BP Foresees Decreased Oil Demand due to Autonomous EVs
All eyes are on oil demand forecasts, as businesses worldwide turn to sustainable energy solutions to fuel growth. BP, a leading London-based oil and gas company, carefully tracks such trends, via annual energy outlook reports.
The establishment recently published its 2018 Energy Outlook, which includes forecasts surrounding the effects of EVs and driverless cars on global oil consumption. The report cited numerous concerns, such as regulations for EVs and gas-powered cars, as well as savings associated with operating large-scale fleets of self-driving EVs.
Increased Usage, Lower Costs
BP highlighted several factors supporting the slow fall of oil demand over the next two decades. According to the report's timeline, self-driving cars will likely proliferate on a commercial level, in the coming years.
But due to high costing concerns associated with new technology, BP researchers expect businesses offering mobility services to lead adoption. This expectation is not good for oil producers, as such companies would require fleets of driverless vehicles to power their services.
Additionally, the combination of EVs and autonomous cars could be even more devastating for petrol producers. In the report, BP acknowledged that EVs will be utilized roughly 2.5 times more than gas-powered cars, due to decreased maintenance costs.
The phase-out of human drivers, in exchange for driverless platforms, could also bump down mobility expenses for customers. Such low-cost incentives may serve as a catalyst for people to use autonomous mobility services.
"In the ET scenario, there are nearly 190 million electric cars by 2035, higher than the base case in last year's Outlook of 100 million. The stock of electric cars is projected to increase by a further 130 million in the subsequent five years, reaching around 320 million cars by 2040," said BP analysts.
Taking all of the factors above into consideration, BP predicts peak oil demand to occur between 2030 and 2040. From its peak, oil demand is forecasted to decrease by 110 million bpd.
Down, But Not Out
The impact of EVs and autonomous cars may not completely phase out oil consumption in the long term. However, there will be an exchange of hands, when it comes to demand.
Businesses within the industrial sector (specifically petrochemical producers) still heavily depend on oil to power large machines, trucks and tools. Such types of equipment may not have a battery-powered equivalent, including gas-powered drills and hydraulic sprayers.
"The suggestion that rapid growth in electric cars will cause oil demand to collapse just isn't supported by the basic numbers, even with really rapid growth," explained BP's Chief Economist Spencer Dale.
Another myth, which can easily be dunked, is that existing petrol brands, such as BP and Shell, and refineries will be replaced by solar farms and nuclear power in the near future. The reality is, many companies specializing in oil production are quietly engaging in sustainable energy-related projects.
Both BP and Shell have made significant changes to their traditional fuel offerings. The companies have invested in EV charging hubs, which will be installed in various gas stations across Europe.
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