BP has increased its long-term forecast for the rise of electric vehicles and sees a potential peak in global oil demand within two decades, but is nonetheless warning that even the more bullish scenarios they modeled will not lead to a collapse in oil consumption.
The forecast is in its just-published 2018 Energy Outlook, a big collection of scenarios for global fuels, power and emissions trends through 2040.
Bottom line: The "evolving transition" scenario sees growth in global demand for liquid fuels (largely a proxy for oil) ending in around 2035. More aggressive scenarios, including one that models global ban on sales of internal combustion (ICE) vehicles starting in 2040, show a more aggressive move away from oil, as the chart above shows.
The "evolving transitions" case — which sees policies and tech evolving in a way consistent with the recent past — forecasts higher electric vehicles deployment than last year's report.
- "In the ET scenario, there are nearly 190 million electric cars by 2035, higher than the base case in last year’s Outlook of 100 million. The stock of electric cars is projected to increase by a further 130 million in the subsequent five years, reaching around 320 million cars by 2040," they note.
Yes, but: BP says even a ban on sale fossil fuel-powered cars in 2040 would not cause a collapse in oil demand, given the use of oil in petrochemical production, trucking and other sectors.
- "This scenario reduces liquid fuel demand by around 10 million barrels a day relative to the Evolving Transition scenario but, even so, the level of oil demand in 2040 in the ‘ICE ban’ scenario is higher than in 2016," a summary states.
They warn that major investments in new supply will be needed to meet demand in the decades ahead—the chart above includes their projection of what would happen absent finding and developing new fields.
This story has been updated.