Electric cars and “peak oil”. Truth in the model - 3
After the article about the short-term prospects of the “shale”, I would like to continue the journey into the future: when will oil go to rest? To talk about such a distant future, it makes sense to turn to how system transitions and the spread of innovation occur.
In the film “The Matrix” there is an episode where Morpheus philosophizes that the virtual world obeys its own laws, which are radically different from the laws of the real world. And today it can be seen more than ever: in the digital world, concepts and products flourish and die in a few years, sometimes days. For example, the daily audience of the game “Pokemon Go” in two weeks reached half the level of Twitter, Facebook in five years reached 10% of the global population, and Microsoft has forcefully translated hundreds of millions of users from Windows 7 to Windows 10 by changing the update mechanisms. As a result, a false impression is created that the rest of the world is fast - from day to day the planet will be filled with electric cars, solar panels and bitcoins.
But the dissemination of concepts and objects in the real, physical world is associated with significant expenditure of resources - energy, material, financial. Material values ​​do not lend themselves to copy-paste, and waiting for a parcel from China takes weeks, unlike email. The rate of penetration of personal cars into society was extremely slow - every tenth earthling acquired a car only 65 years after the start of its industrial production. Mobile phones took 20 years to do this and, by the standards of the real world, this is a super-fast exception to the rules - perhaps it’s about the small size and price of each device, as well as having killer advantages over a landline phone.
Since we are talking about energy and oil, it is appropriate to mention solar energy: in 1982, a 1-megawatt solar power station appeared, the year 2000 brought a total of 1 gigawatt for all stations. By 2016, solar power is widely known, but it takes a disproportionately small amount - 1.3% of world electricity production and 0.5% of total primary energy production using 295 gigawatts. Or another example: very few people know, but once electric cars occupied 30% of the entire car park and it was in 1900 in the USA. The next milestone is the 1990s, when General Motors, Toyota, etc. produced for the American market several thousand electric vehicles, but the projects were deemed unsuccessful. Tesla released its first electric vehicle model in 2008, in 2016 the company's sales amounted to 84 thousand units.
Cutting off electric cars of the beginning of the century, we can say that decades are ahead and ahead of the victorious end of the decade: in 2016, 466 thousand electric vehicles (excluding hybrids) were produced against almost hundreds of millions of vehicles with an internal combustion engine (ICE) - a difference of 200 times. Secondly, in contrast to the “fast” mobile phones, electric vehicles lack killer features - these are fundamental advantages over conventional cars. At the moment, rather the opposite.
Moral: the real world, as opposed to the virtual, is very inertial and innovations have been spreading throughout society for decades. You should not repeat the mistakes of previous generations and declare that in a couple of years everything will turn upside down. The real world does not work that way and obeys its own slow laws.
In the future transition from the oil industry and the internal combustion engine for electricity and electric cars can be identified a couple of key points. This is the “peak of oil” when the maximum of production and demand is passed, and a multiple decrease in oil consumption, which will mean a completed transition. Petrochemical and other industries, aviation, marine, cargo transport, etc. they will not give much lower demand, so in the perspective of two decades only the “peak of oil” is waiting for us. Moreover, the current situation in the oil industry and oil reserves say that the “peak” will be associated not with production restrictions, but with a decrease in consumption.
Here is the structure of oil consumption in dynamics:
What is worth noting: NET transportation consumption of oil (grayed out on the graph) essentially stagnates for 30 years, there are no revolutions there. Rather, the opposite is true and cheap oil is now stimulating this sector. But over the growing sector of passenger cars hung the risk of the spread of electric vehicles and all the talk about the “peak of oil” is logical to reduce to him. The consumption of the transport sector is growing linearly over 30 years, respectively, to make a “peak” you need to reverse this growth. On average, it is 1.1-1.2 million barrels per day (MB / d) annually, and in the past few years, due to low prices, the growth in oil demand has even accelerated.
And another surprising fact: the graph shows no signs of an increase in the efficiency of the internal combustion engine, which is often attempted to explain the future decline in oil consumption. The reason is simple: the fleet is growing much faster than efficiency, exponentially. Secondly, the average annual mileage of the car also increases. The ratio can be visually displayed on the chart:
On the one hand, a three-fold increase in the fleet, on the other - a slight reduction in the annual consumption of petroleum products per car
Above it can be seen that the consumption of oil by passenger cars is growing and quite a lot, on average by 0.5 MB / d per year. It is understandable - tens of millions of cars are produced per year, 69.5 million in 2016. But not all production de facto provides for this increase in consumption, as some of the machines go out of service and need to be replaced with new ones. At the same time, new cars consume less fuel and two out of service are equivalent in consumption to about three new ones. Considering the replacement of old cars and the increase in efficiency, production can be broken down into the following components:
The sum of the fields is the annual production
Accordingly, of the 69.5 million production machines, only 25.5 million are responsible for the increase in oil consumption. And to stop this growth they need to be replaced by the production of electric vehicles. The annual production of a large number of electric vehicles will lead to a reduction in oil consumption by this sector.
But transport is not only cars. World passenger and cargo turnover grows with the economy, so consumption growth continues in the aviation, maritime and cargo transport. Airplanes will fly kerosene for a very long time; maritime transport, in theory, may switch to liquefied natural gas, but there is no progress yet and no plans . Trucks behind in electrification for at least ten years and until 2030 will not have time to significantly affect. So there are other sectors in the world that provide and will ensure the growth of oil consumption. The total growth in consumption of these three sectors is about 0.65 MB / d per year, which means that an additional 31 million electric vehicles will be required for its leveling. Total - 56 million. Of course, the numbers are conditional, but the main goal is to understand the situation at least in general terms.
At the same time, the vehicle fleet is increasing exponentially, which means that over time, more and more electric vehicles will be required for the “peak of oil”. Secondly, electric cars, too, eventually drop out of the fleet and they need to be replaced with new ones. Therefore, the “peak of oil” runs away from electric vehicles:
Achieving the production of the yellow line will lead to a “peak of oil”
While the production of electric vehicles is developing relatively slowly - in a cubic parabola, and in the foreseeable future it will not be possible to achieve the production required for the “peak of oil”. But if a number of factors coincide in the future, growth may accelerate and go to the exponent. For example, combining the concepts of electric and autopilot can significantly reduce the cost of urban taxi services. Or there will be a breakthrough in batteries and electric vehicles will finally have a killer feature for price, range, and so on. Well, or other sectors of oil consumption will begin to decline, which can not be excluded.
No wonder that the “peak of oil” requires such transcendental production of electric vehicles. The global production of motor vehicles with an internal combustion engine will soon pass for a hundred million, and a fleet of cars for one and a half billion. Million or even a dozen of millions of electric vehicles, obviously, not get off.
As a test of adequacy, the results should be compared with reputable organizations. For example, the International Monetary Fund recently tried to assess oil consumption in the long term, putting current trends on a couple of historical analogies: the transition from horse craving to cars and the dynamics of car production in the early 20th century. In the over-optimistic scenario for electric vehicles, the “peak of oil” scenario occurs around 2027, and in 2040 the demand for oil will be less than the current one-third. However, the scenario assumes a 200-fold growth of the fleet of electric vehicles over 10 years, which makes this historical analogy unsuitable. In a more adequate scenario, oil “picks up” in the 2030s and in 2040, demand is only 4% below the current level.
According to the Bloomberg agency’s energy division, the contribution of electric vehicles to oil consumption replacement is also small - the entire fleet of electric vehicles (rather than a separate year’s production), taking into account plug-hybrids, in 2016 replaced 0,017 MB / d of oil consumption. Regarding the average annual growth in demand for oil (1.2 MB / d), and even more so the total oil consumption (96 MB / d) is an insignificant figure.
At the same time I will mention the previous article on the topic “oil vs electric vehicles”, where I used a different methodology, but I received a similar result: a peak in the 2030s with a fleet of several hundred million electric vehicles.
By sequencing the above, it is most likely that the “peak of oil” will occur somewhere in the 2030s. This is incredibly far away if you live for yourself today too, but very close, if you think in terms of the scale of a nation and a state. Reducing the demand for oil will in many respects dispense with old fields without exploration and development of new ones, which will reduce the cost of production and, accordingly, world prices.
The extraction and export of oil as the basis of the Russian economy has long been criticized under the pretext of leaving a valuable and non-renewable resource for children and grandchildren. But because of the “peak of oil” and electric cars, oil will be valuable for no more than a couple of decades. And then it is already unknown whether it will be profitable to export it at all after mining in the distant Arctic Ocean, since cheap deposits in Western and Eastern Siberia will have been exhausted by this time. Therefore, the strategy to leave the oil “for later” is wrong - it needs to be extracted right now, as long as it makes sense. Next, invest profit in something useful and to obtain a positive feedback. And most importantly, there are no guarantees that it will turn out better without exporting oil and gas - there is no need to go far for examples on the former USSR. Considering that even cheap oil is much more than 20 years old, we should hurry, and the Russians of the late 21st century may not appreciate oil as a gift from their ancestors.
There is an opinion that oil is a curse of Russia, because of which the country was not able to develop more high-tech industries and within the framework of such a hypothesis, further efforts to increase production and export will only be detrimental. In fact, one does not interfere with the other, and in the world there are enough developed countries with similar levels of penetration of mining in the economy - Norway, Australia, Canada.
There may be a desire to leave the oil to the grandchildren of their own strategic interests — on aviation and so on. However, in this case, consumption will be small and old for that time will cope with it. Secondly, oil can be produced from gas , which we still have for a hundred years and for coal , which is two hundred. And thirdly, from air and water - to take carbon from the first, hydrogen from the second. Processes from gas and coal have long been worked out, and from air and water so far only the level of laboratory experiments and payback for a couple or three hundred dollars per barrel of oil.
How the “peak of oil” will reshape the world is a debatable question. However, oil will still be needed in huge quantities, even though consumption will decline. Secondly, no less difficult task is to replace natural gas, so it will take a long time to follow the competition of energy sources in this protracted hydrocarbon era.
Previous publications on the topic:
Truth in the model - 1 : modeling the production of shale oil
The truth in the model - 2 : modeling of power flows and accumulation of electricity for the power system with a large share of renewable energy
The speed of innovation
In the film “The Matrix” there is an episode where Morpheus philosophizes that the virtual world obeys its own laws, which are radically different from the laws of the real world. And today it can be seen more than ever: in the digital world, concepts and products flourish and die in a few years, sometimes days. For example, the daily audience of the game “Pokemon Go” in two weeks reached half the level of Twitter, Facebook in five years reached 10% of the global population, and Microsoft has forcefully translated hundreds of millions of users from Windows 7 to Windows 10 by changing the update mechanisms. As a result, a false impression is created that the rest of the world is fast - from day to day the planet will be filled with electric cars, solar panels and bitcoins.
But the dissemination of concepts and objects in the real, physical world is associated with significant expenditure of resources - energy, material, financial. Material values ​​do not lend themselves to copy-paste, and waiting for a parcel from China takes weeks, unlike email. The rate of penetration of personal cars into society was extremely slow - every tenth earthling acquired a car only 65 years after the start of its industrial production. Mobile phones took 20 years to do this and, by the standards of the real world, this is a super-fast exception to the rules - perhaps it’s about the small size and price of each device, as well as having killer advantages over a landline phone.
Since we are talking about energy and oil, it is appropriate to mention solar energy: in 1982, a 1-megawatt solar power station appeared, the year 2000 brought a total of 1 gigawatt for all stations. By 2016, solar power is widely known, but it takes a disproportionately small amount - 1.3% of world electricity production and 0.5% of total primary energy production using 295 gigawatts. Or another example: very few people know, but once electric cars occupied 30% of the entire car park and it was in 1900 in the USA. The next milestone is the 1990s, when General Motors, Toyota, etc. produced for the American market several thousand electric vehicles, but the projects were deemed unsuccessful. Tesla released its first electric vehicle model in 2008, in 2016 the company's sales amounted to 84 thousand units.
Cutting off electric cars of the beginning of the century, we can say that decades are ahead and ahead of the victorious end of the decade: in 2016, 466 thousand electric vehicles (excluding hybrids) were produced against almost hundreds of millions of vehicles with an internal combustion engine (ICE) - a difference of 200 times. Secondly, in contrast to the “fast” mobile phones, electric vehicles lack killer features - these are fundamental advantages over conventional cars. At the moment, rather the opposite.
Moral: the real world, as opposed to the virtual, is very inertial and innovations have been spreading throughout society for decades. You should not repeat the mistakes of previous generations and declare that in a couple of years everything will turn upside down. The real world does not work that way and obeys its own slow laws.
Oil consumption: steady growth for 30 years
In the future transition from the oil industry and the internal combustion engine for electricity and electric cars can be identified a couple of key points. This is the “peak of oil” when the maximum of production and demand is passed, and a multiple decrease in oil consumption, which will mean a completed transition. Petrochemical and other industries, aviation, marine, cargo transport, etc. they will not give much lower demand, so in the perspective of two decades only the “peak of oil” is waiting for us. Moreover, the current situation in the oil industry and oil reserves say that the “peak” will be associated not with production restrictions, but with a decrease in consumption.
Here is the structure of oil consumption in dynamics:
What is worth noting: NET transportation consumption of oil (grayed out on the graph) essentially stagnates for 30 years, there are no revolutions there. Rather, the opposite is true and cheap oil is now stimulating this sector. But over the growing sector of passenger cars hung the risk of the spread of electric vehicles and all the talk about the “peak of oil” is logical to reduce to him. The consumption of the transport sector is growing linearly over 30 years, respectively, to make a “peak” you need to reverse this growth. On average, it is 1.1-1.2 million barrels per day (MB / d) annually, and in the past few years, due to low prices, the growth in oil demand has even accelerated.
And another surprising fact: the graph shows no signs of an increase in the efficiency of the internal combustion engine, which is often attempted to explain the future decline in oil consumption. The reason is simple: the fleet is growing much faster than efficiency, exponentially. Secondly, the average annual mileage of the car also increases. The ratio can be visually displayed on the chart:
On the one hand, a three-fold increase in the fleet, on the other - a slight reduction in the annual consumption of petroleum products per car
“Peak oil” arithmetic
Above it can be seen that the consumption of oil by passenger cars is growing and quite a lot, on average by 0.5 MB / d per year. It is understandable - tens of millions of cars are produced per year, 69.5 million in 2016. But not all production de facto provides for this increase in consumption, as some of the machines go out of service and need to be replaced with new ones. At the same time, new cars consume less fuel and two out of service are equivalent in consumption to about three new ones. Considering the replacement of old cars and the increase in efficiency, production can be broken down into the following components:
The sum of the fields is the annual production
Accordingly, of the 69.5 million production machines, only 25.5 million are responsible for the increase in oil consumption. And to stop this growth they need to be replaced by the production of electric vehicles. The annual production of a large number of electric vehicles will lead to a reduction in oil consumption by this sector.
But transport is not only cars. World passenger and cargo turnover grows with the economy, so consumption growth continues in the aviation, maritime and cargo transport. Airplanes will fly kerosene for a very long time; maritime transport, in theory, may switch to liquefied natural gas, but there is no progress yet and no plans . Trucks behind in electrification for at least ten years and until 2030 will not have time to significantly affect. So there are other sectors in the world that provide and will ensure the growth of oil consumption. The total growth in consumption of these three sectors is about 0.65 MB / d per year, which means that an additional 31 million electric vehicles will be required for its leveling. Total - 56 million. Of course, the numbers are conditional, but the main goal is to understand the situation at least in general terms.
At the same time, the vehicle fleet is increasing exponentially, which means that over time, more and more electric vehicles will be required for the “peak of oil”. Secondly, electric cars, too, eventually drop out of the fleet and they need to be replaced with new ones. Therefore, the “peak of oil” runs away from electric vehicles:
Achieving the production of the yellow line will lead to a “peak of oil”
While the production of electric vehicles is developing relatively slowly - in a cubic parabola, and in the foreseeable future it will not be possible to achieve the production required for the “peak of oil”. But if a number of factors coincide in the future, growth may accelerate and go to the exponent. For example, combining the concepts of electric and autopilot can significantly reduce the cost of urban taxi services. Or there will be a breakthrough in batteries and electric vehicles will finally have a killer feature for price, range, and so on. Well, or other sectors of oil consumption will begin to decline, which can not be excluded.
No wonder that the “peak of oil” requires such transcendental production of electric vehicles. The global production of motor vehicles with an internal combustion engine will soon pass for a hundred million, and a fleet of cars for one and a half billion. Million or even a dozen of millions of electric vehicles, obviously, not get off.
Side View: IMF and Bloomberg
As a test of adequacy, the results should be compared with reputable organizations. For example, the International Monetary Fund recently tried to assess oil consumption in the long term, putting current trends on a couple of historical analogies: the transition from horse craving to cars and the dynamics of car production in the early 20th century. In the over-optimistic scenario for electric vehicles, the “peak of oil” scenario occurs around 2027, and in 2040 the demand for oil will be less than the current one-third. However, the scenario assumes a 200-fold growth of the fleet of electric vehicles over 10 years, which makes this historical analogy unsuitable. In a more adequate scenario, oil “picks up” in the 2030s and in 2040, demand is only 4% below the current level.
According to the Bloomberg agency’s energy division, the contribution of electric vehicles to oil consumption replacement is also small - the entire fleet of electric vehicles (rather than a separate year’s production), taking into account plug-hybrids, in 2016 replaced 0,017 MB / d of oil consumption. Regarding the average annual growth in demand for oil (1.2 MB / d), and even more so the total oil consumption (96 MB / d) is an insignificant figure.
At the same time I will mention the previous article on the topic “oil vs electric vehicles”, where I used a different methodology, but I received a similar result: a peak in the 2030s with a fleet of several hundred million electric vehicles.
Should I leave the oil to my grandchildren?
By sequencing the above, it is most likely that the “peak of oil” will occur somewhere in the 2030s. This is incredibly far away if you live for yourself today too, but very close, if you think in terms of the scale of a nation and a state. Reducing the demand for oil will in many respects dispense with old fields without exploration and development of new ones, which will reduce the cost of production and, accordingly, world prices.
The extraction and export of oil as the basis of the Russian economy has long been criticized under the pretext of leaving a valuable and non-renewable resource for children and grandchildren. But because of the “peak of oil” and electric cars, oil will be valuable for no more than a couple of decades. And then it is already unknown whether it will be profitable to export it at all after mining in the distant Arctic Ocean, since cheap deposits in Western and Eastern Siberia will have been exhausted by this time. Therefore, the strategy to leave the oil “for later” is wrong - it needs to be extracted right now, as long as it makes sense. Next, invest profit in something useful and to obtain a positive feedback. And most importantly, there are no guarantees that it will turn out better without exporting oil and gas - there is no need to go far for examples on the former USSR. Considering that even cheap oil is much more than 20 years old, we should hurry, and the Russians of the late 21st century may not appreciate oil as a gift from their ancestors.
There is an opinion that oil is a curse of Russia, because of which the country was not able to develop more high-tech industries and within the framework of such a hypothesis, further efforts to increase production and export will only be detrimental. In fact, one does not interfere with the other, and in the world there are enough developed countries with similar levels of penetration of mining in the economy - Norway, Australia, Canada.
There may be a desire to leave the oil to the grandchildren of their own strategic interests — on aviation and so on. However, in this case, consumption will be small and old for that time will cope with it. Secondly, oil can be produced from gas , which we still have for a hundred years and for coal , which is two hundred. And thirdly, from air and water - to take carbon from the first, hydrogen from the second. Processes from gas and coal have long been worked out, and from air and water so far only the level of laboratory experiments and payback for a couple or three hundred dollars per barrel of oil.
How the “peak of oil” will reshape the world is a debatable question. However, oil will still be needed in huge quantities, even though consumption will decline. Secondly, no less difficult task is to replace natural gas, so it will take a long time to follow the competition of energy sources in this protracted hydrocarbon era.
Previous publications on the topic:
Truth in the model - 1 : modeling the production of shale oil
The truth in the model - 2 : modeling of power flows and accumulation of electricity for the power system with a large share of renewable energy
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