Sooner than you think? A prediction that electric cars will cause the next oil crisis

In the fifties and early sixties there was a wonderful newspaper series, Closer Than We Think, drawn by Arthur Radebaugh. In 1958 he predicted that we would soon be driving solar powered electric cars. Now Bloomberg Business is starting a video series called Sooner Than You Think that well might be more accurate. In their first episode, they look at the impact of the electric car and how it will cause the next oil crisis.

For years everyone including TreeHugger worried about Peak Oil, where it was assumed that the cost of oil production would keep going up and up until nobody could afford it anymore. Then fracking and oil sands and deep water drilling brought new supplies on stream and we got an oil price crash instead. In the associated article with the video, Bloomberg writer Tom Randall predicts that the electric car will cause the next oil crisis. They don’t have to take over the entire market to do so; just enough to tip supply up over demand like fracking did.

With all good technologies, there comes a time when buying the alternative no longer makes sense. Think smartphones in the past decade, color TVs in the 1970s, or even gasoline cars in the early 20th century. Predicting the timing of these shifts is difficult, but when it happens, the whole world changes. It’s looking like the 2020s will be the decade of the electric car.

predicting crash© Bloomberg

They predict that "By 2020, some electric cars and SUVs will be faster, safer, cheaper, and more convenient than their gasoline counterparts." Extrapolating from last year’s growth rate (and Tesla’s forecasts), they calculate that by 2023 electric cars could displace 2 million barrels of oil per day. That's how much new production came onstream and caused the 2014 oil crisis that continues to glut the world in cheap oil. Others (including oil companies) predict a much slower take-up of electric cars, which would delay the crisis. But it does seem inevitable. They also point out some other benefits:

Electric cars will reduce the cost of battery storage and help store intermittent sun and wind power. In the move toward a cleaner grid, electric vehicles and renewable power create a mutually beneficial circle of demand.

Of course if they are right, then a lot of countries are placing some sketchy bets on pipelines and oil infrastructure.

Tags: Electric Vehicles | Peak Oil

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