IEA Chief: EVs Are Not The End Of The Oil Era

Yves here. Repeat after me: Elon Musk will not save you. EVs are having a trivial impact on oil use.

By Tsvetana Paraskova, a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets. Originally published at OilPrice

Electric vehicles (EVs) today are not the end of global oil demand growth, nor are they the key solution to reducing carbon emissions, Fatih Birol, the Executive Director of the International Energy Agency (IEA), said during the ‘Strategic Outlook on Energy’ panel at the World Economic Forum in Davos on Tuesday.

According to Birol, analysts need to put things into perspective and consider that five million EVs globally is nothing compared to 1 billion internal combustion engine (ICE) cars.

“This year we expect global oil demand to increase by 1.3 million barrels per day. The effect of 5 million cars is 50,000 barrels per day. 50,000 versus 1.3 million.”

“Cars are not the driver of oil demand growth. Full stop,” Birol said.

The drivers of oil demand growth are trucks, the petrochemical industry, and planes, with Asia just starting to fly, the IEA’s head said.

“To say that the electric car is the end of oil is definitely misleading,” Birol noted.

“Electric cars today are not the end of the oil era,” he reiterated.

EVs are not the ultimate solution to the climate change problem because most of the electricity used to charge the vehicles comes from fossil fuels, Birol added.

“Where does the electricity come from, to say that electric cars are a solution to our climate change problem? It is not,” he said.

In its latest Global EV Outlook, the IEA said last year that the outlook for EVs is bright, but requires ambitious targets. According to the agency, the number of electric cars on the road could reach 125 million by 2030 under the IEA’s New Policies Scenario, which includes national pledges made for the Paris Agreement.

Some environmentalists have been accusing the IEA of skewing its findings and policies toward favoring the oil and gas industry. According to a 2018 report from Oil Change International, the IEA “is holding governments back” from achieving the Paris Agreement goals, as the IEA’s New Policies Scenario roadmap “steers those decisions towards levels of fossil fuel use that would cause severe climate change.”

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79 comments

  1. Joe Well

    If the main drivers of fossil fuel use include trucks and planes, why isn’t there a massive push for electric trains, since trains are the main competitor to both, are usually much more efficient, and we’ve had electric trains for over 100 years?

    (Serious, non-rhetorical question by someone who’s not well informed on this issue, and I would be delighted if someone could point me to an explanation why.)

    Reply
    1. Very

      Trains are old-school tech.
      And we can’t be going backwards.
      That wouldn’t be progressive.

      We need fusion power, AI driving cars and people living on Mars!

      It’s probably not the main reason but I suspect the we have a very strong faith in progress and it’s not easy to go against it.

      Reply
        1. drumlin woodchuckles

          Since cars (1880s) came decades after trains (1840s), cars will always be 40 years younger than trains and will therefor always be 40 years shinier.

          The trick is to stop valuing the new and shiny just because it is new and shiny. Start valuing the old and the faithful, the steady , tried and true.

          What’s the opposite of “innovation”? How about “retrovation”? The mining of the proven past for superior solutions to today’s problems. A massive restoration of America’s missing networks of trains, trolleys and streetcars would allow us to retrovate our way out of some of our innovation-based problems.

          Reply
          1. Comradefrana

            Ouch, you make it sound like there were no innovations for trains in the last century. You don’t have to just look at the past if you want more trains in the US.

            Reply
            1. drumlin woodchuckles

              Taking your caveats on board makes the case for retrovation even stronger.

              Take the retrovative techno-system known as “trains” and improve it with all the innovative tweaks and alterations which really ARE improvements; and “back to the trains” looks even better.

              Reply
      1. pierre demaere

        And for oil transportation, pipelines are more efficient and safer than trucks and trains. Yet, environmentalists are against all of these, but definitely pipelines. It makes me wonder if they are not supported by the oil industry!

        Reply
        1. AndrewJ

          I’m not terribly interested in digging too deep on this this morning, but a very cursory web search indicates that rail and possibly truck transport may indeed be “safer” for the environment than a pipeline. On a conceptual level, this makes sense, as accidents on rail or road will always only release a limited volume of the death-liquid, while a pipeline leak needs to be detected and shut off by a company with a hideous safety record. As someone whose primary concern is safety of drinking water and soil health, I remain opposed to pipelines for this reason. Put it on a railcar, thank you.

          Reply
          1. Kevin Nell

            47 people died when an oil rail car crashed and burned in Canada. Find me an example were 47 innocents burned to death from oil in a pipeline. Pipelines are safer than rail cars.

            https://www.bbc.com/news/world-us-canada-42548824

            But Warren Buffet owns a large percentage of BNSF rail that makes millions from hauling oil. Why activists line up to protest pipelines and advance this billionaire’s economic interests is confounding.

            Reply
            1. pierre demaere

              Great point! I doubt that pipeline companies do not monitor leaks. While they do happen (I guess earthquakes, slides, rocks,…) one wonder if there are any analysis on accident per volume being transported. People matter more than all other fauna and flora. If people living on the land are there to help monitor, I am sure that they will be very responsible and guard these pipelines like their house.

              Reply
          1. pierre demaere

            Don’t they realize that we still use it and a lot. NO ONE will ditch its ICE car for an EVs for peanuts, unless one is a millionaire. They do not understand basic economics and personal needs. Change takes time and sadly people do not have the resources to forego/lose 10 K+ to buy an EV car. Truck fleet need to be replaced, but that is even more expensive. Politicians should incentive them.

            Reply
      2. sanxi

        Backward,, as in 1956, the US congress limited trains in the US to a top speed of 77 miles per hour‽ With very few exceptions that’s still the case.

        Reply
        1. drumlin woodchuckles

          Train speeds should be limited to the level where greater speed would start sharply raising air resistance against the greaterly- speeding train. If that “air-resistance” breakeven point is above 77 mph, then trains can run at whatever that greater “air-resistance” breakeven speed-point is.

          Here is an article which makes and illustrates that case for every form of motorized transport . . . planes, trains and automobiles. Here is the link:
          https://www.lowtechmagazine.com/2008/09/speed-energy.html

          Reply
    2. SteveB

      Class 1 locomotives (long haul freight) are not purely electric. They are diesel-electric hybrids.
      A very large diesel motor generator provides power to the traction motors on each axle.

      It’s been a longtime for me, but in the US, General Electric and Electromotive were “the”companies that made class 1 locomotives.

      Reply
      1. upstater

        Modern diesel electric locomotive are NOT hybrids. Hybrids utilize 2 sources. Locomotives generate electricity for traction motors, but there is no storage. Hybrid cars are powered by gasoline and/or electricity.

        Reply
        1. pat b

          nothing says a large Diesel-Electric locomotive can’t be a Hybrid. Right now they have
          big resistors to dump power. They could have batteries and then run the diesel at
          it’s optimum run speed.

          https://en.wikipedia.org/wiki/Hybrid_train#Locomotives
          “A hybrid train is a locomotive, railcar or train that uses an onboard rechargeable energy storage system (RESS), placed between the power source (often a diesel engine prime mover) and the traction transmission system connected to the wheels. Since most diesel locomotives are diesel-electric, they have all the components of a series hybrid transmission except the storage battery, making this a relatively simple prospect.”

          Reply
    3. Alex V

      Some of the issue is the “last mile” problem. Trains are extremely efficient for moving cargo or people long distances, but it’s how you move things at the beginning and end of the journey that prevents more train use in the US – you still need cars, trucks, or buses to get things to their final destination. These problems can be solved (as in Europe), but require the will to do so. Another issue is that most of the infrastructure in dense areas of the US has been built to accommodate only road transport, and would require significant reconfiguration to bring trains back.

      Reply
      1. Veracitor

        In point of fact, the USA moves proportionately MUCH more freight by rail than Europe and is MUCH more fuel-efficient:

        [excerpt, click for details] According to a report from the European Union (link), 46 percent of EU-27 freight goes by highway while only 10 percent goes by rail, while in the U.S. 43 percent goes by rail and only 30 percent by road. Thus, we’re using our rail system far more effectively than Europe. This is not just from an energy view but also from a consumer-cost view, as rails cost less than trucks for freight but more than cars for passengers.

        Reply
    4. upstater

      US and Canadian railroads are “investor owned”. As such, they seek to maximize “shareholder value”. Electrifying railroads is a proven technology and would result in much greater productivity and capacity, but the payback period is measured in many years, perhaps decades. Executives are stuffing their pockets with stock and focus on the short term. Almost all US and Canadian railroads borrow more money for stock buy-backs than they spend on capital investment (most of which is replacement and not for new capacity).

      In Russia most rail freight is electrified. After the fall of the USSR, electrification continued. Freight trains are generally short in length and move at passenger train speeds. Rail freight is the intended as the primary means of freight by law. Switzerland is much the same; a referendum in the early 1990s mandated rail freight except for local deliveries.

      In the US and Canada, freight trains are essentially “land barges”. They are 12,000-15,000 tons and 2+ miles in length. The average speed on US railroads is about 25 MPH, although mainlines can move up to 70 MPH.

      Reply
      1. drumlin woodchuckles

        Did corporations seek to maximize “shareholder value” before the Milton Friedman Revolution? If not, then is there a way to return them to the headspace they occupied before the Milton Friedman Revolution?

        Among all the other things we need, we need a de-Milton anti-Friedman counter-Revolution in basic corporate concepts.

        Reply
        1. Scott1

          I’m going to stop here since I agree and I believe ideology over pragmatism is the problem.

          I was respected if not loved because at work I was funny while being safe and pragmatic.

          It was pragmatic for FDR to say and make happen government employment of surplus labor. Pragmatists of the first orders were brought in when it became war times.

          The ideals of America and the pragmatism of Americans meant those who understood how you could make hundreds of thousands of ships, planes, trucks, jeeps, guns, and the bomb we paid to do those necessary things when dumbasses sent the ships out in silhouette from the lights of Atlantic City or Miami.
          Maritime sailors died because of that. Blockheads made sailor deaths happen.

          They talk about tonnage of shipping but sailors died. It was in fact sailors that saved Athens & was so clear that they became citizens regardless of deeds to land. It is a big deal for a man who has nothing but himself to have respect so much as to have rights.

          Use of our Treasury regardless of big numbers never seen before is the most pragmatic thing to do when faced with the requirement that is mobilization. We have to mobilize to suck CO2 out of the air.

          I watched Peter Wadhams S.D whatever SD stands for at Cambridge UK who said we were not going to stop using oil. What that means is that we are doomed unless we start sucking CO2 out of the air.

          Peter Wadhams even appealed to American Engineers to come up with these mechanisms & the systems to employ them. Politicians who do not know they need engineers to fix the problem are worthless in my world.

          Reply
        2. pat b

          It’s funny, there is no law specifying a company maximize shareholder value,
          merely they must act in shareholder interest

          Reply
    5. Louis Fyne

      …why isn’t there a massive push for electric trains, …

      (at least for the US) that would require denser zoning at the local level and bulldozing a lot of farmland and/or urban neighborhoods to lay down 4+ tracks. not happening. NIMBY.

      And tunelling is expensive, especially in cities where the ground beneath you is a maze of electric, gas, sewer, cable, fiber lines.

      (and if you’re cynical) more people have their hands in either internal comb. engine tech or EV tech. Electric trains are dominated by a few big players. And apparently they’re not as good at lobbying as Elon.

      and ya, to parrot others. it just ain’t sexy. i want a shiny new toy.

      Reply
    6. Anon

      Trains, both freight and passenger, are highly fuel efficient mode of transportation. They are both driven by electric motors that provide the locomotion. The diesel engines that you hear from a passing freight train are not turning the wheels directly, but turning electricity generators which provide unlimited variable power to electric motors attached directly to the wheel shafts (known as “trucks”). Yes, they are “hybrid” locomotives.

      High speed passenger locomotives like those in Japan are all electric. However that requires a “hot” electrical source (line) all along the railway. Long electrical lines waste energy. So there is a tradeoff to be made versus the hybrid locomotive.

      Individual electric vehicles are not the solution to efficient transportation because they don’t solve the problem of “gridlock” (wasted time in movement). Mass transit is the better environmental solution.

      Why isn’t there a massive push for electric trains?: Sunk costs in an Interstate Highway System and a suburban lifestyle.

      Reply
      1. Joe Well

        In New England, they’ve been pushing to electrify the passenger rail between Boston and New York for literally 100 years, which is what brought the issue of electric trains to my mind.

        On a side note, it really does feel like the Golden Age of sane (e.g., not automobile-centric) American infrastructure ended with the Great Depression, and any project that didn’t get substantially underway by the end of the 1920s faced vastly greater headwinds when the country started building again post-WWII.

        Reply
    7. pat b

      “why isn’t there a massive push for electric trains”

      Depending where you are, there are lots of electric trains.
      The trick is you need the rails and the operators to agree on investment.
      This also pays off best on heavily used rail segments.
      Amtraks’ NorthEast corridor has been electrifying because the usage is so heavy.

      Now we may see a rise of Hybrid-Electric trains. After all, trains are mostly Diesel-Electric.
      If you add battery, and swap the diesel over to ranking cycle and can add a catenary to
      charge batteries, you could see these become more intermittent and using the diesels only to
      handle gaps.

      The big problem in the US is trains are culturally old school. They like their paid for diesels.

      Reply
  2. Philipp

    Combustion engines for mobility will be a thing the past.

    It’s not Elon Musk that will do that. It’s just physics. And people are finally starting to realize that. You may not be aware of all the announced cars, trucks, bikes and even planes but there are so many new companies getting into the business that even the behemoths realize they are on the wrong track. Even Volkswagen announced to stop developing new cars with internal combustion motors by 2026.

    Exchanging every single car, truck, bike for electric versions sould have a bit of an impact even if we exclude carbon question. And why you would be interested in anything the IEA has to say about renewables and related is beyond me.

    https://steinbuch.wordpress.com/2017/10/20/better-predictions-in-renewable-energy/

    Reply
    1. PlutoniumKun

      Thanks for that link, its very good. As it says, the IEA (among other agencies) has consistently underestimated the growth of renewables and has consistently got the costing wrong. We’ve already gone past the tipping point for which in most key markets solar and wind are the cheapest option, and there have been huge advances recently in storage technology. Fossil fuels are running on historic investment in fixed plant and on cheap credit, not to mention huge levels of hidden subsidy. The car industry has changed radically in just a few years, nearly all the majors now have switched their investments over to batteries.

      Another key issue for fuel use is that EV’s don’t have to replace all billion cars to dramatically reduce fuel use. EVs are far cheaper to use per mile, so when a family buys one it will be the car used for most day to day mileage, the big fossil fuel car will be mostly sitting in the garage for weekend trips and holidays. This will be the typical transition for the ‘average’ 2 car family. An EV for commuting, shopping, picking up the kids, an older big car for occasional or back up use. Its simply home economics. Its this potential pattern that has the oil industry most worried, not the number of EV’s produced.

      The core question of course (apart from whether its too late for the climate, which it probably is), is whether there are fundamental choke points for a transition. Clearly there are issues with lithium availability, rare earths, existing plant investment not to mention infrastructural problems like lack of charging points. The conventional wisdom is that these will choke off EV adoption, although I have to say I’m not sure – when you look at cars like the BMW i3 the industry seems to be able to work around many of these issues through good engineering (minimising key inputs, making much lighter frames, etc). Although given the history of the past 10 years, the big question is whether China will remain a driver of capacity for solar panels, batteries, etc. It is China which has led the way with scale, not to mention a ruthless approach to ensuring raw material availability. It could be that a closing up of China could be bad news for the planet if it stops pouring money into replacement technologies.

      Reply
      1. Quanka

        I would tend to agree with these comments — converting a billion vehicles will take time. The fossil fuel and automotive industries have been dragging their feet for decades … but it does seem as the tide is turning. This is arguably one of those amazingly large lost opportunities with the Trump administration policies … propping up dying FF industries.

        The PK transition concept exactly matches my family scenario. We live in an urban env’t and use the EV for a growing portion of car trips. A slow replacement or conversion and the EV has surprised us both in how frequently we use it, how easy is it to care for. I think for non-U.S. citizens, the potential of electric bikes, EV scooters and smaller vehicles to meet commuting needs is huge – the U.S. will always drag or collective feet on this topic.

        Reply
    2. cnchal

      > And why you would be interested in anything the IEA has to say about renewables and related is beyond me.

      Consider the post a pinata you can swing a stick at. A direct hit and all sorts of goodies come out.

      Anyway, this is key.

      The drivers of oil demand growth are trucks, the petrochemical industry, and planes, with Asia just starting to fly, the IEA’s head said.

      A billion plus Chinese flying all over hell’s half acre like Americans and Europeans do, will really help reduce CO2 emissions. Sounds like combustion engines are just getting started.

      Consider that a Boeing 747 on a flight from Singapore to London will deposit nearly a million pounds of CO2 into the atmosphere in that half day flight, which is just about the same mass as the plane weighs on takeoff, while it burns through approximately 300,000 lbs of jet fuel on that trip.

      Also, note how much CO2 was spewed into the atmosphere getting Davos Man to Davos so human capital could be lectured to. It was lots. Davos Man is personally responsible for heating up the planet by a few degrees, considering the one Davos Man per plane load.

      Reply
      1. Philipp

        @Cnchal:

        You are right. The article is a bit of a grab bag. I don’t argue where the current growth comes from because i don’t know. And I don’t say air trafic won’t be a problem because it will be.

        My point is about road traffic which emmits three quarters of all CO2 emissions from transportation. Those will all be switching to electric. Volkswagens sais they are working back from the 0% emssion goal in 2050. So their plan is to develop the last combustion engine vehicle in 2026, taking about 7 years. Then the plan is to sell it for 7 more years to 2040. So after that ICE vehicles can phase out of existance over the next 10 years.

        And they all base this on expected policy. Not technology or market forces. Given their track record and also looking at batterie cost curve projections I assume they will be 10 years behind and may even have to struggle for existance. Toyota is a lost cause.

        @PlutoniumKun

        You have a point about the dependance on China. However i doubt they will decide to fold. Because they do not bluff. It’s a not a fluke that they are invested in renewables and EVs. It’s a long term strategic plan. The don’t have the technology, infrastructure and patens for combustion engines. So they just leap frog to be market leaders in the next thing. Where the west is holding on to the technology of the past they will become world leaders in techologies relevant for the future. Most of the electric cars made and sold in the world today are chinese. That’s before the 10% quota starting this year. Or take alook at the electric bus fleet for an impression on seriousness:

        https://www.bloomberg.com/news/articles/2018-04-23/electric-buses-are-hurting-the-oil-industry

        There will be choke points that will possibly slow down the adaption. But I doubt they will be lethal. And it will certrainly not be the infrastructure. As Professor Volker Quaschning puts it: For me as an electrical engineer it’s a bit of an insult to say we won’t be able to build enough power sockets.

        Reply
      2. pat b

        “A billion plus Chinese flying all over hell’s half acre like Americans and Europeans do”

        China is building an enormous high speed rail network.

        https://en.wikipedia.org/wiki/High-speed_rail_in_China
        “s the country’s network of passenger-dedicated railways designed for speeds of 250–350 km/h (155–217 mph). It is the world’s longest high speed railway network[1] and is also the most extensively used.[2][3]

        By the end of 2018, HSR extended to 30 of the country’s 33 provincial-level administrative divisions and reached 29,000 km (18,000 mi) in total length, accounting for about two-thirds of the world’s high-speed rail tracks in commercial service.[4] The HSR building boom continues with the HSR network set to reach 38,000 km (24,000 mi) in 2025.”

        “The spread of high-speed rail has forced domestic airlines in China to slash airfare and cancel regional flights.[162] The impact of high-speed rail on air travel is most acute for intercity trips under 500 km (310 mi).[162] By the spring of 2011, commercial airline service had been completely halted on previously popular routes such as Wuhan-Nanjing, Wuhan-Nanchang, Xi’an-Zhengzhou and Chengdu-Chongqing.[162] Flights on routes over 1,500 km (930 mi) are generally unaffected.[162] As of October 2013, high-speed rail was carrying twice as many passengers each month as the country’s airlines.[160]”

        As china continues to build out the network and to build longer runs, this will become more popular.

        Reply
  3. PlutoniumKun

    Its not quite this simple, and I’m pretty sure the IEA (which has long shilled for the oil industry) knows it. Crude oil is broken down into largely fixed fractions (gasoline, diesel, kerosene, etc), which has created the problem for the oil industry that its not always easy to match the demand for each fraction with the supply. For example, a major driver for the adoption of diesel engines in Europe was a perceived shortage of the ‘gasoline’ fraction compared to diesel. While sold as an environmental benefit (which we now know it isn’t), it was to a large extend driven by a problem created by the European refining industry.

    Likewise, the current huge investment in plastics production is not being driven by plastics demand – its been driven by a surplus of wet gas and other fractions from the oil and gas fracking industry. The world is not short of materials for packaging bananas, its very much been driven by surplus capacity looking for a home.

    So the corollary of all this is that demand for crude oil is driven by whichever ‘fraction’ is most in demand and most profitable for the refiners. In many, if not most regions, this demand is driven by gasoline for private vehicles (although arguably in China its driven by demand for diesel for construction). All else flows from this. So if EV’s substantially take a chunk out of gasoline demand, this creates a big problem for the oil industry. In the short term they can ‘mix and match’ to maintain profitability from refineries. But in the longer term it would substantially reduce profit and raise the price of the other fractions as they cease to be a surplus product looking for a home.

    So if EV’s become a big deal, yes it is a very big problem for the oil industry and could well leave a lot of it unprofitable – not just exploration and production, but crucially refining too.

    Reply
    1. Yves Smith Post author

      You are still ignoring the math of the number of cars versus trucks and the much greater use by trucks, as well as his additional point, that most electricity produced for EVs still comes from fossil fuel sources.

      Reply
      1. PlutoniumKun

        There is no question but that it will take decades, even by a best case scenario, for EV’s to substantively replace most gasoline vehicles on the road, let along trucks, but from the specific perspective of the the industry, they don’t have to do this to destroy the existing economic model of the oil sector. It is very hard for the oil industry to reduce supply for all sorts of reasons, but mostly because its based on up front capital investment. Once the demand curve for the major driving fractions (as I said above, usually gasoline) goes down, then thats the end of new investment in refineries and production. Oil will cease to be profitable for anyone but the Saudis and Kuwaitis (who have by far the lowest costs).

        As for diesel use in trucking and other uses, its substantial, but still small relative to gasoline use. In the US the ratio is 55% for gasoline (almost all for private cars) and 22% for distillates (which includes diesel for trucking and construction as well as power generation and shipping). The situation differs from region to region, but as I said in nearly all regions except maybe China private car use is the major driver behind oil use. Trucking is secondary.

        I didn’t address the issue of fossil fuel use for electricity as oil is a very small component of this – by far the most important fossil fuels in electricity generation are coal and methane, so from the point of view of the oil industry, this doesn’t help them much (except insofar as oil and gas production tends to be intertwined for obvious reasons). The impact of EV’s on CO2 emissions is complicated and entirely dependent on the local electricity fuel mix, but pretty much every study I’ve seen which hasn’t been contaminated with fossil fuel industry money indicates that it wouldn’t be a huge driver of extra fossil fuel use, mostly because the extra capacity can be most cost effectively be taken up with renewables and better management of existing grids. In small grids (such as here in Ireland), its anticipated that it would not increase fossil fuel use in power plants, as it allows better load management as most cars charge at night when there is a wind/hydro surplus (the key issue is stopping people charging their cars during evening peak demand times).

        I certainly would not question that EV’s are not going to make a huge difference over the next few years. But the economic drivers behind oil expansion are much more complicated that the article implies, and the pressures (as far as the oil industry are concerned) mostly seems to be very much on the down-side for demand.

        Reply
        1. Philipp

          Well put.

          Yes, the next few years are not going to make a huge difference in terms of actual oil replacement. But they will in terms of outlook. If EVs continue to grow at current rates that will change alot of investments. And when looking at what is announced for the next 3-5 years I don’t see the trend reversing.

          Reply
        2. Keith Newman

          Interesting link re EV charging and the use of renewables. I’m a little skeptical though of your conclusion regarding the vulnerability of the oil industry to a gradual change in motor fuel demand. It seems to me refiners can vary the content of the other fractions they produce, meaning parts of what today is put into the motor fuel fraction could be diverted to jet fuel, etc. In addition more oil could be shifted toward petrochemical production.

          Reply
          1. PlutoniumKun

            Yes, there is a certain amount of leeway in refineries, although its beyond my pay scale to say how far they can stretch it. From what I know, its mostly just ‘at the margins’, there are limits to how far they can change the formulations.

            Reply
            1. Keith Newman

              I don’t know the extent of what can be done either. But I do know there is flexibility and given the magnitude of the investment involved (oil refineries cost billions) it would be pushed to the limit. There was a time, before I retired, that I could pick up the phone and find out very quickly. No more however.

              Reply
        3. notabanker

          Thanks for the links, appreciate it.

          Tax policy can change the tipping point here as well. Tax fossil fuel profits and capital investment dries up.

          Am I correct in concluding that at 255mt reduction in CO2 is circa 30% of what Germany alone produces today? Trying to get a sense of the scale of these reductions.

          Reply
        4. Wyoming

          There is no question but that it will take decades, even by a best case scenario, for EV’s to substantively replace most gasoline vehicles on the road, let along trucks, but from the specific perspective of the the industry, they don’t have to do this to destroy the existing economic model of the oil sector……

          There are so many holes in the argument that EV’s are going to save the world because… that we could spend all day reviewing them. But the above quote sums most of them up concisely. “..it will take decades..”

          We do NOT have decades. And all the EV and renewable solutions take decades. So they are not a solution. Period. Full stop. They are technologies which, hopefully, will allow the survivors of this train wreck (ha ha) to crawl their way back up the civilizational totem pole. Very valuable and utterly necessary. But they will not salvage the American way of life (nor any of the other rich folks around the world). This are the facts and those laws of physics everyone is so enamored of, when applied to the situation, bring us to that conclusion as research papers from climate scientists and experts in agriculture, oceans and ecosystems show us every day.

          The bottom line is that our global population coupled with any known or likely level of technology is incapable of reducing our global impact on the Earth to anywhere near a sustainable level of ecological and climate damage. Don’t forget that the carbon emissions of the average African, which are a small fraction of the EV loving jetting off on vacation middle class rich folks, are far above a sustainable level….and no one reading this is prepared to live down at their level I would bet all I have on.

          There is no possible solution to this climate-carrying capacity problem which does not have as its critical path step a huge reduction in global population. Until we recognize this and act on it all the other required steps only serve to salve the burns so they don’t hurt so much (thus the religious fascination with the con man Musk) while we play the music and arrange the chairs on our personal Titanic.

          I’m so cheerful before my second cup of coffee.

          Reply
        5. Ignacio

          I certainly would not question that EV’s are not going to make a huge difference over the next few years. But the economic drivers behind oil expansion are much more complicated that the article implies, and the pressures (as far as the oil industry are concerned) mostly seems to be very much on the down-side for demand.

          I was going to write something in the same line of thinking. I have quoted this but I agree very much with your, and Philipp’s explanations on the oil industry. In fact, what called my attention about this article is the insistence of the author saying that it is not cars! it is not cars! Of course, Fatih Birol knows better and I interpret his insistence as fear. Fear that the industry is watching the tipping point and the beginning of the decline in the main driver of oil consumption which clearly is road transportation as Philipp has commented.

          And I believe the concerns are about policies and behaviours that migth accelerate the transition are starting to produce fear in the industry. Yes, airplanes consume a lot, but when refineries start accumulating gasoline and diesel that do not find demand, it will result in less jet-fuel available. Fligth prices will increase and simply less people will be able to afford flying so often. Demand will drop and it could be dramatic.

          My opinion is that this article express fear with the guise of strength.

          Reply
      2. Steve R.

        In light of that math, wouldn’t part of the long-term solution be EV cars and trucks combined with renewable energy production?

        It seems silly to criticize EV as a fool’s errand. A better mantra might be “EVs won’t save us until large-scale renewable energy production is achieved.”

        Is there something I’m missing?

        Reply
        1. Philipp

          People may say that our mode of individual transport is not sustainable if applied to the whole of humanity. And that we need something else. And there may be something to it. But the point is that if we stick with combustion engines we will with a 100% certainty not be able to reduce emissions to zero. With EVs it’s very possible.

          Reply
      3. pat b

        “You are still ignoring the math of the number of cars versus trucks and the much greater use by trucks, as well as his additional point, that most electricity produced for EVs still comes from fossil fuel sources.”

        In town trucks are likely to swap to EV right away.
        The cost per mile of Electric will force that shift.

        And in 2 years, most electricity will be from Green sources.

        Reply
  4. The Rev Kev

    May I put forward the opinion of just what exactly electric vehicles represent? And that is the denial of a future in which the personal car is not front and center of our society. I would hate to think how people in the United States would react if told that ‘driving season’ is now over for good and will never come again. A lot of people lost it back in the 70s when there was gas rationing in gas stations going by the news stories coming out back then.
    All the untold billions being put into electrical vehicles and vehicles which will drive themselves are, in my opinion, trying to assuage a feeling of dread that personal cars will one day be gone. Yes, other transport sectors use even more energy such as trucks but trucks are not part of modern culture to the point of becoming part of our cultural identity. Car related events are embedded as the milestones of our personal lives and the thought of this one day all going away I think freaks people out on a subliminal level.

    Reply
    1. Larry

      Agreed. Imagine a return to the past where street cars and pedestrians dominate city streets, and not motor vehicles. Our built environment is completely centered on the automobile. Something very dramatic will have to occur to undo this decades old policy choice of making way for the personal vehicle.

      Reply
      1. JTMcPhee

        “Something very dramatic willhave to occur” – maybe Jackpot?

        By the way, has anyone copyrighted or otherwise IP’d “Jackpot” yet?

        I recall a couple of SciFi stories from the ‘60s or ‘70s. One was based on the exploits of a highway patrolman and his female sidekick, whose patrol vehicle was a gas-turbine-powered thing the size of a full semi-tractor-trailer combination. They needed this vehicle to keep up with and chase down errant drivers of the millions of similarly sized personal vehicles that zoomed across a landscape that was mostly concrete “highway,” covering a much larger fraction of the country than today. Talk about the petro and auto industries’ wettest of wet dreams, completely oblivious to Jackpotting and assuming away all the “negative externalities.”

        The other was i recall titled “Catalyst Run,” and described the race between an older “analog” truck driver and an upstart challenger for the title of “fastest with the mostest” from loading dock to loading dock. No AI-driven vehicles, but the drivers, for the sake of meeting their metrics, were wired into the truck controls and the then rudimentary data sources on weather and road conditions, all to get the sh!t in the supply chains from one set of manufacturers and importers to a distant consumer distribution space. The old guy, the analog driver, cheated, and had an “enhancement” installed on his rig and himself, that let him make “freaky corrections” to brakes and wheels and thus pass, in the last critical mile, the young upstart and swoosh into the truck lot in the lead. But he didn’t drive up to the loading dock, and therefore lost the race, the metric-driven race, because the strain the “innovation” placed on him had killed him.

        Lots of moral tales out there in the realm of speculative fiction…

        Reply
        1. drumlin woodchuckles

          Since William Gibson wrote the word Jackpot into his novel in this particular meaning and usage, he could claim copyright on the word if anyone could. But since he is a writer, he might want the word Jackpot to spread around faster without the ball-and-chain of copyright holding it back.

          Maybe if copyright-squatters tried to copyright the word Jackpot in this particular use, he might even assist the fight against them.

          Reply
        2. pat b

          If I recall the young guy was driving a truck with an Automatic Transmission, so he could focus
          on steering and road strategy and should have had an advantage on the old guy.

          The ‘Old Guy’ won the race because even though he had failed to park at the dock,
          the contest rules gave him the win under the “Inability to complete due to medical issues”

          Reply
      2. Joe Well

        Here in New England, our local-level built environment isn’t quite so dedicated to the automobile, and I don’t have trouble imagining electric trains running down the middle of today’s highways.

        How much of the world is really in thrall to automobiles? Is there any way of quantifying this?

        Reply
        1. polecat

          People generally, are attracted to autonomy … to the ‘unencumberence’ by others’, where being in (generaly single occupancy), and having control of … an automobile type conveyance, whether gas/diesel powered, or electric .. is of prime importance. If the idea is to switch back towards eariler mass-transit modes (trains, lightrail, trolleys), then such transportation will have to be considered as efficacious ( going everywhere, including the necessary connections, up to the last mile of destination) AND (this is important ! ..) SAFE … Not as in structurally so, but from a human behavioral standpoint ! Nobody want’s to be hassled or feel endangered whilst as a passenger .. so there’ll have to be standards conveyed, and applied, where behavior is concerned .. to keep the system, or multiples thereof, running smoothly.

          Reply
  5. Linden S.

    I am reading Getting There: https://www.press.uchicago.edu/ucp/books/book/chicago/G/bo3626177.html based on a recommendation from several NC commenters. It is dry, but very informative. Transportation history over the last 150 years has just boiled down to who is the most cutthroat, and that seems like a good guess for the next 30 years. I am guessing that ICE cars are here to stay until states/nations put an explicit horizon on their last sell-by year. Cars as a whole are here to stay until cities/states/nations build out new complete public transit options. Hard to imagine the U.S. doing like that in anything like the near future. Every aspect of cars just makes corporations too much money.

    Reply
    1. Philipp

      If somebody is able to offers a better product for an equal or lesser price it does not matter how cutthroat the competition is unless it’s literal. And EVs are a better products in pretty much every aspect except for pricing at the moment. And that comes down in effect to the batteries. Everything else about them is easier and cheaper to build. Now have a look at the batteries cost curve.

      Reply
  6. jfleni

    The problem is the car industry screaming “Just get another “s##tbox bubba”
    and your troubles are over; HOGWASH, only mass PUBLIC transit works, as Chicago,Bart,HongKong, and a thousand other places perfectly well know; melt
    down all the gas buggies and see the difference.

    Reply
  7. a different chris

    >You are still ignoring the math of the number of cars versus trucks

    Yes, and nobody knows the answer to this, but also don’t ignore the usage/ownership patterns of trucks vs. cars. People will keep a car a year or two longer to avoid the dealership reaming. People change jobs, change routes. Truck fleets work entirely differently. They have relatively fixed routes, they have fixed downtime, they have spreadsheets on top of spreadsheets on top of…. They aren’t owned by “people” in the Dad and Mom sense, they are owned by businesses.

    It’s an apples to oranges, and unlike that third fruit (kumquat?), planes, it’s pretty easy to electrify a truck. But way hard to work your way past all those spreadsheets when you need a buyer, as they know what they know and some old dogs are hard to teach new tricks. Like I said nobody knows how that is going to work out, but they just aren’t the same.

    Anyway, what about the black-cloud belching ships? We have a lot of problems….

    And a not-unrelated good point:

    >a future in which the personal car is not front and center of our society.

    The future is trucks, not cars. If your specialty is building a highway vehicle, that’s where the profits will be.

    Reply
    1. drumlin woodchuckles

      Abolish Free Trade and retire 90% of those black-cloud belching ships from service, and 90% of the black-cloud-belching ship problem is solved. IF we can abolish Free Trade FIRST.

      Reply
  8. Gregory Etchason

    I want to know where all the lithium will come from for 125 million EVs by 2026.
    I read the 400,000 Tesla model 3 will consume 25% of annual Global lithium supply. Solid state batteries are a decade away. I think the EV phenom is way ahead of itself. For the next 10 years it will be resource restricted.

    Reply
    1. Odysseus

      Extracting lithium from seawater is technically feasible today but not market competitive. (About 10x current market price). If and when the price of lithium rises to that level, there will be a vast expansion of supply.

      There are other rare earths that are real problems, but lithium itself is not one of them.

      Reply
  9. David in Santa Cruz

    Really good comments above!

    Right now, EV’s are simply a way of “consuming our way to safety” — as if that’s going to work. Just another way for an industry based on planned obsolescence to say, “What’s it gonna take to get you to drive home in a new Hudson today?

    The manufacturing and distribution impacts of EV’s are probably currently worse than ICE cars, even before you take into account that EV’s are intensive in the use of minerals mined in conflict regions by slave and child (and child-slave) labor.

    One also has to wonder if the electrical infrastructure is up to the task — in Northern California the next PG&E bankruptcy may be directly related to fires, but much of the finance shenanigans in the company are related to purchasing electricity generated by burning fossil fuels (particularly natural gas extracted hydraulically) and to stripping rural maintenance in order to supply additional power to virtue-signaling urban consumers who have added EV chargers to their electrical loads.

    Reply
  10. Joe Well

    I’ve been using the local bikeshare here this freezing cold January, and it’s been great. I had had a psychological barrier to cycling because of the cold and road conditions but I’m hooked now that Ive started. Cycling is usually faster than driving because of parking+more flexibility in traffic. The danger from cars is my main worry.

    If we could ban cars from most city streets, we would solve so many transportation problems and improve quality of life greatly. Of course, we don’t live in that political moment right now, but my point is we don’t need electric cars to radically reduce carbon usage and still have better quality of life.

    Reply
  11. farmboy

    farmboy says, please see https://gumroad.com/l/OilFall Electricity is the New Oil, for an in depth look at the best described current state. He begins with the observation that change begins in the margins, which is worth pondering for numerous reasons and extends his capable analysis from there. RPS (renewable portfolios standards) work, car companies are going electric, China is converting, etc. 105 pages and worth the 9bucks

    Reply
  12. Steven

    This post has quite a few flaws, many of which others have already noted. So I’ll try not to repeat:
    “EVs are not the ultimate solution to the climate change problem because most of the electricity used to charge the vehicles comes from fossil fuels, Birol added.”
    • I suspect this assertion is incorrect. For the past 8 years I’ve been charging my EVs from roof-top solar panels. Most of the people I know with EVs also have home solar.
    • If one had to choose, the priority should probably be transitioning to renewable energy sources. Even renewables are not a panacea. Barring the development of nuclear fusion, the world’s sustainable energy budget is probably limited to that provided by our sun, the only presently safe nuclear reactor.
    Opinions on this issue are probably grounded in one’s personal experience. It must be difficult for someone with access to a good mass transit system to understand the appeal of and need for cars. The ultimate goal here ought to be the electrification of transportation in whatever form the world’s sustainable energy budget will permit. Using finite resources like fossil fuels– which have so many unpaid external costs* and so many more vital and possibly irreplaceable uses – for transportation was and is a mistake.

    *See Oil, Power and War by Matthieu Auzanneau

    P.S. But I repeat myself and many others. Naked Capitalism is one of the few sites with which I am familiar where reading the comments along with the postings is an absolute MUST. Thanks PlutoniumKun and all the rest of you!

    Reply
  13. Barry

    I’m afraid I don’t understand the point of this post. First, I don’t know anyone who claims electric cars will save us, that cars are the driver of oil demand, or that Elon Musk will save us — and I have several friends, colleagues and neighbors with EVs.

    Second, I don’t know what I’m supposed to do with the information that switching to EVs is insufficient to prevent global climate change. Given the tenor of posts and comments about Tesla in the last year, I half-expect someone to claim that Steven is GUILTY of owning an EV.

    It seems to me that if I stop driving my Subaru and switch to a Tesla 3, then I will have reduced my consumption of oil and my contribution to greenhouse gases by a significant and measurable amount. Isn’t that reason enough for a personal choice of modes of transportation?

    But further, if I buy an EV, won’t I be contributing in a concrete way to the social pressure for change? For the sense that there is demand, whether market-based or socio-politically, for an end to the old ways of doing business?

    These are thing within my personal power, measurable at personal scale, that I can make choices about. Why then do I need to assess whether EVs will save the world when making my choice?

    And as an aside, I feel like a missed an important post sometime back, even though I have been reading NC nearly every day for years. From whence comes the particular animus for Elon Musk among all the corporate CEOs in the worlds? Where was the strong analysis of risk or malfeasance that usually drives NC content (no need to bring up Musk’s asinine ‘funding secured’ tweet — the animus here predates that event).

    The drumbeat against Tesla here is so strong and so relentless that I often wonder whose book we’re talking.

    Reply
    1. pat b

      “It seems to me that if I stop driving my Subaru and switch to a Tesla 3, then I will have reduced my consumption of oil and my contribution to greenhouse gases by a significant and measurable amount. ”

      I was at a christmas party for the Electric Vehicle Association of DC.
      One of the attendees was a physical chemist.

      His comment was . “My Car fits into a 10x16x8 parking space. In a year it consumes enough gasoline to
      fill 10x16x7. Burnt into CO2, that is enough volume to fill the entire parking garage”…

      Somehow I think if every driver switched it would have a notable impact.

      China and Norway are leaders in transition, people in Shenzeng note how creepy it is with all the cars being electric. People in Norway note how clean the air is becoming in West Oslo.

      Others are paying attention.

      If your car is PV powered, you replace an array 2X the size of your parking spot and save all that CO2.
      That will matter.

      The average car emits 4.6 tons of CO2.. that’s as much CO2 as your car weighs. Over 10 years, that’s 10 cars worth of CO2. The shift will be something fabulous.

      Reply
  14. pat b

    Yves

    I have a huge amount of personal and professional respect for you. I have a lot of professional
    respect for Fatih Birol whom people speak well of. That said, I believe both of you are mistaken.

    I’d suggest you read some of the work of Tony Seba PhD
    https://tonyseba.com/portfolio-item/clean-disruption-of-energy-and-transportation/

    What’s happening in EVs is very synergistic to Green Energy and especially with autonomous vehicles.

    1) People with EVs like solar PV. That’s slashing into Fossil Electricity.
    2) EVs are much more tractable to autonomy and V2G.
    3) EVs are much cheaper to operate then ICE cars. 4 Cents vs 12 Cents.
    4) EVs are much cheaper to other parties. An EV can enter a basement parking garage and not stink it up. ICE cars smell up the building. Just on a pure pollution basis, underground garages will dramatically prefer EV cars.

    So Cities are banning Gas/Diesel cars/trucks. Underground garages will ban Gas cars.
    Plugged in EVs help buildings ride out electric surges. EVs are cheaper, which means short distance
    Uber/Lyft makes more sense with EVs. As Gas sales drop, gas stations will close, meaning Gas cars
    become less useful. Horses were everywhere and in 10 years, they vanished. The economic case collapsed.

    Mainframe computers were paid for and in 10 years they collapsed.

    This kind of disruption is hard to predict but you have to feel it happening.
    Manufacturers like EV because it’s 200 moving parts vs 2000. What they need is for battery to get cheaper.
    Well, battery is dropping 20%/year. Every 3 years it’s halfing. Same with PV. People love cheap PV
    and that’s going to get people charging at home and at work.

    Birol is like a New England whaling captain saying “Plenty of Whales” to sell,
    while Kerosene and cattle were coming up from behind very fast.

    Reply
    1. Yves Smith Post author

      Your arguments are not even remotely on point.

      The issue is that EVs will have very little impact on greenhouse gas emissions. That is due to the fact that:

      1. Their output pales compared to trucks

      2. Most electricity is produced from greenhouse gases. And plenty of people live in parts of the world where they will not generate enough solar to power a car reliably. So “assume solar power at home” is not happening now. 75% of electricity now comes from fossil fuels.

      3. The post points out that emissions from airplanes are a much bigger problem and are set to keep rising.

      Your point about mainframes is totally false. They are still the engines of all large volume transaction processing in the financial services industry: securities trading, banking and credit card transactions. You discredit yourself with that.

      Reply
      1. pat b

        Yves

        1) Electric trucks are happening fast. The Ops Cost and Lifecycle cost is lower and that will drive
        the MBAs to switch.

        2) Renewables are taking over Electric production. I’m not trying to be pedantic here, i’m trying to
        make a point. You said “75% of electricity comes from fossil fuels”.. according to the EIA in 2017
        https://www.eia.gov/tools/faqs/faq.php?id=427&t=3 it was 62.9%. 12% is a big deal to be off
        because fossil fuel consumption for electricity is declining. https://www.eia.gov/electricity/data/browser/#/topic/11?agg=2,0,1&fuel=vtvo&geo=g&sec=g&linechart=ELEC.STOCKS.COL-US-98.M~ELEC.STOCKS.PEL-US-98.M~ELEC.STOCKS.PC-US-98.M&columnchart=ELEC.STOCKS.COL-US-98.M&map=ELEC.STOCKS.COL-US-98.M&freq=M The general trend is declining.
        Even if you want to argue that it’s an offset against gas, https://www.eia.gov/electricity/data/browser/#/topic/2?agg=2,0,1&fuel=f&geo=g&sec=g&linechart=ELEC.CONS_TOT.COW-US-99.M~ELEC.CONS_TOT.NG-US-99.M~ELEC.CONS_TOT.PC-US-99.M~&columnchart=ELEC.CONS_TOT.COW-US-99.M&map=ELEC.CONS_TOT.COW-US-99.M&freq=M it’s a wash against petcoke.

        Yves, if you look at renewable electricity production it’s growing 8%/year
        https://www.irena.org/newsroom/pressreleases/2018/Apr/Global-Renewable-Generation-Continues-its-Strong-Growth-New-IRENA-Capacity-Data-Shows

        What’s driving that is the LCOE of green energy is lower then fossil energy.
        https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2018/
        Take a look at the executive summary. Wind is now cheaper then median gas.
        What that means is wind will be preferred. So what’s that going to do?
        It’s all about the cost…

        Birol doesn’t appreciate the synergies of Green Electricity and EVs…

        I really would suggest you read some of the Seba stuff.
        Or if you want, read some of Bloomberg New Energy.

        https://bnef.turtl.co/story/neo2018?teaser=true

        “ape the sector to 2050.

        Since the 1970s, fossil fuels have commanded a consistent 60-70% share of the global power generation mix. We think this 50-year equilibrium is coming to an end, as cheap renewable energy and batteries fundamentally remake electricity systems around the world.

        NEO 2018 sees $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050, with $8.4 trillion of that going to wind and solar and a further $1.5 trillion to other zero-carbon technologies such as hydro and nuclear.Cheap renewable energy and batteries fundamentally reshape the electricity system, as we shift from two-thirds fossil fuels in 2017, to two-thirds renewable energy in 2050.”

        or Listen to the Liebreich keynote in 2017
        https://about.bnef.com/blog/michael-liebreich-state-industry-keynote-bnef-emea-summit-2017/
        The keynote slides are quite good
        https://data.bloomberglp.com/professional/sites/24/2017/09/BNEF-Summit-London-2017-Michael-Liebreich-State-of-the-Industry.pdf

        Take a look at Slide 49 or slide 52

        or slide 62 https://data.bloomberglp.com/professional/sites/24/2017/09/BNEF-Summit-London-2017-Michael-Liebreich-State-of-the-Industry.pdf where the IEA blew all the wind forecasts

        Slide 70 is the same on the PV side.

        Reply
        1. Yves Smith Post author

          Wind production increases will stall out due to resource constraints on materials needed to make them. Ditto hybrid and electric cars:

          http://www.rsc.org/images/endangered%20elements%20-%20critical%20thinking_tcm18-196054.pdf

          As UserFriendly put it:

          Tell me again how we are going to power the world on Wind and PV when we are already practically out of some of the elements required to make them? And no, these aren’t the ones found on the seafloor and aren’t as easily pulled out of the water like Uranium.

          Reply
          1. pat b

            From your cite

            ” Rare earths used in
            magnets and electronics
            are not scarce, but are
            difficult to separate and
            purify
             ,,,,
             Recycling and
            alternative sources are
            being explored, but they
            may not arrive quickly
            enough to plug the short
            term demand gap”

            The issue on Rare Earth Elements is one of production/refining not absolute scarcity.
            I’d say, that there will be investment in mines and smelters and improved processes.

            I hate to sound utopian but when there are trillions to be made, the number of
            clever people who want that will be there.

            There was once a shortage of oil, but, improved efficiency of production and reduced consumption by users balanced things out.

            I’d suggest the correct measure would be not “What elements are available for
            EVs based upon someones guess on demand” but rather What are the costs of
            end use components by performance metric.. If you look at PV on a $/Watt
            and $/KWH or EVs based upon $/Watt and $/KWH and Wind on a $/Watt and $/KWH
            basis, you will see the trends are unmistakable.

            If you saw growth of demand and $/Unit rising, that would argue we face rising cost factors but across the board it’s declining cost.

            For 15 years people have been telling me the costs are going to rise and they decrease.

            Even if Silicon prices rise, we would just change to CIGS…

            People have been claiming that Lithium is exhausted

            https://twitter.com/AukeHoekstra/status/1084458433292746752
            but as Hoekstra notes, there are lots of projects coming in
            to bring in more lithium

            Reply
  15. pat b

    “You are still ignoring the math of the number of cars versus trucks and the much greater use by trucks, as well as his additional point, that most electricity produced for EVs still comes from fossil fuel sources.”

    In town trucks are likely to swap to EV right away.
    The cost per mile of Electric will force that shift.

    And in 2 years, most electricity will be from Green sources.
    https://twitter.com/MLiebreich/status/1075884900325167107

    Yves, 42 years of data tells us Solar will get cheaper…

    Reply

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