Oil Decline Scenarios in an EV World

When will oil run out? This question has been recurring for more than a century now. Furthermore, this question was the topic of intense dispute from the 1970s through 2010.

It’s still disputed exactly how much oil could ultimately be extracted from the ground, but estimates have come much closer together now. These days, estaimtes of “all liquids” including unconventional oil range from 5 trillion barrels (on the conservative side) to 10 trillion barrels (on the generous side). Thus far, the world has used approximately 1.4 trillion barrels, and uses 37 billion barrels per year.

This issue is much less controversial than it was in the past. Not only have estimates come closer together, but perhps more importantly, there is now a conversion to electric vehicles underway, which changes the picture dramatically. We now have an obvious and widespread alternative for transportation when oil production starts declining. This makes the issue seem far less pressing. Probably, the debate over oil availability will never again reach the intensity it had from 1975-2010.

EV penetration is important because it ameliorates the effects of fossil fuel decline. If the global economy switches to EVs at exactly the same rate that oil production declines, starting right when oil peaks, then the decline of oil would have no effect on vehicle miles travelled. If EV adoption becomes widespread before oil production starts declining for geological reasons, then it pushes out the date of exhaustion and lengthens the gradual decline.

Any scenarios of future oil usage must therefore take into account anticipated EV penetration. Any scenario which omitted this would be in serious error. At present, EV market share for passenger vehicles is around 24%. Even if further electrification is very gradual, it still totally changes the long-term trajectory of oil demand and production.  As a result, we must include estimates of EV penetration in our scenarios for future oil production.

In this article, I will lay out several scenarios for future oil production. Each scenario will start with different assumptions of how much oil is the ground, and how quickly oil demand decliens because of EV penetration.

Scenario 1: Generous Assumptions

Here we will assume that the total amount of oil in the ground that could ever be extracted was 10 trillion barrels. Oil production starts declining 5 years from now because of EV penentration and declines linearly to zero (for both passenger vehicles and heavy trucks) over 40 years. In which case, we obtain the following figures:

1,400 billion Oil used so far

185 billion Oil used in the next 5 years

740 billion Oil used during the decline phase for the next 40 years

2,325 billion Oil extracted ever

10,000 billion Total Oil available

Thus, using optimistic assumptions, the global economy never uses more than 25% of the oil that was available to it.

These figures are optimistic but plausible. As a result, it’s not clear that the world ever faces an insolubile liquid fuels crisis.

Scenario 2: Moderate Assumptions

In this scenario, we assume that world had 7 trilliion barrels initially, oil starts declining 10 years from now because of EV penetration, and it declines linearly toward zero over 80 years. In which case, we obtain the following figures:

1,400 billion Oil used so far

370 billion Oil used in the next 10 years

1,480 billion Oil used during the decline phase for the next 80 years

3,250 billion Oil extracted ever

7,000 billion Total oil available

Thus, using moderate assumptions, the global economy never uses half of the oil that was available to it.

This is a moderate case. The figure of 7,000 URR is a median estimate between optimistic and pessimistic ones. The conversion to EVs over 80 years is slower than appears to be happening; for example, EV market share has grown from 1% of passenger vehicles to 24% in less than a decade.

Thus, using moderate or even slightly pessimistic assumptions, the world still never runs out of oil or even comes close.

Scenario 3: Pessimistic assumptions

In this scenario, we will accept Jean Laherrere’s most recent estimate of 5 trillion barrels of liquids ever extracted. Bear in mind that this estimate relies on Hubbert Linearization, which has seriously underestimated oil resources in the past. Still, this is the most conservative plausible estimate, so we’ll use it here.

We’ll assume a 10-year delay before oil demand starts declining because of EV penetration. Furthermore, we will assume that the transition to EVs causes oil demand to decline 1% linearly per year, in other words, a full transition would take an entire century. Furthermore, we will assume that 20% of oil usage is not transitioned at all. This is because some sectors are difficult to electrify. For exanple, some long-haul trucking is difficult to electrify because it involves long journeys in very rural regions where electric recharging infrastructure would be expensive and rarely used, for example, in Outback Australia, rural Nevada, etc, so those places continue to use diesel in trucking in this scenario. Also, ocean shipping still relies on heavy oil in this scenario. Also, aviation is impossible to electrify, so it still relies on oil in this scenario. However, liquid fossil fuels are considered interchangeable, so ocean ships could be built using turbine engines that run off of diesel, heavy fuel oil, gasoline, etc. Thus, oil demand does not decline to zero, but declines to 20% of its present value and stays there. In which case, we obtain the following figures:

1,400 billion Oil used so far

370 billion Oil used in the next 10 years

1,480 billion Oil used during the decline phase of 80% for the next 80 years

3,250 billion Oil extracted up until a permanent 20% plateau

5,000 billion Total oil available

Thus, oil runs out in 326 years. When the world has electrified everything it can easily electrify,  over 80 years, it is left with a 20% oil usage which is difficult to electrify and 1,750 billion barrels of oil remaining (5,000 - 3,250, from above). At 20% usage per year (7.4 billion barrels), this leaves 236 years, plus the 80+10 years which had elapsed so far, yielding 326 years total.

Conclusions

In all scenarios, the world does not face a liquid fuels crisis. Even using very pessimistic assumptions, there is no shortage of liquid fuels for centuries. Provided the world continues transitioning to EVs, at least very gradually (1% per year linear demand reduction), there will be no liquid fuels crisis.

Furthermore, there doesn’t appear to be any plausible calculation which results in a liquid fuels crisis earlier than 2100. No reasonable assumptions result in that outcome. Even using Jean Lahererre’s very pessimistic Hubbert calculations for future oil production, the world peaks in 2040 and still produces half the current amount of liquids in the year 2100. However, that rate of geological depletion is easily outrun by even a very gradual transition to EVs.

It must also be mentioned that the conversion to EVs which has occured so far was not the fastest possible. The market share for EVs in passenger vehicles increased from 1% to 24% in 10 years, but that was done lazily. That was done under no threat and without extremely high oil prices. Presumably, an actual shortage of oil could lead to a much faster transition than that, after some delay while new factories are built, resulting in no reduction in vehicle miles travelled even with absurdly pessimistic assumptions about future oil production.

As a result, the world simply does not face an imminent, insoluble liquid fuels crisis.

Of course, there could be other reasons (besides depletion) for a liquid fuels crisis, such as a large war in the middle east, but there will be no insoluble liqiud fuels crisis during this century because of oil depltion.

Hydrogen PowerPaste

People may be interested to learn of a new renewable option for transportation. The Franuhofer institute has introduced a new substance called PowerPaste, which is a paste-like substance that holds hydrogen using chemical bonds. PowerPaste is pumpable for large vehicles like ships, but it’s delivered in canisters for passenger vehicles which are loaded onto a vehicle and re-used when done It is not flammable or toxic. 

PowerPaste has a gravimetric energy density of 1.6 kwh/kg, compared to 12.67 kwh/kg for diesel, so PowerPaste has less than 12.7% of the energy density of diesel fuel. Still, that may be sufficient. Let’s calculate what kind of impact this would have on long-haul trucks.

A semi truck holds about 200 gallons of diesel on average (I just googled for this) across two fuel tanks. Diesel weighs 7.1 pounds per gallon, so the diesel fuel weighs 1420 pounds for a semi-truck. An equivalent amount of PowerPaste would weigh 11,244 pounds, so the PowerPaste would add 9,824 pounds to the weight of the fuel. This is approximately 22% of the net cargo capacity which a semi truck is allowed to carry (45,000 pounds in the USA, which I just googled to find out). A loss of 22% of cargo capacitty would require 28% more trucks to carry the same load.

Probably, trucks which use PowerPaste would have smaller tanks and would refuel more often. It might make more sense for the truck to carry enough fuel for 850 miles of range and then refuel every evening, as a matter of habit, rather than refuelling every few days or so. In which case, the weight of the fuel would be less than half what we assumed above, and would take up only 8.6% of the cargo space, requiring only 9.4% more trucks to carry the same load. 

If PowerPaste were used on ships which needed to cross the Pacific Ocean (which is the largest expanse of open water in the world), it would reduce the cargo capacity by 18% compared to bunker fuel. This is for the Maersk E class of container ships. Details of the calculation will be placed in the comments.

Trains are even less of a problem than trucks or ships, because they have a much lower ratio of fuel to cargo than trucks, and do not have to cross the entire Pacific Ocean without refuelling like ships.

PowerPaste has lower energy density than diesel or bunker fuel, but the energy density appears to be adequate for long-haul transportation. It requires only modest sacrifices of cargo capacity.

Of course, a crucial consideration is price. The PowerPaste is made out of common chemicals (magnesium) and is recycled, along with the canister. As a result, the overwhelming factor in price is likely to be the price of renewable hydrogen. I looked up a price prediction for renewable hydrogen at year 2030, given current gradual declines in prices over time. The expected price of hydrogen in 2030 by Bloomberg New Energy Finance is $5/kg. A kilogram of hydrogen has about the same energy as a gallon of diesel, so hydrogen and thus PowerPaste will likely be somewhat more expensive than diesel.

Another important consideration is refuelling stations. PowerPaste can be delivered to refuelling stations in tanker trucks, similar to gasoline or diesel. Furthermore, PowerPaste is not toxic and so would not require the expensive underground tanks for gasoline which must be periodically replaced. As a result, it’s possible that PowerPaste refuelling stations would be even less expensive and more common than gasoline stations are now. Since PowerPaste for small vehicles is sold in a canister, it could be sold at small stores devoted to other things, like Propane tanks are now. There could be even more widespread refuelling stations for PowerPaste than for gasoline.

In summary, PowerPaste is an imperfect substitute. It has a lower energy density than diesel, which means that some cargo capacity would be lost. PowerPaste is also not really liquid, but instead a kind of paste, so it must be delivered in recycled canisters for small vehicles.  The price will be modestly higher than diesel, even years from now.

Still, PowerPaste is an acceptable substitute for diesel in all cases. It has enough energy density to be used in long-haul trucking, ships that cross oceans, airliners, tractors, and other cases. PowerPaste would be an acceptable substitute in all of these cases with only a modest loss of cargo capacity. Furthermore, PowerPaste could have a tolerable price, not much higher than we pay for diesel now. It could be sold in ordinary refuelling stations, similar to gasoline stations. It is a can-do solution which will work in all circumstances where we use diesel now, despite its modest drawbacks.

To be clear, I’m not certain that PowerPaste is the solution that ultimately will be used. There are many ideas and suggestions for a replacement for diesel. We could use biofuels, synthetic e-fuels, ammonia, or other options which have not been devised yet. As a result, I’m not certain that PowerPaste will be the option ultimately decided upon.

However, there is at least one obvious, acceptable substitute for diesel in all use cases.

Our industrial civilization has vastly more time than needed to transition to it, before oil is exhausted from the ground. The transition to alternative energies and fuels has begun long before it was necessary, and there are obvious substitutes for all uses of diesel and other fossil fuels.

Semi trucks have many options for fuel

Recently, the energy decline movement has proposed a new idea: large semi trucks cannot run on any fuel other than diesel. Only diesel offers the combination of high energy density for long hauls, and high torque for heavy loads. Battery electric trucks do not have sufficient range for long hauls, and gasoline engines do not have sufficient torque for heavy loads. Only diesel offers the combination of high torque and high energy density which is required for long haul trucking.

This idea is found in this video (25:00), and also other places in this movement. The idea is part of a broader claim within this movement that long-distance trucking will imminently be disrupted because of energy shortages. This idea means that peak oil will cause a decline or even collapse of supply chains. Heavy trucks cannot be transitioned to batteries or other options as oil declines. Furthermore, driving EVs as personal vehicles would make no difference because the gasoline freed up thereby cannot be used to power heavy trucks. Heavy trucking will decline along with oil regardless of whether passenger cars are EVs or not.

In particular, the video above claims that gasoline is not suitable for heavy trucking because of a lack of torque. Large diesel truck engines often produce 1,500 ft-lb of torque, which is several times higher than even the largest gasoline SUV engines. This amount of torque is necessary to haul heavy loads, so gasoline engines cannot do it. Or at least, so goes the claim.

This idea is not correct. Heavy trucks could easily run on gasoline or many other fuels. The torque of gasoline engines could easily be increased using a simple gear reduction. A simple 3:1 gear reduction would increase the torque of gasoline engines (and decrease the RPMs) so that the torque is far higher than a diesel engine. A gear reduction decreases RPMs and inceases torque, which is one of the main purposes of the transmission in almost every motor vehicle. 

No combustion engine has enough torque to carry heavy loads if it's connected directly to the drive shaft. Neither diesel engines nor gasoline engines could do it. For this reason, a transmission is required to increase the torque of the engine, both for diesel and gasoline engines. Gasoline engines simply require more of a gear reduction, that's all. As a result. it’s obviously possible to increase the torque arbitrarily by using gears, after which, gasoline engines could easily be used to power heavy trucks.

Large semi trucks frequently already have 2 (sometimes 3) separate transmissions in series, with 12 or more separate gear combinations. Adding another simple gear reduciton would only modestly increase the complexity and wear of the transmission.

There is also another way (besides gears) for semi trucks to run off gasoline. We could use gasoline-electric trucks, where the engine is not connected to the wheels at all. The gasoline engine drives a generator, which generates electricity, which powers an electric motor and drives the wheels. This kind of setup is already widespread and is used in almost all locomotives, many large articulated city buses, and a few passnger cars (Mazda MX-30 and Honda Clarity). In these vehicles, the torque of the engine is completely unimportant because the engine is not connected mechanically to the wheels. In this case, only the power of the engine is important, and even some big SUV engines have sufficient power to drive a large semi truck.

This issue is important because EV adoption is growing rapidly and could cause a reduction in gasoline demand. This would mean more fuel is available for heavy trucking, if necessary. This could extend the amount of truck fuel we have for decades or centuries. Even after oil has peaked and declined by half, after 80 years or more, the amount of fuel from oil for powering trucks could remain the same or even increase if we switched to EV passenger cars in the mean time, because driving EVs would free up gasoline to be used by heavy trucks if necessary.

In addition to gasoline, there are many other possible fuels for heavy trucks. Natural gas can be used to power heavy trucks, and there are already more than 100,000 heavy trucks in China which are powered by natural gas. Coal could be converted into synthetic diesel, and this has already been done on an industrial scale. Battery-electric trucks could be used for long hauls by stopping to recharge once during the day. Finally, there is even another energy option for trucks. Gasoline could be used in existing turbines for electricity generation at power plants, and the natural gas which is freed up thereby could then be used as a truck fuel. Natural gas heavy trucks are already available and in widespread use.

In summary, there is a vast amount of fuel available for heavy trucks. The diesel they currently use is only a small slice of the total fuel available. There are many fuel substitutions which could be done easily if there were any reason for it.

This issue is important because it has implications for the future of long-haul trucking. Gasoline demand could very easily decline enormously over the next few decades because of EV adoption, which already has a 25% market share globally. Coal and natural gas usage could also decline substantially because of widespread renewable penetration. If usage of gasoline, coal, and natural gas declines to a low level, then the remaining fuel in the ground could be enough to power heavy trucks for many centuries.

Of course, it's possible to power heavy trucks using renewable energy. It could be done using battery-electric trucks and either battery swapping or periodically stopping to recharge. We could also run trucks from renewable energy by manufacturing synthetic fuels using carbon from the air and renewable electricity. And there are other options.

All these renewable options are inferior substitutes to diesel, at present. They are either too expensive or have drawbacks like frequent recharging during long truck hauls.

However, the price of renewable energy continues declining over time. Even synthetic fuels made from renewable electricity, which are currently far more expensive than diesel, may become cheap before we are forced to transition heavy trucks away from fossil fuels.

In any case, this issue poses no threat whatsoever to industrial civilization. Even inferior substitutes will be used if necessary. Even if it were necessary for all heavy trucks to be battery-electric, it would be done. Truckers would simply be paid more to stop and recharge several times per day. Even if we were forced to use synthetic diesel made from renewable electricity, and the price were 3x higher forever than diesel is now, and there were no other options, it would still be done. It would imply a modest reduction in standard of living because of higher shipping costs, and a switch back to rail rather than freeways because of much greater energy efficiency of rail. There are obvious substitutes in all cases, no matter what, and we have vastly more time than is necessary to manage a transition.