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Crude’s future uncertain as use of electric cars rises

With the numbers of electric cars growing, a new era is dawning.

Following a five per cent decline in sales from 2014 to 2015, electric vehicle (EV) sales in the US jumped by 37pc in 2016. Globally, growth has been even stronger. Since 2014 global EV sales have more than doubled. Following the 72pc growth in 2015, 2016 saw a 41pc global increase with EV sales touching the 777,497 mark.

And Norway, the small Scandinavian country, with a total population of 5.2 million is leading the march. While only 321 electric cars registered in Norway in 2007, there are now more than 100,000 electric cars on its road. EV sales are already edging towards a 50pc tipping point. Norway now plans to phase out fossil fuel cars altogether by 2025, reports Lars Bevanger.

Electric vehicles currently make up less than one per cent of the global mix. But the transition seems imminent.

Steve Koonin, the former under-secretary at the US Department of Energy while addressing an energy conference in Calgary predicted 50pc of the vehicles on the road in 2050 would be electric.

Larry Burns, a former General Motors executive was of the view that fuel efficiency regulations in the US could hamper the demand for petroleum in North America by between 30 to 45pc by 2025.

Burns pointed out, that car manufacturers across the board are working to boost efficiency by reducing the weight of their cars, building electric cars or hybrids and also by engineering more driverless cars.

“Just over 1pc of the gas being burned (in your car) is moving you, the rest is being used to move the machine,” Burns emphasised.

A debate is on. The number of electric vehicles on the roads has risen six-fold since 2014 with 550,000 new plug-in cars sold last year, admits the IEA. Yet, the OECD energy watchdog also underlines that electric automobiles made up less than one percent of all new cars sold last year. Electric cars won’t cause oil demand to peak anytime soon, says the IEA Executive Director Fatih Birol.

“The oil demand growth is not coming from cars, it’s from trucks, aviation, and the petrochemical industry and we don’t have major alternatives to oil products there,” Birol said, adding: “I don’t buy the argument that electric cars alone will cause a peak in oil demand at least in short and medium term.”

The IEA hence does not see oil demand peaking at least until, 2040, with the number of EV cars rising from 1.3 million in 2015 to a cumulative total of 150 million by 2040.

BP’s base case foresees even a lower number 100m electric cars by 2040 some 5pc of the global car fleet. Yet, it is up from the 57m projected in the company’s outlook last year, mainly because of falling battery prices. ExxonMobil Corp, on the other hand, projects that 10pc of cars on the road in 2040 will be electric.

Other analysts believe the transition could be quicker. Bloomberg New Energy Finance’s see more than 200m electric cars globally by 2035. Royal Dutch Shell Plc is of the opinion that in view of the renewable energy and disruptive technologies and the consequent falling cost of electric vehicles and solar technology will halt demand growth for oil and coal from 2020.

A report issued by The Grantham Institute at Imperial College London and Carbon Tracker notes: “Fossil fuels may lose 10pc of market share to PV (photovoltaics) and EVs within a single decade.”

The report said that electric vehicles could make up a third of the world’s road transport market by 2035 and that solar PV could supply 23pc of global power generation by 2040. Growth in the number of electric vehicles could lead to 2 million bpd of oil demand being displaced by 2025, the report estimates.

A new technology could be of great help in this emerging revolution. Researchers at the University of Texas at Austin have unveiled a new, lithium or sodium-glass battery technology that could be a game-changer. “I think we have (now) the possibility of doing what we’ve been trying to do for the last 20 years,” says John Goodenough, the 94 years old eminent scientist, the co-inventor of the battery, adding, this could result in “an electric car that will be competitive in cost and convenience with the internal combustion engine.”

The energy world is faced with a revolution — tomorrow or the day after.

Courtesy : Dawn News

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