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An ‘end to the oil era’ in sight?

… and what it means

The rise of the electric vehicle will doubtless see a significant drop in demand for oil.

With countries imposing strict targets on car makers, as they try to achieve stiff emissions benchmarks, some researchers are predicting that demand for oil could nosedive, with oil demand growth falling by as much as 70% by 2030.

A recent Reuters report indicated that an aggressive China-led shift to electric vehicles (EVs) is expected to slash global oil demand growth by 70% by 2030 and would help bring an end to the “oil era”. This was based on research by the Carbon Tracker think tank which was published in the past week.

Carbon spewed

Some of the world’s biggest markets for vehicles are starting to see the economic benefits, as well as the huge reductions in carbon emissions that are now spewed out by petrol and diesel vehicles.

“Within 10 years, China could save more than $80bn (more than a trillion dollars) in annual oil import costs as new-energy vehicles (NEVs) become increasingly competitive,” Carbon Tracker said (as reported by TimesLIVE).

Apparently this was based on a “conservative” scenario by the International Energy Agency, which projected that electric vehicles would account for 40% of China’s total car sales by 2030.

Is an ‘end to the oil era’ in sight, or will barriers to conversion to NEVs linger for decades?

The cost of importing the oil required to fuel an average car is 10 times higher than the cost of solar equipment required to power an electric vehicle, Carbon Tracker said.

“Most governments have strong incentives to electrify their transport systems. Emerging markets – India, China, South East Asia and most of Africa – spend huge sums on oil imports every year, and two thirds (68%) is used for transport. Oil imports cost 1.5% of China’s GDP and 2.6% of India’s GDP.”

These countries are certainly not alone … US carmakers, with Tesla showing the way, are under pressure to reach strict targets, while many European countries are already forging ahead with ambitious plans to hike production of NEVs, either hybrid or fully electric, with the former to be phased out by 2040 in some cases. South Korea has been championing hydrogen-fuelled cars, while India and Japan are other Asian countries setting the bar high with ambitious targets. The size of the Indian and Chinese markets have to be taken into account as they will be driving huge volumes of sales in the coming decades.

Like wind power, solar power and other cleaner energy sources, electric vehicles are a major part of the energy future.

Which all leaves many unanswered questions. One assumes that as demand for oil tails off and then plummets, so will the price of oil, but will this be the case? How many countries will hang on to petrol and diesel cars and for how long? And what about here in SA, where we are so behind the game?

Less sophisticated

In many less sophisticated auto markets, a lack of charging machines has been a barrier to electric vehicle sales and, so far, it seems that is the case in SA. South Africans are emotionally attached to their petrol and diesel cars, particularly in the bakkie, SUV, segment, where it would be difficult to see many being willing to change.

Is change inevitable, or will countries like SA cling on to diesel and petrol?

Yet change seems inevitable, and perhaps with incentives like more charging facilities in public spaces; incentives for trade-ins of traditional models; and subsidies for manufacturers, SA could (one day) embrace the EV route?

It’s still a long road ahead methinks.

Your thoughts?

Comments

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  1. I think that everyone is so caught up with the idea, and wanting to bully their legislators into making electrification compulsory, that very few consider the nuts and bolts of it:
    1) Electric cars, despite their simplicity, are hugely expensive considering that they are powered by nothing more than a simple electric motor controlled by a simple rheostat.
    2) The cost lies in the batteries and the rare materials required to manufacture them. The carbon footprints involved in mining, manufacturing and finally disposing of them are much greater than those of carbon-based fuels. Nobody ever mentions that.
    3) South Africa cannot even produce sufficient electricity to power its own homes and businesses. Where is it going to find more? Let us also remember that windmills kill birds and solar panels fry the poor things. Where is the outcry from nature lovers? Nor do we have sufficient and suitable rivers to produce viable quantities of hydro-electric power. The only cost-effective solution for SA, right now, is nuclear and nobody wants that; they are all guaranteed to explode and kill people, you know.
    4) Finally, has anyone asked those who rely on cars, planes and trucks to keep the country working, or are we being snowed by a few strident lobbyists – lobbyists who are quick to demand that “something be done'” but can never offer workable alternatives?

    • Thank you Gordon. Some very important points raised and which need to be chewed over, if the powers that be are listening.

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