… But it’s a destination without a route. That’s the headline for my latest in The Conversation.
- Comment
- Reblog
-
Subscribe
Subscribed
Already have a WordPress.com account? Log in now.
… But it’s a destination without a route. That’s the headline for my latest in The Conversation.
John Quiggin 
JQ writes: “2050 is a long way off, but motor vehicles are long-lived pieces of capital equipment. If we’re going to replace 90% of the existing fleet with electric vehicles, we must start now.”
I’d suggest energy/fuel prices and availability have a critical effect on the ongoing viability/cost-effectiveness of ICEV technologies.
In March 2013, the Berlin-based Energy Watch Group (EWG) published a report by Dr. Werner Zittel et. al. titled Fossil and Nuclear Fuels – the Supply Outlook.
Figure 6: World oil supply from individual countries, on page 26, shows world oil production by individual countries and regions arranged according to the year of their peak production, from the calendar year 1900 through to 2012, including crude oil, condensate, natural gas liquids (NGL), heavy oil and tar sands. Figure 6 shows, as at end-2012:
• Many countries listed were past peak production, including Australia (peaking in 2000);
• Some were listed as being at peak production, including Saudi Arabia (from 2010), UAE (2011), Kuwait (2011), Qatar (2011), and Russia (2011); and
• A few countries and regions were considered still at pre-peak production, including China, Brazil, Iraq, Thailand, Sudan, Pakistan, Kazakhstan, Azerbaijan, Heavy oil from Canada and Venezuela, and tight oil from North Dakota and Texas.
Click to access EWG-update2013_long_18_03_2013up1.pdf
Since the 2013 EWG report was published:
• China’s oil production peaked in 2015 – see Fig 23 at: crudeoilpeak.info/china-increased-oil-imports-in-covid-stricken-2020-by-a-lucky-8-8
• Thailand’s oil production peaked in 2016 – see Fig 1 at: crudeoilpeak.info/asia-pacific-peak-oil-2020-production-continued-decline-at-2-7-pa
• South Sudan is experiencing a rapid decline in oil output – see: http://www.reuters.com/business/energy/south-sudan-oil-output-declines-fields-reach-peak-2021-07-02/
• Venezuela’s oil production peaked in 2015 – see Fig 1 at: crudeoilpeak.info/peak-oil-in-south-central-america
• Saudi Arabia’s (and the world’s) largest oil producing field, Ghawar, has been in decline since about 2009 – see Fig 12 at: crudeoilpeak.info/the-attacks-on-abqaiq-and-peak-oil-in-ghawar
Globally, almost all incremental oil supply growth since 2011 was from the United States.
twitter.com/aeberman12/status/1361429207860002826
Almost all US oil supply growth since 2008 was from ‘unconventional’ tight oil.
twitter.com/aeberman12/status/1359950289068052490
Since the COVID pandemic, only the US tight oil Permian play production is now increasing. Other tight oil plays are flat or declining.
twitter.com/aeberman12/status/1453714837830348804
Few of these US oil and gas plays have actually provided ANY cash flow – they’ve mainly lost billions of dollars for investors. Is it any wonder investors are wary of putting more money into these ‘capital destroying sinks’?
https://www.desmog.com/2021/07/16/us-shale-revolution-no-fracking-investment/
Fewer pre-peak oil producing countries must continue increasing production to compensate for declining production from many post-peak oil producers, or overall global production declines. It seems the world is steadily running out of pre-peak oil producing countries/regions.
Published in the Oil & Gas Journal on Oct 29 was a post titled Morgan Stanley: Global oil supply likely to peak earlier than demand, which quotes some of a recent Morgan Stanley research note (bold text my emphasis):
https://www.ogj.com/general-interest/economics-markets/article/14213072/morgan-stanley-global-oil-supply-likely-to-peak-earlier-than-demand
If a sharp decline in global oil supply occurs in the next few years, as Morgan Stanley suggests could happen if certain circumstances arise, then how well prepared is Australia for this possibility?
I’d suggest Australia needs to be replacing the existing fleet of ICEVs with BEVs as quickly as possible.
The route is the same as Homer Simpson’s plan for passing an exam: hide under some coats and hope that somehow everything will work out
I think 90% by 2050 is hopelessly conservative. Tony Seba reckons it will be all but over by 2030 and I believe him – he has been uncannily correct in his predictions so far, since 2012 or so.
There are a bunch of factors that will drive a fairly quick change over. Around 2025 or so Ev’s will be fairly common – maybe 15% and growing fast. People in the market for a new car around this time are going to see the writing on the wall and either bite the bullet and pay extra for an EV, or wait a couple of years and just live with their older car for a while longer as they see the price of EV’s dropping. Many will NOT ever buy another ICE car as they know that by the time their new ICE car is 5 years old ( 2030 ) it will be virtually worthless. New ICE cars bought between 2025 and 2030 will NOT have a 20 year life span – they will be junked well before that due to ubiquitous cheap or free fuel and lower servicing costs.
In short, ICE car sales will likely start collapsing between 2025 and 2030 ( it is sort of happening now actually ). Fuel and mechanical servicing will get harder to find and thus more expensive. All a virtuous cycle of declining ICE and growing EV share.
Autonomous cars will also most likely be widely available before 2030 ( see Cruise San Francisco ) thus reducing demand for cars. More and more people will opt for Uber like services and hire a a vehicle for longer trips. These vehicles will be EV’s.
This will all happen with or without Government intervention.
Geoff Miell: Please do not repost entire documents of 178 pages!
On EVs. Morrison’s cargo cult “policy” will work in the sense that the rest of the world will eventually supply cheap and good EVs to Australia, and ICEVS will die from market forces. But the same free market will ensure that Australia will be at the back of the queue. EVs are supply constrained. You are a midsize EV manufacturer like Hyundai, deciding whether to supply Australia or the Netherlands, markets of similar size. The latter has a 30% EV market share in new cars; it’s densely populated and compact, so range anxiety is low; the government has extensive EV incentives in place; EVs a re already a familiar sight;and there is already a pretty good highway fast charging network, The fixed costs of market entry (dealer network, advertising, regulatory approvals) are pretty similar and quite high. This is surely an easy call. You go for the Netherlands until the EV market share hits 90% as in Norway. Australia will get its EVs about the same time as Mongolia.
Joe Blow: – “Many will NOT ever buy another ICE car as they know that by the time their new ICE car is 5 years old ( 2030 ) it will be virtually worthless.”
If Morgan Stanley is correct about a sharp decline in global oil production beginning after 2024, then it’s game over for ICEVs, and ICEVs will devalue towards scrap prices.
UK EV inquiries soared during the recent fuel crisis.
https://www.theguardian.com/environment/2021/sep/27/uk-electric-car-inquiries-soar-fuel-supply-crisis
IMO, new ICEVs are already becoming undesirable as petroleum fuel prices continue to rise above $1.50 per litre (here in Australia), increasing the operating cost gap between between ICEVs & BEVs. Some pundits suggest regular unleaded petrol in Australia could get to $2 per litre by Christmas 2021 and possibly $3 by late-2022. That would be a very big incentive to switch to BEVs, despite the current higher capital cost of BEVs. The big problem I see presently is a limited choice/variety of affordable BEVs here in Australia.
JB: – “In short, ICE car sales will likely start collapsing between 2025 and 2030 ( it is sort of happening now actually ).”
I’d suggest it’s beginning to happen now. The problem I see is whether the ramp-up of BEV production can sufficiently mitigate the inevitable sharp decline in global oil production, to avoid a global energy crisis. It’s all a question of timing now.
The critical fuel is diesel – high diesel fuel prices will increase the prices of essentially everything, until heavy transport transitions away from its dependency on petroleum fuels.
2050 is the Never Never. Neoliberals set goals for 2050 when they intend to do nothing. Of course, neoliberals intend to do nothing all the time but when they have to pretend they are going to do something they set Never Never goals for 2050. The Chinese set long term goals too but the difference is they have five year plans to get there. When you intend to do something you create 5 years plans and set interim 5 year goals.
I’m noticing USA’s, Australia’s and even the EU’s inability to change. On current indicators, the West will fail to change. Under neoliberal capitalism, which it is completely failing throw off, the West will fail to change. Everything will continue on a trajectory of decay and collapse. Without radical political system change there can be no real economy change, not of the kind that would save the planet.
JW – ..deciding whether to supply Australia or the Netherlands, markets of similar size. The latter has a 30% EV market share in new cars; it’s densely populated and compact, so range anxiety is low;
Market size on population… number of cars?? Australia is the larger.
Densely populated? Urban population density for the two is similar. Extra urban driving? Both are situated on largish continents… The difference is in the size and scope of their citizens’ demands and their governments’ responsiveness ie., not the actual landscape but the political landscape.
A post at OilPrice.com by Tsvetana Paraskova on Nov 12 headlined Options Traders Are Betting On $300 Oil, includes:
https://oilprice.com/Energy/Crude-Oil/Options-Traders-Are-Betting-On-300-Oil.html
Rapidly rising petroleum fuel prices and possibly emerging supply shortages/rationing will do the trick of collapsing ICEV sales, perhaps as early as next year.
JQ you have buried in your article again, perhaps unseen by yourself, a lack of clear sighted proper accounting for population growth and sky-high immigration rates, and in the context of the subject, car sales, the particular effects of the average permanent immigrant age demographic, its older age relative to residents, and similar for “temporary” immigrants.
Why have new car sales numbers increased over time? Why mostly would the number of cars keep growing? Why would the task of decarbonising the fleet be even harder? These effects are largely due to the simple arithmetic of exponential population growth raised by the power of stupendous immigration rates.
No. With sensible, lowered long term sustainable immigration rates everything, including this, is easier. A big majority of Australians want it easier, but mainstream economics says ‘no’. Why are economists wedded to bau when it clearly in near all cases is the problem and creates yet more problems? Chickens and eggs. Is it bau that causes so many actual problems, or is it economists in general?
“… the particular effects of the average permanent immigrant age demographic, its older age relative to residents, and similar for “temporary” immigrants.”
Also importantly included here should be the fact of the across the board much lower incomes of immigrants relative to residents, and the consequent effects of car prices relative to immigrant lower disposable incomes and amount of remittances made overseas.
My expectation would be that old cars mostly stand arround and new electric cars will be used by people who drive a lot – fuel should be a lot cheaper, even more so with an apropiate taxation strategy of both fuels. If that is true, the time lag between a ban on new sales and the disapearance of old ones will be far less dramatic.
hix: – “…fuel should be a lot cheaper, even more so with an apropiate taxation strategy of both fuels.”
Humanity has exhausted most of the cheap-to-extract oil. The costs to extract the remaining global
oil reserves are increasingly more expensive. The era of cheap oil is now over. Either oil prices stay
high, or oil producers go broke.