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Page added on February 26, 2016

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Will better, cheaper EVs really crash the oil market?

Will better, cheaper EVs really crash the oil market? thumbnail

As the many, many analysts around the media world prove every day, you simply can’t go wrong when you predict the future. Sure, you can be wrong, but it seems like no matter how factually incorrect you might be about the future, you will always find a place at the media table. Of course, I don’t know what will happen in the next decade, either, so look who’s talking. With all that in mind, I wanted to share a prediction that found purchase in Bloomberg this week: namely, that electric cars will cause the next oil crisis.

“The 2020s will be the decade of the electric car.” – Tom Randall

On the one hand, this article sounds at times wistfully and wonderfully optimistic. The gist is that, thanks to rapid and unexplored (by the oil market, anyway) advances in battery technology, plug-in vehicles first become comparable in cost and then cheaper than today’s gas cars. That’s when things get real. The author, Tom Randall, says that, “the 2020s will be the decade of the electric car” and that, “thirty-five percent of new cars worldwide will have a plug,” by 2040. As you may remember, OPEC strongly disagrees.

On the other hand, Randall does offer up some crunched numbers to back up his optimism. Given that electric vehicle sales grew, globally, by about 60 percent last year, Randall and his team, “calculated the effect of continued 60 percent growth. We found that electric vehicles could displace oil demand of 2 million barrels a day as early as 2023. That would create a glut of oil equivalent to what triggered the 2014 oil crisis.” Even if you don’t buy that 60 percent is a reasonable growth rate for EVs to keep up for a long time, Randall says that a more conservative approach to figuring out how much EVs will cost and thus entice new buyers shows that we will hit that two-million barrel level in 2028. For all the numbers, you should just go read the whole article. It even comes with moving GIFs.

While I want to believe Randall’s message – what’s the point of disruptive technology if you don’t actually disrupt things? – I’ve seen enough talk of Peak Oil and the coming EV revolution over the past decade that I’ve been covering green cars to know better than to just accept any predictions that come my way. Despite low prices for a barrel of oil today, the oil industry seems to be pretty confident that EVs don’t pose a real threat. That could be wishful thinking on their part as well, but that seems like a good a place as any to step aside and leave the rest up for your comments and discussion.

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34 Comments on "Will better, cheaper EVs really crash the oil market?"

  1. Ralph on Fri, 26th Feb 2016 10:04 am 

    Doing my bit to crash the oil market.

    Put a deposit down on a Nissan Leaf.

  2. cottager on Fri, 26th Feb 2016 11:15 am 

    My guess – in 2040 94000 of cars around the world will burn oil. The rest 6000 will be plug-in.

  3. eugene on Fri, 26th Feb 2016 11:58 am 

    No one is talking about the reality of electric cars. For example, I live in northern Minnesota where much of the economy is tourism out of Minneapolis/St Paul area. Couple of hundred mile drive which means charging, at least, once on the way up plus the car plugged in for 24 hours, or more, while here (GM Bolt. No one is talking about the infrastructure to support any of this, the time spent waiting for the charge, etc. No one is talking about the economic losses as fossil fuel cars, motorcycles, boat, four wheelers, etc, etc become worth way less of not worthless. How many power plants must be built to supply this electricity? How much electrical infrastructure has to be built?

    All I hear is the breathless anticipation of eternal happiness and endless driving. No one is talking about lifestyle changes, loss of jobs and that list is long.

    Einstein talked of thought experiments which is exactly what I think is going on. Endless solutions in the fantasy land of the mind.

  4. baha on Fri, 26th Feb 2016 12:36 pm 

    Right now I could build a car that would seat 4 and run solely on PV panels on the roof. Drive all day long without recharging. But it will only go 15 mph:) Yes, we need lifestyle changes. How about slowing down and enjoying the ride.

  5. marmico on Fri, 26th Feb 2016 1:10 pm 

    For example, I live in northern Minnesota where much of the economy is tourism out of Minneapolis/St Paul area.

    Who gives a shit about anecdotes? Your “tribe” represents 0.01% of the U.S. economy.

    Your state neighbour to the west, North “Bakken” Dakota represents 0.26% of U.S. national income (Table 1, author’s calculation).

    You peak oilers don’t have a clue that health care and housing, not energy (oil), is the U.S. economy headwind.

  6. baha on Fri, 26th Feb 2016 1:16 pm 

    No one is talking about the reality of electric cars. They will be so much more simple and reliable than ICE powered cars. For people like me who get attached to their car it will be a lifelong companion that you can leave to your kids. The only reason this didn’t happen in the early 20th century was batteries. The hype is about batteries. One good breakthru and the ICE engine is kaput.

  7. dave thompson on Fri, 26th Feb 2016 1:43 pm 

    Electric cars cannot exist with out FF inputs all along the way. What are EV’s made of? How are roads built and maintained? There is 8 galons of FF in each tire. Where on the planet do we have a factory building all the parts and stuff that goes into an EV that runs solely on renewables? EV’s will be expensive, short trip toys, for the rich, for the foreseeable future.

  8. marmico on Fri, 26th Feb 2016 1:54 pm 

    Isn’t Brainard the most beautiful Governor in the 103 year history of the Federal Reserve Board?

    Oh, it take fossil fuels to build an EV or an ICE vehicle. North America is a fossil fuel fortress.

  9. Apneaman on Fri, 26th Feb 2016 1:56 pm 

    More like a tomb marmi.

  10. Apneaman on Fri, 26th Feb 2016 2:16 pm 

    a tomb marmi.

    California gas leak was the worst man-made greenhouse-gas disaster in U.S. history, study says

    https://www.washingtonpost.com/news/energy-environment/wp/2016/02/25/california-gas-leak-was-the-worst-man-made-greenhouse-gas-disaster-in-u-s-history-study-says/?postshare=361456429559715&tid=ss_tw

  11. marmico on Fri, 26th Feb 2016 2:22 pm 

    Mattel well just have to reshore production of the new “Barbie Doll” tomb lineup to Mexico for re-export to the U.S. so there is another Brainard in 2040.

    Meanwhile, North America can tell the Persian Gulf to geopolitically fuck off. 🙂

  12. marmico on Fri, 26th Feb 2016 2:42 pm 

    apeman, what don’t you get about general equilibrium?

    If that finance guy loses money on his flooded beach front property in Naples, Florida, due to “Porter Ranch” sea level rise then some farmer gains money on his now beach front property in Ocala, Florida.

    Is the farmer smarter than the financier? Place your wager. North America is a fossil fuel fortress.

  13. Apneaman on Fri, 26th Feb 2016 3:00 pm 

    marmi you’re an econ 101 religious retard. Worst of all? You and those like you are boring. The most boring fucking one track mind cancer monkeys who ever lived.

  14. Apneaman on Fri, 26th Feb 2016 3:14 pm 

    marmi’s brain is an impenetrable fortress. Facts and reality crash upon its walls.

  15. Apneaman on Fri, 26th Feb 2016 3:18 pm 

    marmi, what about the trillions of dollars sunk into the existing ports and their transport hubs? Farmer going to build new ones out of corn cobs?

  16. Apneaman on Fri, 26th Feb 2016 3:20 pm 

    It’s time investors faced oil’s free fall after Saudis stomp on notion of any production cut

    http://business.financialpost.com/investing/global-investor/its-time-investors-faced-oils-free-fall-after-saudis-stomp-on-notion-of-any-production-cut

  17. marmico on Fri, 26th Feb 2016 3:22 pm 

    So you have wet dreams about the Ocala farmer building tidewater structures and raising the 2095 Brainard in Ocala. The 2040 Brainard is already being raised in Naples. You would jerk off to Mother Goose Tverberg you doom porn aggregator.

    North America is a fossil fuel fortress.

  18. Apneaman on Fri, 26th Feb 2016 3:58 pm 

    marmi, I have wet dreams about ass raping you after collapse. You’ll be trapped in the prison fortress and will have nowhere to run. Kiss kiss, see ya soon.

  19. John Orr on Fri, 26th Feb 2016 5:16 pm 

    How the hell are u going to charge electric cars if ur street has no driveway….it will be cable dancing down the footpath plus 100 other problems….

  20. Practicalmaina on Fri, 26th Feb 2016 5:53 pm 

    Tripping over power cords is no reason to hold up progress. Most people who don’t have driveways would be in the city, and are therefore less likely to own a vehicle they are going to drive a great deal. Or the people who do live in an urban area and own a vehicle often have to pay for a spot, they can pay an extra few for an ev spot.

    Apneaman just because there won’t be many deep water ports and harbors after extensive sea level rise, we can just go without the plastic Chinese shit. It is no reason to start ass raping each other.

  21. makati1 on Fri, 26th Feb 2016 6:56 pm 

    “Will better, cheaper EVs really crash the oil market?”

    Techie porn.

  22. Outcast_Searcher on Fri, 26th Feb 2016 7:26 pm 

    Even if the electric car becomes as cheap (and reliable) as the biggest optimists predict, what will such cars run on in the next decade? By far, mostly fossil fuels.

    The fact that the optimistic articles don’t even mention this says it all.

  23. John Orr on Fri, 26th Feb 2016 7:29 pm 

    Practicalmaina…u are talking rubbish and haven’t a practical cell in ur head

  24. makati1 on Fri, 26th Feb 2016 8:20 pm 

    John, Practical is delusional…

  25. Practicalmaina on Fri, 26th Feb 2016 11:31 pm 

    How is that talking rubbish, you don’t have a driveway, chances are your in a central area.

    Makati delusional is knowing about climate change and moving to an overcrowded island nation on the equator.

  26. In the middle on Sat, 27th Feb 2016 12:01 am 

    Mak. When I was in school I typed on a manual typewriter. You would have considered computers Techie porn. I talked on a wired phone with a cord long enough to stretch from the kitchen to my bedroom. You would’ve considered cell phones techie porn. My grandfather rode a horse to school. Cars were your techie porn then. When I was in first grade, microwaves were techie porn. Today it is the electric car. When my parents were in high school, there were no tennis shoes. Dad once said if he could see into the future he’d be rich and for those who do, THANK YOU!

  27. twocats on Sat, 27th Feb 2016 1:22 am 

    practical,

    but to be practical about it, in order for the culture to swing in that direction it needs to be practical for the every-person. and there’s a shit ton of people who live in apartments, or who own a condo, and yes, who live in central areas, but a lot of those people drive, and spend hours and hours in rush hour traffic.

    The city you describe, where no one needs or owns cars, what city are you referring to? I guess New York might qualify and the cabs could switch to electric. Portland is pretty good. LA? Hah! Seattle? Double hah! SF/Bay Area? Quadruple hah! I lived in bay area for 10 years, knew hundreds of people, I can count on one hand the number of people that were car-free for an extended period.

    If you’re wealthy enough to live in SF you are wealthy enough to own a car and wealthy enough to take weekend trips to Tahoe 15 times a year. But most people still car commute, and the main highway, highway 80, was parking-lot-ed with cars almost 24 hours a day. there were only a few hours in the wee hours of the morning that it wasn’t a traffic jam.

    and the people who live in texas drive 100 miles for Subway, its just a thing, so electric won’t work because they can’t go off roading on a whim on their way back from Subway.

    so you’ve got a really really narrow market, comparatively, to the market that first popularized the prius.

  28. Davy on Sat, 27th Feb 2016 7:09 am 

    We have been habituated to tech improvements for a century or more. Our minds are molded to the idea of positive change. Now that we are in a time of negative destructive change we still look to tech to solve our problems. Tech is expensive and requires stability. Tech must have complex global support. You know the story of just-in-time, global finance, global distribution, economies of scale, and a global resource base all brought together by a stable global system. Take any of those away and tell me how long tech is going to grow and improve.

    Don’t you think we are approaching a time where limits and diminishing returns are going to limit any new tech? Surely! Tech needs healthy investment and to be affordable it needs economies of scale and that means consumerism. If we have an economy that is decaying from deflation and debt how is tech going to keep growing. Money does not grow on trees. Where are all the consumers going to appear from to buy these products so these companies make a profit? Wealth must be generated and maintained. The Tech industry is the most exposed industry to economic descent. Just look to the oil industry to see what happens to a high tech industry that sees economic difficulty.

  29. Practicalmaina on Sat, 27th Feb 2016 7:45 am 

    Two cats if you have a car in a city you often pay for a spot in a garage, these already have ev spaces.

    Davy these billion dollar corps are not always what creates better tech, go on pinterest or build it solar and you will see some innovative diy, the tech we have needed has in large part already been in place, we safely put a man on the moon decades ago, LED were recognized about a centur8ago, only now are we benefiting significantly. DC motors that run a heat pump so efficienctry are not a new idea but only recently been tasked for this job, when company’s saw a market.

  30. Kenz300 on Sat, 27th Feb 2016 10:08 am 

    The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles

    http://www.huffingtonpost.com/entry/koch-electric-vehicles_us_56c4d63ce4b0b40245c8cbf6
    Inside the Koch Brothers’ Toxic Empire | Rolling Stone
    http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924?page=2

  31. Kenz300 on Sat, 27th Feb 2016 10:09 am 

    Climate Change is real….. we will all be impacted by it……

    Exxon’s Climate Change Cover-Up Is ‘Unparalleled Evil,’ Says Activist

    http://www.huffingtonpost.com/entry/exxon-evil-bill-mckibben_561e7362e4b028dd7ea5f45f?utm_hp_ref=green&ir=Green&section=green

  32. twocats on Sat, 27th Feb 2016 10:49 am 

    um you got a source there practical?

    http://cleantechnica.com/2015/01/02/solar-powered-ev-charging-stations-san-francisco/

    notice the words “soon to be”

    or how about this one?

    http://www.nytimes.com/2015/10/11/science/in-california-electric-cars-outpace-plugs-and-sparks-fly.html?_r=0

    Practical, I’ve never seen you make so many flippantly flimsy comments on a topic before. I’m not saying these problems aren’t resolvable, but as usual, its hard to solve problems if you don’t realize you have one.

  33. Kenz300 on Mon, 29th Feb 2016 9:01 am 

    Electric cars, bikes and mass transit are the future…..

    fossil fuel ICE cars are the past…………..

    Think teen agers vs your grand father………………….

    cell phones vs land lines…….

  34. Miles on Thu, 1st Sep 2016 4:59 am 

    I found this source of new and used cars Canadian Black Book.

    This might help. I checked their site and i can see they offer top quality choices.

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