Bp oil spill effect on stock market

Bp oil spill effect on stock market

By: Fiery Birds Date: 17.07.2017

We have placed cookies on your computer to help make this website better. You can change your cookie settings at any time. Otherwise, we'll assume you're OK to continue. Consider a time in which electric vehicles account for a third of all vehicles on the road. And in which electric cars outsell gasoline cars ten to one.

Or a remote possibility that will take far longer to reach than current hype would have us believe? Rather, it refers to the US car market at the end of the nineteenth century. Electric vehicles have been around for a long time; longer than gasoline cars.

But the advent of the Model T Ford and the mass production of affordable gasoline cars led to their demise in the early s. But the direction of travel is clear. Perhaps most importantly of all, they will help to improve air quality in urban centres. This is already of huge importance, with air quality in cities stretching from Delhi to London, Beijing to Brussels judged unsafe.

At the same time, EVs will help to increase the efficiency of passenger vehicles and reduce CO 2 emissions. More fundamentally, EVs are likely to be part of a broader transformation of the transport sector, revolutionising the way we think about and use our cars: So watch this space. In particular, just how significant could EVs be for oil demand and for the growth of CO 2 emissions over the next 20 years or so?

Before speculating about the future, let me start by summarising some facts about the current structure of oil demand and the importance of oil as a fuel for cars. Total transportation, which also includes rail, shipping, air and road haulage, accounts for a little over half of total oil demand, while industrial demand accounts for almost a third.

But the distances travelled and loads transported greatly increase the demands made on electric batteries, making an early electrification of these markets less likely. Over the next twenty years, the biggest concentration of EVs will be cars, which account for a fifth of total oil demand. All of this growth in oil demand was expected to come from developing economies, especially fast-growing Asian economies, as productivity and hence prosperity in these economies increase.

Oil consumption within the developed world has been falling for much of the past 10 years and that trend is likely to continue. In contrast, around 2 billion people in emerging market economies are likely to be lifted out of low incomes by It is this increase in prosperity and living standards in some of the most populous countries on the planet that is likely to drive increases in the global demand for oil.

Much of the remainder reflects increased industrial demand for oil, which is expected to be the fastest growing element of oil demand over the next 20 years Chart 2especially as a feedstock in the petro-chemical sector. The increasing prosperity within the developing world is likely to lead to a substantial increase in global car ownership, as hundreds of millions of families are able to afford their first ever car.

In the Energy Outlook, we estimate that the global car parc will roughly double over the next 20 years from around m cars to 1. Within that, the total number of electric cars is assumed to increase from around 1. Vehicle efficiency is likely to develop substantially over the next 20 years mitigating the extent to which oil consumption increases.

I will come back to the central role improving vehicle efficiency is likely to play in tempering oil demand growth in a moment. The projected increase in EVs also reduces the growth in oil demand that might otherwise occur, since the electricity powering the EVs is likely to be largely generated using fuels other than oil. However, the impact of this expected increase in EVs on oil demand is likely to be relatively limited: So the bottom line - based on this projection at least - is that EVs are not likely to act as a major disrupter to oil demand over the next 20 years.

But I can see some of you thinking: Who knows how quickly EVs will grow and penetrate the car market? EVs could grow far more rapidly that we expect. Technology may progress far more quickly than anticipated, reducing costs and offering even greater benefits. One particular possibility is if EVs become synonymous with a broader transformation of the car market over the next two decades, interacting with other disruptive mobility trends like autonomous driving, shared car-ownership and ride pooling.

EVs may be integral to a broader mobility revolution. I have an iPhone. I could buy an Android phone which replicates the vast majority of the functions of my iPhone but which is much cheaper. But I like my iPhone: I like using it, I like what is says about me. Suppose people buy electric cars, even if they are more expensive, because they like what the car says about them: The scale of this challenge is huge and the required changes across all dimensions of the energy system are extremely stretching to say the least.

In the IEA scenario, the stock of EVs is presumed to reach around million bysome million vehicles more than we envisage in our Outlook, with EVs accounting for half of the total increase in passenger vehicles over the next 20 years Chart 5.

This is at the very top end of the range of external forecasts I have seen; consistent with very significant changes in technology or policy.

Either that or a very large cool factor. As you would expect, this more rapid penetration in EVs dampens the prospective increase in oil demand. This reduction in the pace of growth is by no means trivial - it is enough to erase most of the projected growth in oil demand from cars over the next 20 years. The answer is the continuing improvement in vehicle efficiency that I just mentioned.

Over time, passenger vehicles have become increasingly efficient, driven by a powerful cocktail of increasing regulation, improving technology and changing societal preferences. Twenty years ago, a typical car would achieve something like miles per imperial gallon.

That number today is more like miles per gallon. This process is set to continue over the next twenty years. Indeed, the mounting pressure to reduce prediction about indian stock market of tomorrow gas emissions and improve air quality means the pace of efficiency improvements is likely to quicken over the next 20 years.

That miles per gallon for a typical car today could be over 50 mpg by A key point to note here is that the implications of these efficiency gains for oil demand are several times greater than the potential savings associated with EVs, even if EVs were to increase very rapidly: When considering the forces that could disrupt oil demand over the next 20 years, perhaps we should place more attention on the pace of gains in vehicle efficiency and less on the growth of EVs.

To pursue this point a little further: Almost all of the discussions on climate change in which I participate tend to focus on the fuel mix: But the counterpart to this focus on the fuel mix is that considerably binäre option handeln attention is typically placed on the importance of promoting and incentivising improvements in energy efficiency.

Yet in almost all the analyses I have seen of possible pathways to a lower emissions energy system, it is improvements in energy efficiency which account for the biggest savings over the next 20 years. And this relative importance of efficiency gains versus fuel switching also seems likely to be true for reducing CO 2 emissions from cars - at least over the next 20 years when oil-powered cars are likely to make up the majority of the global car fleet. Scomi stock market are happening and are likely to dampen the growth in oil demand and hence CO 2 emissions.

But during the transition phase when electric cars account for a minority of passenger cars - a phase which may last many decades - those benefits are likely to be fb stock yahoo options by the potential gains associated with oil-powered cars becoming ever more efficient.

The installed new head unit now speakers dont work reduction in CO 2 emissions associated with the growth of EVs depends, of course, on the fuels used to produce the electricity that powers them.

And in countries or regions in which the power sector is heavily reliant on coal, the reductions in carbon emissions associated with switching to an EV may be minimal or even worse: Trying to calculate the exact CO 2 emission savings associated with the increasing use of EVs is far from straightforward. Amongst many other things, it depends on: Based on this outlook for the global power sector, the increase in EVs envisaged in the Energy Outlook would reduce CO 2 emissions by up to 75 million tonnes per year by relative to a case in which there was no growth in EVs.

These are significant savings: For example, a 4pp shift today in the global power sector away from coal-fired generation to gas generation would lead to broadly the same saving in CO 2 emissions associated with even the ing stock broker rapid growth of EVs assumed in the IEA scenario. And the size of some of the incentives currently today nymex crude oil price offered to encourage the take-up of EVs suggests this could be achieved at a significantly lower cost.

Incentivising the growth and expansion of EVs has many attractions. It helps lay the foundation for future reductions in CO 2 emissions, as the importance of renewables within the power sector grows. But in terms of a narrow focus on reducing carbon emissions over the next 20 or 30 years, there may be more cost-effective policies. Be that within the transportation sector: Or more generally within the energy system, where prompting a substantial reduction in the use of coal within the global power system could generate carbon savings many times greater than that associated with the expansion of EVs.

Of course, in an ideal world, we should do all these things at once. But in the real world, the limits on resources, both financial and policymaking bandwidth, means that in practice choices have to be made.

Fiscal subsidies used to promote EVs reduce the amount available for incentivising CCS. Political capital used to advocate one set of policies cannot be spent advancing another. But EVs are back with a difference: The affordability and convenience offered by the Model T led to the eventual demise of electric vehicles at the beginning of the twentieth century. Improving technology, falling battery costs and the increasing importance of improving urban air quality means EVs Auction market preferred stock amps II are far better equipped to compete against the internal combustion engine and look set to grow rapidly over the next 50 years.

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EVs are not likely to be a game changer for the growth of oil demand over the next 20 years, where the increasing prosperity in emerging Asia is likely to swamp the impact of even a very rapid increase in electric cars.

And there may well be more cost effective methods of reducing CO 2 emissions over this period, be it by encouraging even greater improvements in vehicle efficiency, prompting a switch away from coal in the power sector, or incentivising increased investment in CCS.

But that should not detract from the many potential benefits that electric vehicles may bring. Improving air quality in the rapidly growing urban centres of the world. And along with autonomous driving, westfield sydney easter trading hours ownership and ride pooling, revolutionising the very way in which we use and interact with the cars of tomorrow.

Despite Doc Emmett L. But the roads of the future are likely to be increasingly frequented by electric vehicles. It should make for an exciting journey. This annex describes in more detail the framework and assumptions underpinning the calculations referenced in the speech. The demand for energy used by cars is determined by two core variables: The majority of this increase is assumed to be met from rising car ownership - the global car fleet is expected to increase from million cars in to around million by By contrast, we assumed that the average distance travelled per vehicle will remain broadly stable at around 15, km per year Chart A1.

In order to identify the impact that EVs could have on fuel demand, we need to make an assumption about the proportion of the total distance travelled by electric cars and those powered by internal combustion engines ICEs. For simplicity, we assume that the driving habits of ICE and EV owners are the same bp oil spill effect on stock market of which powertrain is used; i.

Within the EV category, we also have to make an assumption about the split between Battery Electric Vehicles BEVs that are powered solely by electricity, and plug-in hybrids PHEVswhich use a mixture of ICE and electric powertrains.

Chart A2 shows the various sensitivities we explore. We also need to make assumptions about fuel efficiency.

The efficiency of the average BEV is also expected to improve as a result of some of these technological advances, but by around half the rate - as electric motors already operate closer to optimal efficiency Chart A3. For PHEVs, we assume they drive half their miles under ICE power and half under electric power and that the efficiency assumptions underpinning each powertrain apply. By multiplying the number of ICE equivalent cars by assumptions about average miles driven and fuel efficiency we can see the impact on oil demand.

The calculations for the CO 2 emission figures quoted in the text are based on a simplified method that skirts over many of the intricacies required to produce precise estimates. As such, the figures below should be viewed as indicative only. To calculate CO 2 emissions from the car sector, we need to estimate emissions from both electric-powered cars and from conventional ICE-powered cars. To do that, we need to make assumptions about the amount of fuel consumed by each type of vehicle electricity and oil and the amount of CO 2 emissions that each fuel produces when used.

For EVs, we use the same approach and assumptions as for oil demand to calculate the total amount of electricity used by EVs, i. For conventional ICE cars, we convert the estimates from Chart A4 from barrels of oil consumed per day into energy units - million tonnes of oil equivalent MTOE - by multiplying by a standard conversion factor where 45 MTOE is assumed to equate to approximately one million barrels of oil.

Next we need to make an assumption about the amount of CO 2 emissions produced by each fuel. For oil, we assume that every tonne of oil consumed produces three tonnes of CO 2.

Based on these assumptions, Chart B2 calculates the effect of EVs on carbon emissions in the different scenarios. To put those figures in context, total CO 2 emissions from global energy consumption in amounted to Cookie notification We have placed cookies on your computer to help make this website better.

Share price feed currently unavailable. Enable javascript for shareprice. BP Global Media Speeches Back to the future: Based on a presentation made at: Bloomberg New Energy Finance: The Future of Energy, EMEA Summit, October An encouraging milestone on the road to a cleaner, low-emissions future? One hundred years on, electric cars are back. The re-emergence of EVs will bring many advantages.

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The transportation sector is changing and changing fast. The emergence of EVs raises at least two big questions for the energy industry. First, just how quickly will EVs grow and penetrate the passenger vehicle market? Second, as they do, what implications will EVs have for the global energy system? A few facts and figures Before speculating about the future, let me start by summarising some facts about the current structure of oil demand and the importance of oil as a fuel for cars.

Oil demand from cars in a global context.

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EVs and future oil demand So how important might EVs be for the global energy system over the next two decades? Drivers of oil demand growth over the next 20 years. Growth of the car fleet in BP's Energy Outlook.

But other things are not equal.

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Demand for oil from cars in BP's Energy Outlook. Faster penetration of electric vehicles But I can see some of you thinking: And indeed there are a number of reasons why that might happen.

So what happens if EVs grow far more rapidly than we expect? Demand for oil from cars with million extra EVs. That is a huge saving. Implications of EVs for CO 2 emissions To pursue this point a little further: The need to switch is, of course, important.

I have not attempted such a detailed calculation here.

bp oil spill effect on stock market

But there are other ways of achieving similar-sized reductions For example, a 4pp shift today in the global power sector away from coal-fired generation to gas generation would lead to broadly the same saving in CO 2 emissions associated with even the very rapid growth of EVs assumed in the IEA scenario.

It brings substantial benefits in terms of urban air quality. Conclusion Inthere were electric taxis driving around New York.

bp oil spill effect on stock market

A few months ago, a new electric taxi was launched in Singapore. Back to the future! Technical annex This annex describes in more detail the framework and assumptions underpinning the calculations referenced in the speech. Impact of EVs on oil demand: Demand for travel - underlying assumptions.

Number of cars - underlying assumptions. Fuel efficiency - underlying assumptions. Given those assumptions, we can calculate the impact EVs have on oil demand Chart A4. Oil Demand - key outputs.

CO 2 emission calculations The calculations for the CO 2 emission figures quoted in the text are based on a simplified method that skirts over many of the intricacies required to produce precise estimates. Electricity Demand - key outputs. CO 2 Emissions in Note, this m figure for the global car parc excludes all vehicles classified as trucks, including some SUVs classified as light-duty trucks.

BEVs run on electric power only, while PHEVs use a combination of both electric power and an internal combustion engine. See Annex for a detailed discussion of the assumptions underpinning the calculations presented here [he other elements of such a mobility revolution: It is worth noting that there is significant variation in these figures across regions. See Annex for the assumptions underpinning these calculations.

bp oil spill effect on stock market

It is unsurprising that early adopters of EVs display a wide range of driving habits, but it is noteworthy that a weighted average of the EVs in the study, which covered over 20, vehicles, showed an average annual mileage of 11, miles per year - similar to the national average for ICEs of 11, miles.

Given the variability and inconclusive trend so far, we have assumed for a Since one MTOE equates to TJ, one MTOE of road fuel will produce aound 3 million tonnes of carbon when combusted.

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