“The potential for grid-connected vehicles to decimate our demand for liquid hydrocarbon fuels should be clear. Freed from the psychological barriers which hinder widespread market acceptance of pure battery electric vehicles, plug-in hybrids with an all-electric capability of just [30] kilometres would slash liquid fuel consumption, since such a high proportion of journeys undertaken are well within this range.”

"Plugged In: The End of the Oil Age” by WWF
(Dr. G. Kendall, 2008)

Oil Use
“With over eight hundred million vehicles in the world today, potentially doubling by 2030, the longer we focus on incremental improvements – choosing to ignore our fundamental dependency on liquid hydrocarbon fuels – the more we will be forced to confront additional challenges: pressure on governments to open up National Parks and other protected areas for oil exploration, widespread support for destructive unconventional ‘solutions’ like oil sands and coal-to-liquids, increasing geopolitical conflicts and human rights abuses, and the resulting rapidly growing CO2 emissions from hundreds of millions of vehicle tailpipes.

Remaining reserves of crude oil are concentrated in relatively few countries. With the exception of Russia, all the major oil consuming nations – US, EU, China, Japan, and India – are significant net importers. They now face a liquid fuels crisis, which can be solved neither by the threat of military action nor by turning to so-called ‘alternative’ but in fact highly polluting hydrocarbon resources. The only sustainable approach to this crisis is to tackle its root cause: the unchallenged dominance of the internal combustion engine (ICE) which drives transport’s ninety-five percent dependency on liquid hydrocarbon fuels.”¹ .

The EIA and IEA both expect oil demand to exceed 100 mb/d by 2015, up from current demand of 87.5 mb/d. Deutsche Bank’s oil analysts believe oil could rise to $150/bbl oil in the intermediate term. Under such a scenario, Deutsche Bank estimate sustained gasoline prices of $4/gallon U.S. ($5.95 per gallon in Brazil, $8.38 in the UK, $8.73 in Norway, and $9.28 in Germany)² . In UK terms, these prices (£1.26 / litre at current exchange rates) were nearly reached in July 08 with oil at $140/bbl oil. Even though the price has since receded, the underlying trends will surely return to at least this level. In crude terms ‘peak oil is driving change’. The onset of a global recession in 2008 has had a profound effect on the auto industry, which is experiencing unprecedented shifts in segment mix away from less fuel efficient vehicles.

Transport is the worst performing sector under Kyoto Treaty/Protocol and seriously jeopardises the achievement of the targets. Transport CO2 emissions in the EU grew by 35% between 1990 and 2006. Other sectors reduced their emissions by 3% on average over the same period. The share of transport in CO2 emissions was 21% in 1990, but by 2006 this had grown to 28%. The European Environment Agency estimates that cars are responsible for 14% of CO2 emissions³.

The BP Statistical Review of World Energy 2007 shows that current world oil reserves total 1.208 trillion barrels, can sustain world oil consumption of 83.7m barrels per day (30,557m barrels per year) for 39.5 years at current rates. The diagram below illustrates the distribution of these reserves.

In July 07, the International Energy Agency issued a medium term (5-year) report which assesses world economic growth, the consequent demand for oil, and the likely growth in oil and gas supplies. The report draws the conclusion that there will not be enough annual production capacity of oil to permit the world’s economy to grow at 4.5 percent a year for the next five years, since this would imply worldwide oil consumption increasing to 95 million barrels a day from the current 86 million.

Although the IEA figure of 86m barrels per day differs with the BP Statistical Review figure of 83.7m barrels per day, the IEA report confirms the increasingly widespread view that the world has reached a stage of ‘peak oil’ in which both production and reserves have reached peak levels.

According to the BP Statistical Review of World Energy 2007, over the past 10 years, 1996 – 2006, world oil consumption has increased by 17%. If world oil consumption continues to increase at an annual rate of 1.5915%, the total known oil reserves (including 163,500m barrels of Canadian oil tar sands) will be completely exhausted by 2040, in approximately 30 years.

The counter argument is that new reserves are continuingly being discovered and that these will provide for increasing demand. The only significant increases in reserves have been in Eurasia, Europe, Africa and more recently off the coast of Brasil. In fact between 1986 and 2006 the Middle East passed its peak reserves point. With increasing global political instability and conflict, the IEA now expects there will be no net increase in oil production capacity in Iran, Iraq, and Venezuela in the next five years, and the oil production currently shutdown by insurgents in Nigeria will remain that way for the foreseeable future. So, what’s the solution?

“Automotive transport is ripe for transformation. We need to accelerate the commercialisation of vehicles with diversified primary energy sources, high efficiency and compatibility with a sustainable, renewable energy future. The electrification of automotive transport offers a promising way to achieve this objective. Grid connected vehicle technology – enabling all or part of every journey to be powered by electricity taken from the grid – is available based on existing infrastructure and current technology. Battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) supplemented by sustainable biofuels for range extension – can dramatically reduce the crude oil dependency of automotive transport in an efficient and sustainable manner.”⁵

¹Source: Plugged-in: the End of the Oil Age, WWF, 2008
²Source: Deutsche Bank: Auto Manufacturing Electric Cars: Plugged In, June 2008
³Source: European Federation for Transport and Environment, Aug 08
⁴Source: C.J Campbell and Anders Siverston, “Updating the Oil Depletion Model”, 2005
⁵Source: “Plugged-in: the End of the Oil Age”, WWF, 2008; Dr Gary Kendall, Senior Energy Business and Policy Analyst for the WWF Global Climate Change and Energy Programme
⁶Source: Micky Bly, Director of Engineering- Hybrid Integration and Controls, General Motors, 2007