The death throes of oil in 25 years?

13 September 2017
The Car Revolution
By Gwynne Dyer
France and the United Kingdom recently announced that they will ban the sales of gasoline and diesel-engined cars from 2040. The lower house of the Dutch parliament has passed a law banning such sales from 2025. India says it will institute a similar ban by 2030.
China, the world’s largest producer of cars – 28 million vehicles last year, more than the United States, Japan and Germany combined – is also planning to declare a ban soon, but is still working on the cut-off date. And in November the European Commission is going to debate a minimum annual quota of electric vehicles (EVs) for all European car producers.
So if you were looking for a safe place for a long-term investment, would you choose the oil industry?
Just over half of the 98 million barrels of oil produced in the world each day goes directly to making gasoline, used almost exclusively in motor vehicles. Another 15 percent goes to make “distillate fuel oil”, of which at least half is diesel fuel. So around 58 percent of total world oil production is being used in vehicles now. There may be almost none in 35 years’ time.
That is certainly the intention of many governments. Britain, for example, is planning to allow only zero-emission vehicles on the road (apart form a few specially-licensed vintage cars) by 2050, only ten years after the ban on selling new cars with internal combustion engines comes into effect.
So the production of gasoline- or diesel-engined cars will already have collapsed by the late 2030s. In practice, if these deadlines are observed, the cars on sale will be almost entirely EVs by the mid-2030s. And what’s left of the oil industry will have a very different shape.
Countries that export most of their oil, like Russia and Saudi Arabia, will find their incomes crashing for two reasons: sheer lack of demand, and very low prices ($40 per barrel or less) due to the huge glut of productive capacity. There may also be follow-on political consequences.
Countries with some oil production of their own, like the United States and China, may simply stop importing oil entirely. (The United States will remain in the last ditch federally so long as Donald Trump is president – he’s even trying to revive the coal industry – but eight states have already signed an agreement to have 3.5 million zero-emissions vehicles on the road by 2025.)
All this is good news for the environment, and also for the health of people who live in large cities. (No wonder China is the leading EV producer in the world, with 40 percent of global production. Pollution is already making most of its cities almost uninhabitable.) But the revolution doesn’t end here: most, and eventually all of these EVs will be self-driving vehicles.
Driverless vehicles will end up being ownerless vehicles. They will become public utilities, summoned when they are required for the specific trip you have in mind at the moment. Urban car clubs and peer-to-peer rentals are one precurser of this phenomenon, Uber and Lyft in their different ways are another.
Privately owned cars are parked an average of 95 percent of the time. This figure varies little from one city or country to another, and illustrates why private car ownership will become a dispensable luxury. The difficulty in the past was gaining immediate access to a car for as long as you needed it at a reasonable cost, but the combination of the smart phone and the self-driving vehicle will solve that problem.
That, rather than a cheaper taxi service, is the real goal of Uber’s business model, but once reliable self-driving cars are widely available Uber will find itself deluged with competition. Private ownership will decline steeply, and the total number of cars on the road worldwide will eventually crash to perhaps one-quarter of the current number. After all, there are hardly ever more than a quarter of privately-owned cars on the road at the same time.
Buses and conventional taxis will virtually disappear, taking millions of driving jobs with them. (There are a million taxi, Uber and bus drivers in the United States alone.) Long-distance truckers and van drivers (another 3.5 million in the US) will also find work increasingly scarce: Daimler, Volvo, Uber and Baidu are already road-testing the first self-driving 18-wheelers.
Oh, and one more thing. About a quarter of the average central city in North America (less in Europe and Asia) is devoted to surface parking lots and multi-storey garages. They are part of the 95-percent-parked problem. The car doesn’t just take you downtown; it has to stay there the whole time you do, so it must find somewhere to park.
Once people realise that most of this land is now available for redevelopment, it will get a lot easier and cheaper to live downtown: less commuting, more community. Roll on the car revolution!

Dwynne Dyer is an independent journalist whose articles are published in 45 countries.

I just bought shares in coal, they are going to need lots of power…

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This article has a similar vein, I don’t disagree with the premise of either article, just the timeline.

How are states and country’s going to replace the income lost by the lack of fuel tax?
USA lowest in the world of course but the EU??

Our gasoline tax rates may be lower per volume but it is common for the average US household to own a
couple of gas guzzling SUVs which they continuously use. A great number of Europeans use public
transportation and those who own cars don’t drive as many miles and get 4 times the gas mileage we do. They are much closer to being able to operate without gasoline than we are.
Our power grid infrastructure will have to be redesigned and coal alone won’t be enough to supply the
needed amount of electrical power. We will have to rely on nuclear power.
Maybe eventually someone will come up with a tiny nuke motor to power our future autonomous cars directly.


fake news from the oil industry
check these figures

The EIA report shows an increase in coal usage. The EIA projects coal usage to increase short term even as coal’s share overall is decreasing. Long term the EIA projects a absolute decrease in usage and in share.

Or, alternatively, they are “parked 95 percent of the time.” I’m confused.

I’ll buy that big changes are coming – I would bet on the technological changes (gas to electeic) before the cultural ones (driverless, car clubs, etc.).

I don’t think relatively tiny, compact and urban Europe, with its generally efficient public transportation systems, is a good predictor of what may happen in North America. It’s easy to forget (or not realize), if you are ensconced in NYC, Boston or Chicago that it is almost 900 miles from one side of Texas to the other, that suburbanization is still a thing in the south and west, and intercity (much less intracity) public transportation is an afterthought or nonexistent across much of the US. In many places, folks actually use their vehicles for things like moving livestock, building supplies, carrying on service businesses, etc. That is not going away. I suspect the same may be true across China, and certainly India.

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Hydrogen Fuel Cells may be the answer for long distance travel, not battery powered cars.
Here is a couple of articles from the last few days/weeks:

Compact cities with a well developed public transport system may be the first to ban cars in the downtown area altogether, or at least ban internal combustion engines cars from entering.

Singapore is a place where it may be possible to do so first. With it’s efficient and growing MRT system, well developed bus network and ample taxi service, there is already little need for private cars to get around.

Personally, while living in Singapore, I haven’t owned a car since 1994 and never missed it. (Except for the first few months that is)
If I needed to I’d rent a car for the duration of an assignment, or for trips in Malaysia etc.

I think USA gasoline consumption has been flat for years, every new anything on the road uses less gas than the year before.

The US and life in the US and the use of vehicles is much different from life and vehicle use in most other places. Canada is quite similar. The US is a very big country with a large population and a very good road system. Cars are a cheap and convenient way for most American to get to work, shop, and travel. Americans like to drive around for entertainment and take road trips. America has a very mobile society where people often commute long distances, and move for new opportunities in different states. America is built for cars. That is not going to change. At least not in the next 50 years.


sure but what will they be powered by?

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Most cars will continue to be powered by gasoline or gas/hybrid for next 20 years at least, with an increasing share of electric cars.

The US has stupidly discouraged the more efficient diesel cars that are so common everywhere elsewhere in the world. The US has also failed to support conversion to natural gas. We have plenty of cheap natural gas, enough to run our cars for another 100 years at least.

The accelerating pace of technology will undoubtedly bring many wonders in the future, but cars will mostly be powered by internal combustion engines for years to come.

In terms of the history of human race, oil is a one off stock. Despite the ever better drilling techniques finding ever more difficult reserves… there is still only so much in the ground. It will run out. And with countries like China growing into economic maturity, their developing middle class desire for all the nice things in life (like MacDonald’s??), will add to demand and shorten the time until we queeze the last drop out the wells. It may not be one generation in the future, but it will certainly come within a thousand years. Possibly within the next hundred.

Whilst that will herald changes in how we power our transport systems, the real change will be its loss as a raw material. Think plastic, all of which comes from oil, gas and coal in some form. As said above, nearly half the worlds oil production goes into fuel. The other half is used as a base raw material.

Now try to imagine a world without any plastic. It is everywhere in modern life. Even your undies have some plastic input. Modern life would not be possible without the stuff.

Aganst this, any move to conserve the worlds oil reserves can only be a good thing. There will be an oil industry for a long time.

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At a certain point it will become economical to recycle plastics, because it isn’t now without government subsidies. Then it will become economical enough to encourage inventors to discover new ways to recycle types of plastic we can’t currently recycle and even old material from landfills.

I think some of the manufacturers are taking a second look at that thinking as some countries have stepped in to force decisions, especially ones without oil.
The world always changes but nobody ever gets the rate of change correct

I agree that fuel cell electric powered cars are the answer to the battery tech. Of course the largest source of industrial hydrogen is the petroleum industry. . . .

I just reread Dyer’s column, I see what you mean. I think 95 percent is wrong if you discount sleep time. He’s a raging globalist so I wouldn’t take his numbers as gospel.