these more intensely driven, shared autonomous cars
will probably be EVs because of their low running costs, which will
substantially boost the Vkm market share powered by electricity, Dale
said. In all, the increased market penetration of EVs, measured in Vkms,
will be attributable roughly 50% to their number and 50% to “the
increasing intensity with which they are driven,” he said, “and the game
changer for intensity is autonomy.”
An important factor in the projections of a long-term slowdown in the
growth of global liquid-hydrocarbon motor fuel consumption and carbon
emissions in BP’s outlook—even as vehicle miles driven increase—is the
continuing adoption of stricter fuel-efficiency standards around the world.
Vehicle manufacturers looking to meet tighter emission standards have
three options, Dale noted.
Reduce vehicle weights.
Improve fuel efficiency.
Sell more EVs.
Fuel Consumption Impact
The impact on fuel consumption of selling more EVs is not as
straightforward as the other two options. If manufacturers were to
tackle emission reductions mainly by selling EVs, Dale said that it
would require large up-front expenses that would leave less money to
invest in other vehicles. A slowdown or halt in fuel-efficiency
improvements in those vehicles could largely offset reductions in fuel
consumption related to increased EV sales. The net impact on consumption
would depend on the intensity of use of the EVs added to the fleet, he said.
In an effort to curb the growth of carbon emissions, some countries have
begun to consider more aggressive regulation that would eventually ban
the sales of new internal-combustion-engine (ICE) passenger cars.
To gain a full understanding of how such an ICE ban would affect liquid
fuel demand, the BP Outlook considered the potential impact of a
worldwide ICE ban—which would include PHEVs—that hypothetically would be
phased in between 2030 and 2040.
Under the scenario, the share of BEVs in new passenger car sales would
be one-third in 2030, two-thirds in 2035, and 100% in 2040. In 2040,
two-thirds of global car Vkms would come from electrical power with the
remainder coming from ICE power in legacy vehicles.
Internal Combustion Engine Ban
The global ICE ban would cut liquid fuel demand by about half, or 10
million B/D, compared with the outlook’s ET scenario. However, the level
of demand would still be higher than it is today. “The suggestion that
the rapid growth in electric cars will cause oil demand to collapse just
isn’t supported by the basic arithmetic,” Dale said.
Even more notable is the relatively small impact the ICE ban would have
on carbon emissions. Under the ET scenario, carbon emissions would still
be almost 10% higher than today, while the ICE ban would slow that
increase to about 7%, according to the outlook. And this assumes that
all electricity needed to power EVs is generated from renewable sources.
Neither result is close to the almost 50% carbon-emission reduction
needed to achieve the Paris climate goals.
“Although electric cars may bring important benefits in terms of urban
air quality,” Dale said, “reducing oil demand by 10 million barrels a
day—although welcome—doesn’t really move the dial in terms of carbon
challenge.”
Needed: A Break From the Past
“The clear message from the energy outlook,” he continued, “is that to
achieve a sharp reduction in carbon emissions, we need a far more
decisive break from the past than recent momentum in policy and
technology implies.”
The outlook does not prescribe specific policies but examines different
outcomes that depend in part on the broad mix of policies adopted.
Looking at the possibility of an even faster transition (EFT) than that
in the ET scenario, Dale said that reforms would have to address fuel
use and efficiency in the electric power sector.
Under the EFT trajectory, the Paris Climate-Accord goals could be met by
requiring some form of global carbon emission pricing and increased
regulations “incentivizing more rapid gains in energy efficiency and
fuel switching in industry, transport, and buildings,” Dale said.
In a transition consistent with the Paris goals, he noted, oil and gas
would still provide 40% of world energy in 2040.
BP: Robust Adoption of Electric Vehicles Would Not Stop Oil Consumption
Growth
Joel Parshall, JPT Features Editor
01 April 2018
Volume: 70 | Issue: 4