Peak Oil and Peak Auto
We are entering the end of fossil fuels as our primary energy source, and a significant reduction in the number of cars on our roads. It’s not going to happen suddenly or quickly. Both will continue to grow in the near future, but Peak Oil and Peak Auto will occur.
Peak Oil is the year when the peak amount of oil will be pumped out of the ground. In subsequent years that amount will start its downward trend. I think that will happen between 2030 and 2035. The sooner peak oil happens, the better.
There are several dynamics affecting this. First is the knowledge that our climate collapse is being triggered by GHG emissions, so the continuation of the carbon combustion complex needs to be wound down ASAP to prevent further warming. Second is the rapid increase in global capacity of clean energy which has grown 90% since the year 2000. Third is the fact that wind, solar and hydro are all now cheaper than coal, oil and gas.
These dynamics vary in different countries and regions of the world. Some countries are closing in on 100% clean energy, and there are 40 countries that have clean energy as a majority of their electrical power.
Peak Oil is the last year that oil production will increase… after which production levels will decline more or less continually through several decades.
After the Peak
The majority of humanity understands that swearing off fossil fuels is a major, urgent first step in righting humanity’s relationship with Spaceship Earth. The need is widely known and accepted. Politicians are finally taking notice.
The amount of investment in clean energy is rapidly accelerating and, since 2016, has been greater than investments in fossil fuels. Many countries (and some US states) have mandated that only electric vehicles be manufactured and sold by the mid-2030s.
The electrical energy that is generated with fossil fuels is about to plateau and then decline in the second half of the 2020s. Many industry pundits believe that Peak Oil will be decades later. I am clear that it will happen in the first half of the 2030s.
In the future humanity will be much less reliant on fossil fuels (coal and oil in particular) than we are today. We are rapidly moving in this direction, and the movement to that future is accelerating.
Peak Auto is a far more complex scenario. Peak Oil is based on trends that have been accelerating for the last 20 years. Peak Auto is based on some of those trends, plus others that are far more conditional on government policy, technology and storage breakthroughs, and the ability for all auto companies to successfully convert from ICE vehicles to EVs and then Autonomous Vehicles.
Peak Auto is the year that the greatest number of cars are on the road globally. The year following will have fewer cars on the road. This decline will be slow yet steady and will continue for decades.
Think about the automotive industry today. It has produced and sold exclusively ICE (Internal Combustion Engine) vehicles for a hundred years. Landscapes around the world are dotted with gasoline stations. This IS the reality, and numerous generations have grown up within that landscape. It’s difficult to imagine anything different.
I predict Peak Auto will occur about ten years after Peak Oil… so between 2040 and 2045.
As I wrote in a column about a recent auto conference I spoke at, I think that by 2030 some 70% of all US auto sales will be EVs. In addition, I expect the 2030s to be the decade of Autonomous Vehicles. They will come to market in the 2020s but will not scale up until well into the 2030s. It is this dynamic that will affect Peak Auto more than any other trend.
Autonomous vehicles will lead to fewer cars on the road. The key statistic you need to know is that Americans drive their cars (depending on the source) from 5% to 10% of the time. So the cars are parked and idle 90% of the time. Think about that. The second biggest investment most households make, after the purchase of a home, is a car. Would you buy a primary residence if you knew that you would live in it only 10% of the time? Of course not! But you buy a car that is used only 10% of the time.
I recently moved from a single-home community of 103 houses. Each one had at least a two-car garage and some had three-car garages. My guess is that there were some 200 vehicles in the community. In a future of autonomous vehicles, this number might drop down to 25 or 30 driving for 22 hours a day (picking up passengers via an app and stopping to charge for an hour twice a day). The number might be as much as 50 cars as some folks will keep their EVs and not rent/use AVs. So the total number of cars will drop by about three quarters.
As a futurist with an environmental reputation, I have frequently been on panels or fielded questions about the future of green transport. One of the top responses I hear is that we need a lot more “light rail”. That’s not viable in the U.S. Why?
In 2015, I took a 200+ km/h train at the Shanghai train station. I wondered out loud why the U.S. couldn’t do that, and my guide said, “In China, the government owns all the land.” It was an aha moment. Of course! Why have successive governors of California been unable to build light rail from SF to LA? Because of the patchwork of land ownerships and rights of way throughout the state. So the answer to the question about what infrastructure is needed for 21st century transportation is simple: the current Interstate system but with drastically fewer vehicles!
In addition, there has been a surge in ride-sharing with companies like Uber and Lyft that have conditioned city dwellers that there’s no need for a car.
Based on the assumptions that governments of the world are for lessening the use of fossil fuels, and are in support of the fleet conversion from ICE to EVs, the lift-off of sales for Autonomous Vehicles in the 2030s, and the increasing current trends of working at home, I think that Peak Auto will occur in 2040.
In 2040 there will be more cars on the roads of the world than any year after. How fast that number declines from that year is too difficult to state with accuracy today.
A big factor in the automotive market is our climate crisis. A cliched image of climate is CO2 exhaust coming out of a tailpipe. Low MPG is bad. Hybrid and EV are good. Biking, electric bikes, ride-sharing and walkable cities are all on the upswing as people try to live more sustainably. This leads to households having fewer cars.
In the future humanity will be much less reliant on fossil fuels, coal and oil in particular, than we are today. There will be many fewer cars on the road and the vast majority of them will be electric, recharged with renewable energy. In less than 20 years our environment will be much cleaner and quieter… with traffic jams occurring rarely. Something to look forward to.