https://www.houstonchronicle.com/business/columnists/tomlinson/article/Oil-industry-s-future-not-as-bright-as-13579097.php
"A key wild card that flummoxes analysts with surprising frequency is consumer behavior.
Consumers ultimately decide long-term prices by how much they demand, and to be honest, few of them love the oil industry. Analysts have consistently underestimated the adoption of alternatives to oil and natural gas, particularly renewable energy and electric vehicles.
The EIA predicts, for example, that electric, hybrid and plug-in hybrid vehicles will only make up 8 percent of new-vehicle sales in 2025. Sales will rise to just 25 percent of the market share in 2050. If this is true, the oil and gas industry has nothing to worry about.
On HoustonChronicle.com: Tesla and oil companies lose market share as luxury brands roll out electric cars
Auto manufacturers, though, tell a different story. From GM to Ford, from Volkswagen to Daimler, from Toyota to Nissan, these companies expect electric vehicles to surpass liquid-fueled vehicles by 2030. The main reason is China and the eight other nations that plan to ban internal combustion engines by 2050.
There is also the question of economics. The cost of electric vehicles is plummeting, and most analysts believe they will be cheaper than regular cars by 2025. The next generation of electric vehicles will be as transformative to the energy industry as the shale revolution.
Bloomberg New Energy Finance, which also makes predictions, expects electric vehicles will make up 64 percent of the new-vehicle market by 2040.
Shell, BP and Chevron seem to think so, too. The first three have already invested in electric car charging businesses, and Exxon Mobil is considering a similar investment, according to a report by The Atlantic Council.
Smart oil and natural gas executives understand the risk electric vehicles pose to their fossil fuel businesses, which is why they are keeping costs low to make a profit at $50 crude. If they allow prices to rise, electric vehicles will become cost-competitive sooner."
"A key wild card that flummoxes analysts with surprising frequency is consumer behavior.
Consumers ultimately decide long-term prices by how much they demand, and to be honest, few of them love the oil industry. Analysts have consistently underestimated the adoption of alternatives to oil and natural gas, particularly renewable energy and electric vehicles.
The EIA predicts, for example, that electric, hybrid and plug-in hybrid vehicles will only make up 8 percent of new-vehicle sales in 2025. Sales will rise to just 25 percent of the market share in 2050. If this is true, the oil and gas industry has nothing to worry about.
On HoustonChronicle.com: Tesla and oil companies lose market share as luxury brands roll out electric cars
Auto manufacturers, though, tell a different story. From GM to Ford, from Volkswagen to Daimler, from Toyota to Nissan, these companies expect electric vehicles to surpass liquid-fueled vehicles by 2030. The main reason is China and the eight other nations that plan to ban internal combustion engines by 2050.
There is also the question of economics. The cost of electric vehicles is plummeting, and most analysts believe they will be cheaper than regular cars by 2025. The next generation of electric vehicles will be as transformative to the energy industry as the shale revolution.
Bloomberg New Energy Finance, which also makes predictions, expects electric vehicles will make up 64 percent of the new-vehicle market by 2040.
Shell, BP and Chevron seem to think so, too. The first three have already invested in electric car charging businesses, and Exxon Mobil is considering a similar investment, according to a report by The Atlantic Council.
Smart oil and natural gas executives understand the risk electric vehicles pose to their fossil fuel businesses, which is why they are keeping costs low to make a profit at $50 crude. If they allow prices to rise, electric vehicles will become cost-competitive sooner."
Comment