OPEC has suggested that the advent of electric vehicles will have a huge impact on oil demand, and now it is beginning to show. Data from IHS Markit also confirm this point. With the huge increase of electric vehicles in China, there are 279,000 barrels of oil a day removed from demand.
According to the latest report from Bloomberg New Energy, the economy is driving this change, and the total number of electric buses is far more than alternative energy. The report states that a 110kWh battery e-bus plus the most expensive wireless charging will cost as much as a diesel bus when it travels about 60,000 kilometers per year. This means that buses using the smallest battery, even with the most expensive charging options, will be cheaper in medium-sized cities where buses travel on average of 170 kilometers per day.
Today, big cities with high mileage have chosen electric cars which are cheaper than diesel and CNG buses. In a megacity where a bus travels at least 220 kilometers a day, the operating cost can be saved by US$130,000 even if the most expensive electric bus is used instead of a CNG bus during the 15-year service life of the bus.
The use of 1,000 battery-powered buses on the road can save 500 barrels of diesel fuel per day. In 2018, the demand for oil-based fuel from buses may decrease by 279,000 barrels per day. By 2040, this number could rise as high as 8 million barrels per day, according to calculations by BNEF.
This will significantly reduce oil demand, but overall, the market seems to believe that petrochemicals will make up the difference in demand. However, with the continuous development of the plastics market, there is still room for discussion on this issue.
Stephen George, KBC’s chief economist, agrees with the International Energy Agency’s prediction that petrochemicals will grow to replace transport fuel demand. He acknowledges that everyone uses different solutions, and that strategies need to be resilient in the face of market changes. “I see professionals who prefer to use renewable energy more than previously. “He said. However, due to the growth of plastic, oil demand will continue to increase.
The average of per capita plastic consumption in the United States is 150kg, which is the biggest country in terms of plastic consumption. These include bottles, packaging, durable goods (many cars are now made of plastic). Europe and Japan followed closely and George predicted that the change of population structure and the growth of the middle class will boost global plastic consumption growth of 45kg per person each year. Therefore, downstream petroleum derivatives will promote the demand for non-combustible oil.
It seems the real question is whether this will be new plastic or recycled and reused. Scientists have been looking for breakthroughs in technology. In April 2018, they announced that they had accidentally discovered an enzyme which can eat plastic. After being amplified, this enzyme will have a significant impact on the way in which plastic is treated within the economy. At present, it is mainly in the form of a kind of waste. If we find new processing form, the future oil demand line may be changed again.