The Research in super-brief
The title image is Figure 5c of Global Carbon Budget 2022, apparently the most comprehensive scientific effort to quantify global CO2 emissions as well as the overall carbon cycle. A collaborative effort of a huge team of researchers, it gets annual updates. The 2022 version went live on November 11. As the authors admit, 2022 is a true Wild Card year, so their projections come with a huge grain of salt.
Still, we can learn a lot from the comparative patterns of oil, coal and gas. The former is projected to have the largest 2022 vs. 2021 increase: +2.2% vs. +1.0% for coal and -0.2% for gas. However, the other two had already exceeded 2019’s consumption level in 2021, offsetting the temporary Covid drop and then some. Oil, on the other hand, ended 2021 still 4.1% below 2019.
To exceed 2019 in 2023, oil will need another relative blockbuster year next year (after assuming that the bullish full-year 2022 projections will indeed pan out).
Not happening in 2023. Not with universal expectations for a global recession (personally I’m not sure a recession is happening — but clearly, economic activity won’t surge in 2023).
And surely no oil surge is happening, thanks to the final, long-awaited maturation of…
The EV Factor!
Oy, I’ve been writing and hoping and watching and literally praying for the EV revolution to affect Big Oil, for nearly a decade now. Here’s what I wrote in April 2013, as part of the Daily Kos #NOKXL (No Keystone XL) blogathon organized by the late great Linda (a.k.a. Patriot Daily News Clearinghouse):
#NOKXL: Cut Off the Tar Sands – Switch to an Electric or Plug-In Vehicle
…Oil has a stranglehold on our very concept of movement. Take that monopoly away… and the entire malignant oil-politico-economic complex that generates global warming, wars and instability…. might collapse.
Now, in 2013, the ability to defeat oil’s monopoly is at our fingertips. We can do this. All that remains, is to spread this change by example and by word-of-mouth.
How do I know? For the past 8 months we’ve been leasing an all-electric 2012 Nissan Leaf as our main vehicle.
…Americans buy around 15 million new cars and trucks per year. We are now fast approaching a rate of 100,000 of these cars being EVs and plug-ins. Once we double or triple that, ridiculous projects such as Tar Sands will quickly become obsolete….
That was my 3rd ever EV diary (now I have several dozen under my belt, including the world-famous annual Top 10 Countries in the EV Revolution series).
I was a bit too optimistic back then, thinking that a few hundred thousands EVs/year sold in the US would start doing the trick. *And* also thinking that this milestone was just around the corner in 2013. It actually took the US until 2018 and the massive Model 3 ramp, to cross 300k/year, and then EVs in the US stagnated again around that level for the remainder of the Trump years.
Watching grass grow? It’s been more like watching an oak tree grow.
In that 2013 diary I had overlooked or discounted at least 2-3 main factors:
- The fleet-replacement rate is far slower than market trends. Missing this one I feel most ashamed for, b/c it’s a simple content and numbers issue, and I’m usually a content-and-numbers person. A typical car in medium-high income countries lasts ~15-20 years. This means that in a relatively stable market, each year’s sales only replace 1/15 — 1/20 of the fleet. So a 1% EV share of new sales means that only 0.05-0.07% of the fleet gets electrified. That’s barely a rounding error vs. other annual fluctuations.
- To my defense, economic trends are often set by leading indicators and by expectations, rather than by current market/fleet numbers. So I thought that the moment EVs start taking off for real, both Big Oil and Big Auto will have to adjust. In this I had discounted the power of incumbency, and the total willingness of both Big Oil and Big Auto kill their (and Humanity’s!) long-term prospects in order to keep squeezing and extending their short-term gains. Expanding on this and on the next point may require yet other diaries. Might be worth it some day.
- The pernicious, mendacious anti-EV gaslighting across most of the media has helped Big Oil+Auto deceive consumers into not even thinking about EVs, and has divided and demoralized the forces on our side that could have pushed the EV revolution sooner and faster.
Point #3 has been the most disheartening for me. Having driven an affordable BEV (“pure electric”) since 2012, and seeing how most middle-class American households have 2+ cars, I knew that already from 2013-4 onwards it made not only environmental sense, but pure, no-brainer economic sense for such households to replace one of their cars with an EV. They have another car; so long range is not required. Had the public realized this, demand for cars such as the legacy short-range Nissan Leaf would have shot through the roof (there are literally tens of millions of “second cars” in the US). Automakers would have had to respond more quickly to that demand, and stop resisting the EV revolution.
But it Just. Did. Not. Happen. EVs were not on the common American family’s radar. That was no accident — a ton of gaslighting efforts on multiple fronts had gone into keeping it that way, for as long as possible.
The “War on EVs” has set us back perhaps a half-decade. A very critical half-decade, and the US in particular is now lagging Europe and China by 2-3 years. But in the end, it’s all just been a delaying game. Game Over:
- 2019 ended with 2 million EV sales and a cumulative ~8 million plug-in vehicles on global roads, out of a total vehicle fleet of 1+ billion. Then 2020 alone added >3M, and 2021 doubled up on 2020 with 6.6M.
- Through October 2022, YTD plug-in sales are inching close to 8M, with a 13% market share. December is always the strongest EV month, so we will likely end the year with >10M new EVs and a 14-15% global market share, 5-6x higher than 2019’s share. Nearly ¾ of that are BEVs.
- In response to Putin’s invasion of Ukraine, the drizzle of forward-looking national and local governments passing ICE new-car sales bans has become a deluge, with the entire EU passing a 2035 ban in November. The people’s representatives have come together and drawn a line in the sand to both Big Oil and Big Auto. European automakers and others targeting Europe as a main export destination, now have little choice but to turn EVs into their main technology. Chinese automakers are already ahead of them.
- The US Infrastructure and Inflation Reduction Acts, and additional steps by the Biden-Harris administration together with spillover/inspiration from the ongoing EV boom and regulations in Europe and China, will help the US EV market catch up and contribute to the global acceleration.
EVs vs. the Overall Global Vehicle Fleet
- Global auto production/sales data (of all types) don’t have a single consensus source, but several official sources agree that numbers had peaked in 2017 somewhere north of 95M vehicles of all types (including trucks, buses, vans, etc.). 2019 was already a bit slumpy, then came 2020’s sharp drop. 2021 and 2022 have not seen a strong rebound, remaining around 80M/year.
- What happens at the other end of a vehicle’s life? What are the numbers there? Here things get murky. But the Oak Ridge National Lab maintains a Transportation Energy Data Book with an annual table estimating the global fleet since 1960 (Table 3.02). From this, we can infer indirectly how many vehicles retire each year. The numbers jump around quite a bit, but in recent pre-pandemic years the fleet grew by ~40M/year, against a production rate of ~90M/year — suggesting that ~50M/year went out of use during the 2010s.
By the way, not directly related but very relevant to the fleet/oil question as a whole: there’s a very interesting first-ever 2020 report (pdf) by the UN Environment Programme about used vehicle export/import. Entire parts of the world hardly get any new vehicles, only Rich World leftovers. But according to that report, only several million vehicles/year go that route, suggesting that most vehicles end their life in their first country of deployment. An older report by someone else (analyzing the EU in 2014) found similar results (see image below).
Back to our main track of estimating the global fleet: given 2020-2022’s softness, next year’s fleet might have ~60-100M more vehicles than 2019’s. But looking at the EV numbers above, ~22-23M of that 4-year fleet increase will be composed of EVs. It’s similar to how new grid capacity in more and more countries, gets more and more dominated by renewables. EVs took a bit longer to get going, but now they are ramping up super-fast, and are slated to account for >100% of fleet increase (meaning the ICE fleet actually contracting) very, very soon.
So 2023’s ICE fleet will be maybe ~5-6% larger than 2019. With expected economic stagnation and high oil prices, vs. 2019’s white-hot economy and cheap oil, this almost certainly won’t be enough to overtake 2019’s vehicle oil consumption.
There are reasons to believe that fleet retirements in coming years will be higher, perhaps 60+M/year. First, the 50M/year of the mid-late 2010s was out of a smaller fleet. Second, in 2020-2021 the fleet got substantially older, both because of the pandemic, and because of supply-chain constraints on new vehicles. Nearly all the retirement will be ICE, because they will still come mostly from model years with very few EVs in them.
So the global ICE fleet size will likely peak in 2024-2025 slightly above 2023 levels, and its composition will likely be more fuel-efficient than 2019’s. But what if the next economic recovery will be super-strong? Then for sure, it will fuel an even faster EV adoption curve, which might turn 2023 into the actual year of peak ICE fleet.
What about Other Oil Consumption?
Seeing the writing on the wall in recent years, Big Oil has been betting on other horses to gin up oil demand. Well…
- Global flights in 2019 were beyond white-hot, they were insane. Then came the pandemic, and it is proving to be more than a temporary aviation dip:
- Many businesses have discovered the financial advantage of doing more stuff remotely rather than flying people over all the time.
- Airlines, stung by the pandemic and short on labor, are hedging themselves by reducing flights and cramming them full. Not fun for travelers, but helpful for keeping oil consumption in check.
- And governments (starting in Europe) are finally gathering up the courage to put some controls on that hitherto out-of-control sector. With 2023 looking to be at best economically flat-ish vs. 2022, we’re also gaining important time to get those controls to take effect.
- This leaves plastics, which again, the world is beginning to get its act together on. If Big Oil was counting on the 2020s to be a decade of accelerating plastic boom at levels that will offset reductions in vehicle oil consumption, they were counting wrong. The world has stopped looking the other way on plastics, and for sure the fantasy of ever-increasing fossil-derived production further drowning the world in plastics, isn’t going to pan out. Not for long, anyway.
I don’t have a good punchline to end this diary. Or maybe this will work?
Do whatever you can so that you and those you might influence, reduce their oil consumption as fast as possible. If for you personally this is less feasible, surely you know people in your circle who might just need the little helpful tip or nudge to get off oil. Do your little bit to finally send Big Oil, the worst villain in the climate-crisis story, into the dustbin of history where it belongs.