When will oil demand start declining due to EVs?

[Refman + 207]

11 hours ago, Outlaw Jackie said:

EV's will be powered by coal... Where else will the electrons come from? Solar... Windmills? Anyone who questions that is kidding themself. 

In 2005 coal still accounted for 50% of US power production, it is now down to about 30% and still falling.

 

[Guillaume Albasini + 851]

1 hour ago, Refman said:

In 2005 coal still accounted for 50% of US power production, it is now down to about 30% and still falling.

 

Most US coal plants are old and will be replaced in the coming years by gas and renewables.

This year 12 gigawatts of coal-fired capacity will be unpluged in the US.

http://ieefa.org/u-s-coal-fleets-economic-maelstrom/

[HK Rach + 10]

anyone have a picture of what the oil and gas consumption looks like for manufacturing EVs and batteries?

[fozzir + 68]

My guess is 2022 rather than 2023, it really depends how well the Model 3 goes.

[Outlaw Jackie + 78]

11 hours ago, Refman said:

In 2005 coal still accounted for 50% of US power production, it is now down to about 30% and still falling.

 

EVs are a very small % of US market.  India and China, where the larger increase in market share will occur, still produce most of their electricity with coal.  Let's look at the number in 2025. 

[Jan van Eck + 7,558]

What you folks are missing in all this is that the market is fixated on this idea of batteries.  Yet, batteries are lousy devices for storing power.  They are bulky, they are heavy, they cost a ton to build, and the shelf life is mediocre:  figure 500 deep-discharge cycles for lead-acid, and perhaps 2,000 cycles for Li-ion.  Indeed, Chevrolet deliberately prevents the user of the Volt model for discharging below 20% in order to lengthen battery life and avoid warranty claims. 

To get decent range, you need a hefty battery pack.  That pack costs beaucoup bucks, and it will have a limited shelf life.  It also takes quite a while to recharge,measured in hours if not half-days. Why go that route?

Instead of a battery, I see the entire market going to flywheels.  Remember your physics: a flywheel absorbs energy linear to the mass, but exponential to the rotational speed.  So you don't need a big heavy maranged steel flywheel; take a lightweight carbon-fiber wheel, put it in a vacuum with magnetic bearings, and spin the thing up to 100,000 rpm and you have vast gobs of power inside that machine.  You let the power in and out with magnetic coils same as with an electric motor. 

When you power up on the road, you pull into the filling station and the attendant plus in two fat welding cables. These can handle hundred of amperes of current, and you spin up in perhaps 60-90 seconds.  Now you are good to go for the next 500 miles.  Weight of the flywheel installation: figure 450 lbs. And the flywheel has an indefinite life, no maintenance needed!

The flywheel spinning in a vacuum should hold the charge for 4 months before spin-down, so you can leave the car at the airport and have the juice to drive home.  I foresee flywheels sitting in your basement, silently spinning to power you when the grid goes down; flywheels inside office towers to run the entire plant;  flywheels inside diesel or electric buses to both stretch the drive and give that big oomph to get rolling from a standing start.  You already have this in special flywheel-incorporated transmissions in some trucks, to allow for the fitting of a much smaller engine.  Who needs a battery?  Nobody.

Edited June 9, 2018 by Jan van Eck
typing error

[JunoTen + 118]

On 08/06/2018 at 2:09 AM, Rodent said:

I can't see that at all. Not to mention that would be twice the distance a car travels in any given day (there and back for 1, there and back for 2, there and back for 1, there and back for 2--versus there and back for 1 and there and back for 2). And it's not practical, unless hubby and wife have jobs that are one hour offset from each other*. What would be the odds?  And what about Jimmy's soccer practice and Suzie's ballet lessons? 

*Average commute time to work is 24.7 minutes nationally. 

I'm not talking about an individually owned autonomous EV but about an autonomous car provided by a company, as a service, that would be cheaper than actually owning the car. That's what GM is doing.

So what would happen is hubby and wife each have a subscription to that service, and they request a car using a phone app in the morning. So they can go on their separate ways.

Edited June 9, 2018 by JunoTen

[Refman + 207]

18 hours ago, JunoTen said:

I'm not talking about an individually owned autonomous EV but about an autonomous car provided by a company, as a service, that would be cheaper than actually owning the car. That's what GM is doing.

So what would happen is hubby and wife each have a subscription to that service, and they request a car using a phone app in the morning. So they can go on their separate ways.

I still don't see the vast majority of US households doing this. I can MAYBE see one family member doing this, but I'd wager that most US households would keep one personal vehicle because it's just too damn convenient.

Where I do see this being a hit is with elderly people that are essentially housebound and rather than keeping a vehicle for occasional use, or maybe they're really not capable of driving, then this service could be useful. That being said, this is all dependent on these companies actually solving autonomous driving, and from what I've seen so far I don't think it will be fully reliable until 2025 or maybe even 2030

[JHM + 30]

BNEF estimates that EV (inclusive of both light and heavy duty vehicles) offset some 380 kb/d of fuel demand. The EV fleet is growing over 50% per year. At nominal 50%/y growth, displacement rises rapidly to 1.9 mb/d in 2021, 2.9 mb/d in 2022, and 4.3 mb/d in 2023. The incremental displacement from year to year is what will halt growth in fuel demand. So the incremental 1.0 mb/d fuel displacement in 2022 comes close to halting growth if the economy happens to be doing badly or EVs rise faster than expected. But incremental 1.4 mb/d in 2023 is likely enough to halt oil demand growth in normal economic conditions. But by 2024 the displacement could rise 2.2 mb/d to reach 6.5 mb/d cumulative. This is surely enough displacement to drive oil consumption down.

So just tracking EV fuel displacement, 2023 looks like peak oil, but a year early or later is also possible. The key for energy analysts is to watch how quickly demand displacement accumulates due to both the size and composition of the EV fleet.

[Guillaume Albasini + 851]

Many recent forecasts on EV growth are based on the assumption battery cost will fall under the $100/kWh line around 2025.

But Elon Musk thinks it could happen sooner. At the recent Tesla shareholders meeting this was his answer to a shareholder asking if Tesla had broken the $100 /kWh h seal :

“We think at the cell level probably we can do better than $100/kWh maybe later this year … depending upon [stable] commodity prices…. [W]ith further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level. Which is really the key figure of merit for a car. But long-term meaning definitely less than 2 years.”

Musk is known to better assess the direction of technology innovation than the timing, but if his forecast happens to be true, EV growth could be faster than expected and future projections would be pushed upwards..

 

 

 

[JHM + 30]

On 6/4/2018 at 6:09 PM, James said:

The IMO 2020 fuel oil standard for ships will more than offset any decline in oil demand by EVs, not to mention the huge wave of new commercial aircraft coming in the next few years, which ALL run on kerosene-type jet fuel! 

 

My personal crystal ball says oil demand plateaus around 2038-2043 then slowly declines. 

The ISO standard will do nothing to increase demand for crude. All it will do is dislocate demand from residual oil to other alternatives. Mostly diesel will pick up the slack, but this will only serve to make diesel more expensive for all consumers of the fuel. Refineries will need to spend billions upgrading equipment. Also lighter grades of crude could become more costly. All of this added cost will be passed on to consumers, especially in diesel prices, but also jet and gasoline could be impacted.

So what happens when diesel and other fuels become more expensive? Demand growth slows. Also keep in mind that EV makers are racing to develop heavy duty commercial vehicles. Even long range semis will be on the market by that time. Fleet operators will be seeking for relief from unusually high diesel prices. A single electric semi can displace from 1 to 4 barrels per day of diesel as it is used 250 to 1000 miles per day. Even at $3/gallon, this can translate into fuel savings from $100 to $400 per day, or $400,000 over a 1 million mile warrantied life of the battery. If diesel climbs to $5/gallon, the life fuel savings is a about $800,000. 

So 2020 could be a perfect storm of ISO triggering high diesel prices, compelling heavy duty EVs coming on market, and the supply of crude could still be rather tight. In that environment, demand for diesel and hence crude could drop like a rock. 

[Boat + 1,324]

The huge price of future climate calamity along with unstable geopolitics are headwinds for oil demand and production. Not to mention massive debt accumulated over the last 15 years by most large countries.

My crystal ball says 2030 brings peak oil and the beginning of bigger problems.

[JHM + 30]

On 6/5/2018 at 1:28 PM, JunoTen said:

GM will launch its autonomous electric service in 2019 and scale it up in the two following years with hundreds of thousands of vehicles. Waymo bought 20 000 all electric Jaguars and 80 000 hybrid Chrysler vans for its autonomous service, which is supposed to launch in late 2018 and will scale up in the two years after.

If the services are successful (their goal is to be cheaper than owning a car) then oil demand should peak in 2020 or 2021 as forecasted by Tony Seba.

The key thing about Seba's idea or that autonomy matters is that this transforms a private passenger EV into a commercial EV. The essential difference between private and commercial is the intensity of use. In private use, a car might be driven 12k miles allowing the EV to displace 400 gallons of gasoline per year. But in a commercial fleet that same EV could be driven 48k miles in a year and offset 1200 gallons per year. 

This makes a substantial difference in the number of light EVs needed to displace say 1 mb/d of gasoline demand from 38.3M from 9.6M. So commercial use of EVs enable fuel demand to be disrupted more quickly. 

But this applies to all commercial EV especially heavy duty. So an electric municiple bus, of which China is making about 125k per year, displace about 0.7 b/d of diesel. So the incrememental Chinese eBus fleet is whacking off some 88kb/d of diesel demand per year. Electric semis will push displacement rates of 1 to 4 b/d per truck. 

Already heavy EVs are displacing 4 or 5 times as much diesel as light EVs are displacing gasoline. If your mental picture of an EV is a small car, you need to change that. Commercial EVs are what will cause diesel to peak as early as 2021. Gasoline peaks maybe in 2026. Between the these two peaks crude itself will peak. 

[JHM + 30]

5 hours ago, Guillaume Albasini said:

Many recent forecasts on EV growth are based on the assumption battery cost will fall under the $100/kWh line around 2025.

But Elon Musk thinks it could happen sooner. At the recent Tesla shareholders meeting this was his answer to a shareholder asking if Tesla had broken the $100 /kWh h seal :

“We think at the cell level probably we can do better than $100/kWh maybe later this year … depending upon [stable] commodity prices…. [W]ith further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level. Which is really the key figure of merit for a car. But long-term meaning definitely less than 2 years.”

Musk is known to better assess the direction of technology innovation than the timing, but if his forecast happens to be true, EV growth could be faster than expected and future projections would be pushed upwards..

 

 

 

I am encouraged by all this too, but I would like to urge one point of caution around the $100/kWh threshold. It should not overshadow the fact that growth in EV sales has been and continues to be very fast. On a global basis we are looking at a fairly sustainable 55% annual growth rate even with battery costs clearly above $100/kWh. 

So does the $100 milestone really change anything? Will the growth rate jump well above 55% in the that magical year? Or is it simply that a declining pack cost just sustains a 50% growth rate all the way out to the milestone? 

Of course meeting the $100 milestone does go along way in affirming the inevitability of EVs. Few people will want to pay a substantial premium for a gas powered vehicle that also is more costly to fuel and maintain, but achieving such a threshold is not a barrier to realizing 50% annual growth in EV sales. 

So in my view it really does not matter much when the $100 threshold is breached, be that 2025 of 2020. What matters is that the 50% growth rate is sustained until EVs dominate the new vehicle markets. 

But as it stands, according to BNEF tracking, EV pack costs have fallen an average of 20% per year from $1000/kWh in 2010. At that rate, we hit $107/kWh in 2020. BNEF is simply hedging their bets by forecasting $100 by 2025. In reality, it could come as early as 2020. For Tesla it should come by 2019. As competition among advanced battery makers heat up, we could see a few other competitors arrive by 2020. How long it takes the laggardd is not really relevant, because the leaders will dominate the market quickly.

[Guillaume Albasini + 851]

7 hours ago, JHM said:

I am encouraged by all this too, but I would like to urge one point of caution around the $100/kWh threshold. It should not overshadow the fact that growth in EV sales has been and continues to be very fast. On a global basis we are looking at a fairly sustainable 55% annual growth rate even with battery costs clearly above $100/kWh. 

So does the $100 milestone really change anything? Will the growth rate jump well above 55% in the that magical year? Or is it simply that a declining pack cost just sustains a 50% growth rate all the way out to the milestone? 

Of course meeting the $100 milestone does go along way in affirming the inevitability of EVs. Few people will want to pay a substantial premium for a gas powered vehicle that also is more costly to fuel and maintain, but achieving such a threshold is not a barrier to realizing 50% annual growth in EV sales. 

So in my view it really does not matter much when the $100 threshold is breached, be that 2025 of 2020. What matters is that the 50% growth rate is sustained until EVs dominate the new vehicle markets. 

But as it stands, according to BNEF tracking, EV pack costs have fallen an average of 20% per year from $1000/kWh in 2010. At that rate, we hit $107/kWh in 2020. BNEF is simply hedging their bets by forecasting $100 by 2025. In reality, it could come as early as 2020. For Tesla it should come by 2019. As competition among advanced battery makers heat up, we could see a few other competitors arrive by 2020. How long it takes the laggardd is not really relevant, because the leaders will dominate the market quickly.

 

I think demand for EV's will be higher than supply in the coming years. The rate of EV growth will mainly depend on the supply side with three possible bottlenecks :  the mining industry (supply of lithium and cobalt), the battery producers and the car makers.

The Tesla Model 3 output offers a good example of such a bottleneck with half a million preorders  but supply struggling to meet demand (current output is estimated by Bloomberg to be less than 3000 cars a week https://www.bloomberg.com/graphics/2018-tesla-tracker/ ) . Even if Tesla is a new entrant lacking experience in mass production, I suspect the ramping up of EV models will also come with some hurdles for more usual car manufacturers.

To produce more EV's a surge in battery production will also be needed. Many new battery factories are under construction or planed but will they be completed on time to meet the higher demand.

And will they get enough lithium and cobalt ? The mining industry plans to expand existing mines and open new mines but it's a lengthy process. Opening a new mine can take 5 to 10 years until the mine enter production. This new projects are based on current forecasts of demand growth but will the output be enough to meet demand if the EV growth is higher than forecasted ?  Battery and car manufacturers are increasingly trying to secure an output and those who succeed will grab big market shares in case of shortages.

 

 

[JHM + 30]

Right, supply constraints are another reason why the $100 threshold is not so relevant. If you have demand grow faster than supply, costs within the supply chain will rise to whatever is needed to attract capital and resolve bottlenecks. So strong EV demand growth prior to the $100 threshold is actually more important to development of the EV supply chain than what happens after batteries drop well below $100. 

At some point investors may realize that investing in batteries is a whole lot more interesting and rewarding than investing in barrels. As that happens the supply oil will fall even as the supply of batteries continues to grow. 

[Kushal Banerjee + 1]

Fossil fuel will continue to co exist alongwith EVs.

EVs are there for the last 40 years. Did it slow down growth of IC engines ??

 

[HermitMunster + 146]

China is the biggest EV market and then I think it's Europe. I don't believe it will have much of an effect on oil consumption because there are too many other markets that demand oil and the world revolves around oil--it's what moves markets.

[Irawansyah + 1]

Ok I received confirmation on community oilprice . Thanks 

[GCMS Guy + 5]

On 6/4/2018 at 8:37 PM, PeterfromCalgary said:

Peter,

"Lets compare the difference in price for a Chevy Cruise and a Chevy Bolt."

Aren't you overlooking the cost of replacing the batteries in the EV?  This can't be cheap, and they wont last forever.  Going further out, there are government subsidies on EV.  I don't see these as sustainable: North America seems on the way to becoming a crude oil exporter.  Formerly we imported oil.

 

 

[GCMS Guy + 5]

On 6/9/2018 at 3:33 PM, JunoTen said:

I'm not talking about an individually owned autonomous EV but about an autonomous car provided by a company, as a service, that would be cheaper than actually owning the car. That's what GM is doing.

So what would happen is hubby and wife each have a subscription to that service, and they request a car using a phone app in the morning. So they can go on their separate ways.

JunoTen,

If hubby and wife go to work around 8:00 AM, and come home around 4:00 PM, their use of the car as a service may not reduce the total car population all that much, because many other people will also go between town and suburb at the same time.

Edited June 14, 2018 by GCMS Guy

[CMOP + 227]

21 hours ago, GCMS Guy said:

JunoTen,

If hubby and wife go to work around 8:00 AM, and come home around 4:00 PM, their use of the car as a service may not reduce the total car population all that much, because many other people will also go between town and suburb at the same time.

I agree with Lyft's Ceo. By 2025 owning a car won't be necessary. On average it costs roughly around $9,000 / car. Insurance, gas, repairs, etc. 

"As a country, we've long celebrated cars as symbols of freedom and identity. But for many people  —  especially millennials  —  this doesn't ring true."- Lyft Ceo

[HermitMunster + 146]

On 6/9/2018 at 11:59 AM, Jan van Eck said:

What you folks are missing in all this is that the market is fixated on this idea of batteries.  Yet, batteries are lousy devices for storing power.  They are bulky, they are heavy, they cost a ton to build, and the shelf life is mediocre:  figure 500 deep-discharge cycles for lead-acid, and perhaps 2,000 cycles for Li-ion.  Indeed, Chevrolet deliberately prevents the user of the Volt model for discharging below 20% in order to lengthen battery life and avoid warranty claims. 

To get decent range, you need a hefty battery pack.  That pack costs beaucoup bucks, and it will have a limited shelf life.  It also takes quite a while to recharge,measured in hours if not half-days. Why go that route?

Instead of a battery, I see the entire market going to flywheels.  Remember your physics: a flywheel absorbs energy linear to the mass, but exponential to the rotational speed.  So you don't need a big heavy maranged steel flywheel; take a lightweight carbon-fiber wheel, put it in a vacuum with magnetic bearings, and spin the thing up to 100,000 rpm and you have vast gobs of power inside that machine.  You let the power in and out with magnetic coils same as with an electric motor. 

When you power up on the road, you pull into the filling station and the attendant plus in two fat welding cables. These can handle hundred of amperes of current, and you spin up in perhaps 60-90 seconds.  Now you are good to go for the next 500 miles.  Weight of the flywheel installation: figure 450 lbs. And the flywheel has an indefinite life, no maintenance needed!

The flywheel spinning in a vacuum should hold the charge for 4 months before spin-down, so you can leave the car at the airport and have the juice to drive home.  I foresee flywheels sitting in your basement, silently spinning to power you when the grid goes down; flywheels inside office towers to run the entire plant;  flywheels inside diesel or electric buses to both stretch the drive and give that big oomph to get rolling from a standing start.  You already have this in special flywheel-incorporated transmissions in some trucks, to allow for the fitting of a much smaller engine.  Who needs a battery?  Nobody.

 

Hmm, the more you know. Thanks for this. 

[Harry 0]

Oil demand will continue to increase. When anyone in the U.S. trades their conventional vehicle in for an electric vehicle, their conventional vehicle enters the secondary and tertiary markets in the U.S., and eventually moves south, to Mexico, Central and South America.  Yes, there are laws in place to impede this, but they only add a small cost.  Demand for refined motor fuel will continue to increase, as every teen aged boy in the countries south of the U.S. dreams of a new or used pickup truck or some other conventional vehicle to cruise around the town plaza (just like in the U.S. but with fewer enforced safety and pollution control requirements).  Most countries to our south do not have sufficient electric power generation and distribution capacity to switch over to electric vehicles, but they all have well-established motor fuel distribution channels, and essentially unlimited demand for conventional vehicles, limited only by economic constraints.  Similarly, conventional vehicles from the EU eventually move into Russia and the less developed former Soviet satellite countries.  In India, demand for 4 wheel drive on/off road vehicles is growing faster than most of us can imagine, along with a growing aftermarket accessory industry, similar to what we have in the U.S.  And speaking of the U.S., demand for large, conventional vehicles is growing much faster than demand for electric vehicles, and it continues to grow.  In my analysis, the sector most likely to go electric is local delivery and service trucks, and even then, all the conventional trucks replaced by electric will find 2nd and 3rd owners and will remain in service for decades.

[Vakranas + 1]

On 6/7/2018 at 9:40 PM, Outlaw Jackie said:

EV's will be powered by coal... Where else will the electrons come from? Solar... Windmills? Anyone who questions that is kidding themself. 

Coal will be a component of energy production but more and more natural gas and other sources of energy are constituting the energy supply.

Remember Coal used to be about 40% a decade ago.

https://www.eia.gov/tools/faqs/faq.php?id=427&t=3

For Texas

https://www.eia.gov/state/?sid=TX#tabs-4

 

Coal is not even the pre-dominant source of electricity.