Does the rise of electric vehicles mean we’ve passed peak oil?

Electric cars charge on a London street in 2015. Image: Getty.

When will cars powered by gas-guzzling internal combustion engines become obsolete? Not as soon as it seems, even with the latest automotive news out of Europe.

First, Volvo announced it would begin to phase out the production of cars that run solely on gasoline or diesel by 2019 by only releasing new models that are electric or plug-in hybrids. Then, France and the U.K. declared they would ban sales of gas and diesel-powered cars by 2040. Underscoring this trend is data from Norway, as electric models amounted to 42 per cent of Norwegian new car sales in June.

European demand for oil to propel its passenger vehicles has been falling for years. Many experts expect a sharper decline in the years ahead as the shift toward electric vehicles spreads across the world. And that raises questions about whether surging electric vehicle sales will ultimately cause the global oil market, which has grown on average by 1 to 2 per cent a year for decades and now totals 96m barrels per day, to decline after hitting a ceiling.

Energy experts call this concept “peak oil demand”. We are debating when and if this will occur.

A forecast with caveats

The International Energy Agency (IEA), which represents 29 oil-importing industrial countries, produces bellwether forecasts that foresee electric cars phasing in slowly. Its baseline projection envisions 150mielectric vehicles on the world’s roads by 2030, or about 10 per cent of all passenger vehicles at that point. In comparison, only 2m electric vehicles are operating today – 0.2 per cent of the 1.2bn on the road. The IEA estimates this shift will save nearly 2m barrels per day of oil, relative to its business-as-usual projection of the world using at least 70m barrels of oil per day for transportation by 2040. That consumption level would mark a 30 per cent increase from roughly 54m barrels now.

If electric vehicles sales grow faster than the IEA expects, that projection might miss the mark. Should that happen, would global oil demand flatten or decline?

Our research at the Institute of Transportation Studies at the University of California, Davis shows that encouraging electric vehicle purchases is just one way policymakers can help phase out oil consumption – one key to reducing the greenhouse gas emissions that stoke climate change and health-threatening pollution.

Given the dominance of internal combustion engine passenger vehicles, which include cars, SUVs and light trucks, replacing them all with electric models will take decades. Automobiles are durable goods that typically remain on the road for 10 to 15 years. Not all drivers will buy a new car, let alone an electric one, soon.

In other words, even if (hypothetically) all new car sales were to instantly turn electric, it would likely be sometime after 2030 before gasoline cars would disappear. Besides, passenger vehicles consume only about 26 per cent of the oil used worldwide. Given these stubborn realities and the fact that electric vehicles still represent a tiny portion of new-car sales, reaching a peak in oil demand by 2040 would require more than widespread conversion to electric-powered cars.

But together with other trends taking shape, electric vehicle growth could potentially revolutionise transportation enough for oil consumption to stop growing within this time frame.


Ride-sharing and oil

Even if all of Europe mandated that only plug-in vehicles could be sold, starting in 2030, and China followed suit by 2035, that wouldn’t bring about peak oil demand by 2040. According to our research, global oil consumption would keep growing until as late as 2050, in part because so many cars and trucks running on gasoline and diesel – especially in developing countries – will remain in use.

To see if oil demand could still peak by the middle of this century, if not sooner, we recently began preliminary research modeling the effect of urban sustainability policies on oil demand in the future. This is an important area of analysis since U.S. mayors and municipal leaders from around the world reaffirmed their commitment to climate-change action after President Donald Trump decided to back out of the Paris climate accord.

Using a set of scenarios regarding potential technological and policy interventions in work we will publish soon, we modeled different future oil market demand conditions. We focused on four major trend lines: vehicle electrification, ride-sharing services like Uber and Lyft, more sustainable freight that runs on alternative fuels or reduces vehicle miles traveled through computer-assisted optimisation, and urban car-free zones.

We found that making more car-free pedestrian areas in big cities would make a huge dent in global oil demand. This practice – already common in cities like Copenhagen and Madrid in Europe and Chendu, China – could make oil demand max out by 2030, as long as enough governments aggressively encouraged drivers to switch to electric cars and mandated more fuel efficiency for road-based freight.

Trucks don’t last as long as cars, and many countries are considering policies to encourage the use of natural gas, hydrogen or electric vehicles for heavy-duty trucking.

Commercial ride-sharing might also pare oil demand by reducing the number of miles driven overall if it encourages carpooling. This industry could, in addition, hasten the shift to electric vehicle dominance if – as widely reported – it begins to rely on a fleet of autonomous (driverless) vehicles, which would predominantly be electric.

But ride-sharing could fail to reduce fuel demand in the short term if people wind up taking more trips and traveling more miles in passenger cars and relying less on the bus, transit or city train than they used to. Some research suggests that could be happening. For example, scholars at University of California, Berkeley found that a third of the riders they surveyed in San Francisco used these services instead of public transportation – not to replace trips in taxis or their own cars.

In short, there is no guarantee that more ride-sharing means we’ll burn less oil.

What cities can do

In another study, our team at UC Davis teamed up with the Institute for Transportation and Development Policy, an independent global nonprofit, and modeled three urban transportation policy scenarios. We found that global new vehicle sales in 2040 will total between 600m, if ride-sharing and transit flourish, and 2.1bn vehicles, should the ride-sharing industry stall – a huge difference.

Metropolitan policymakers can use other tools. Creating car-free zones, making parking expensive and levying congestion taxes and road usage fees are some examples.

Overall, we believe there is a reasonable chance global oil consumption will peak by 2040. Especially given the growing preference of city dwellers to live in places with less congestion and pollution, a shift away from cars with internal combustion engines – and from cars in general – looks not only likely but inevitable. It also seems fairly likely that any company betting on the continued growth of oil sales will be disappointed.

Goldman Sachs says the world could pass this milestone sooner. Researchers at the U.S. investment powerhouse predict that with widespread reliance on electric cars, slower economic growth and a decline in (largely petrochemical-based) plastic production, global oil demand could max out by 2030.

The ConversationHowever long it takes, shifting to electric vehicles might not make oil demand level off or decline on its own. But plug-in vehicles, combined with other policies, trends and technologies, will clearly take a toll.

Amy Myers Jaffe is executive director for energy & sustainability, and Lewis Fulton co-director of STEPS (Sustainable Transportation Energy Pathways), at the University of California, Davis.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Here’s how Henry Ford and IKEA could provide the key to solving the housing crisis

A flatpack house designed by architectural firm Rogers Stirk Harbour and Partners, on display at the Royal Academy, London, in 2013. Image: Getty.

For many people, the housing market is not a welcoming place. The rungs of the property ladder seem to get further and further out of reach. There are loud calls to build hundreds of thousands of new homes (and equally loud demands that they’re not built in anyone’s back yard).

If there was ever a time to introduce mass-produced affordable housing, surely that time is now.

The benefits of mass production have been well known since Henry Ford’s car factories made the Model T back in 1908. It was only made in one colour, black, for economic reasons. Not because it was the cheapest colour of paint, but because it was the colour that dried the quickest.

This allowed the production line to operate at faster, more cost effective, speeds. And ultimately, it meant the product could be sold at a more attractive cost to the customer.

This approach, where processes are tested to achieve increasingly efficient production costs, is yet to filter properly into the construction of houses. This makes sense in a way, as not everybody wants exactly the same type of house.

Historically, affordable mass-produced housing removed a large amount of customisations, to ensure final costs were controlled. But there is another way. Builders and architects have the ability to create housing that allows a level of flexibility and customisation, yet also achieves the goal of affordability.


Back in 2006, the “BoKlok” approach to affordable housing was launched to great acclaim in the UK. Literally translated from Swedish, the term means “live smart”. Originally created from a collaboration between flat-pack favourite IKEA and Swedish construction giant Skanska, the BoKlok housing approach was to allow for selected customisation to maximise individuality and choice for the customers. But at the same time, it ensured that larger house building components were duplicated or mass-produced, to bring down the overall costs.

Standard elements – wall panels, doors, windows – were made in large numbers to bring the elemental costs down. This approach ensured the costs were controlled from the initial sketch ideas through to the final design choices offered to the customers. The kitchens and bathrooms were designed to be flexible in terms of adding additional units. Draw and cupboard fronts interchangeable. Small options that provided flexibility, but did not impact on overall affordability.

It’s a simple approach that has worked very well. More than 10,000 BoKlok houses have now been built, mainly in Norway, Sweden and Denmark, with a small number in the UK.

But it is only part of the architectural equation. The affordable housing market is vital, but the cost of making these homes more adaptable is rarely considered.

Flexibility is key. The needs of a house’s inhabitants change. Families can grow (and shrink) and require more room, so the costs of moving house reappear. One clever response to this, in BoKlok homes, has been to allow “built in” flexibility.

Loft living

This flexibility could include a loft space that already has flooring and a built in cupboard on a lower floor which can be simply dismantled and replaced with a “flat-pack style” staircase that can be purchased and installed with minimal disruption to the existing fabric.

Weeks of builders removing walls, plastering and upheaval are replaced by a trip to the IKEA store to purchase the staircase and the booking of a subcontractor to fit it. The original design accounted for this “future option” and is built into the core of the house.

The best approach to new affordable housing should consider combinations of factors that look at design, materials and processes that have yet to be widely used in the affordable housing market.

And the construction sector needs to look over its shoulder at other market places – especially the one that Henry Ford dominated over a century ago. Today’s car manufacturers offer customised options in everything from colour to wheel size, interior gadgets to different kinds of headlamp. These options have all been accounted for in the construction and costing of each model.

The ConversationThey share a similar design “platform”, and by doing so, considerably reduce the overall cost of the base model. The benefit is quicker production with the added benefit of a cost model that allows for customisation to be included. It is a method the construction sector should adopt to produce housing where quality and affordability live happily together.

David Morton, Associate Professor in Architecture and Built Environment, Northumbria University, Newcastle.

This article was originally published on The Conversation. Read the original article.