BP Expects Oil Demand to Peak in 2030s, EVs to Have Little Effect: Report

Even if the sale of internal combustion-powered cars is banned, BP thinks oil demand would only fall 9 percent short of expectations.

First Shore-Powered Oil Tanker Terminal Is Unveiled In Long Beach
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British Petroleum reportedly expects that bans on the sales of new internal combustion-powered vehicles, as pledged by multiple countries' governments, will have an insubstantial effect on oil demand or greenhouse gas emissions.

The petrochemical company's chief economist Spencer Dale told The Guardian that it modeled the likely effect on oil demand if worldwide bans on the sale of ICE vehicles were to go through, and it determined that peak demand would hit about 100 million barrels per day. Current demand for oil is reportedly around 97 million barrels per day, and peak demand (sans an unlikely global ICE ban) is projected to hit around 110 million barrels per day. This peak is projected to arrive sometime between 2035 and 2040, though Dale advises that many factors between now and then could change when the peak arrives.

"Nobody knows when it's going to peak because small changes can shift it by five to 10 years," Dale told the publication.

Greenhouse gas emissions from burned petroleum products, however, are not expected to slow in the global ICE ban scenario: a greater number of vehicles on the road (electric and ICE) would contribute to a seven percent increase in emissions. BP estimates that the number of electric vehicles (EVs) on the road will total 180 million by 2035, up from its 2018 projection of 100 million. BP sees 320 million EVs on the road by 2040, though these will still make up a small (approximately 16 percent) minority of the projected two billion vehicles on the road.

Nations such as France, Great Britain, and other, smaller European countries have promised to cease the sale of ICE vehicles by 2040, while other regions such as China, India, Germany, California, and British Columbia have discussed following suit. Even if the entire world were to enact bans similar to those promised or considered by any of the above, automakers' abilities to match EV demand may be limited by questionable battery supply, which today is believed to be capped by the availability of lithium, a crucial component in lithium-ion and lithium-polymer EV batteries.

Battery manufacturers hope to find more sustainable alternatives to lithium-ion batteries, but have had difficulties commercializing alternatives such as lithium-sulfur, solid-state, or supercapacitors. A recent buyout of energy storage company Maxwell by Tesla could portend the commercialization of the latter two, but even if that occurs, the impact EVs can have on reversing climate change isn't looking like it'll be enough on its own.