A new study from author and Stanford University lecturer Tony Seba has raised eyebrows in the Canadian oil patch. He forecasts that by 2030, electric vehicles will account for 95% of the miles traveled in the U.S., which is the sole market for Canadian oil exports.
As if that prediction isn’t remarkable enough, Seba said global oil production will fall from 100 million barrels per day (MMbbl/d) to 70 MMbbl/d, which, if true, would possibly devastate the high-cost 2.7 MMbbl/d Alberta oil sands industry.
The trigger for what Seba calls
“one of the fastest, deepest, most consequential disruptions of transportation in history”
will be the perfection of electric vehicle (EV) self-driving technology. Companies such as Uber and Lyft will buy fleets of autonomous cars and charge users to ride, a business model known as “transportation as a service.”
After more than a century of private auto ownership, families and businesses will give up their cars because transportation costs will simply fall off a cliff, said Seba, who co-authored “Rethinking Transportation 2020-2030: The Disruption of Transportation and the Collapse of the ICE Vehicle and Oil Industries” with Bryan Hansel and James Arbib.
The new way of getting around town will be 4x to 10x cheaper per mile than a new car, and 2x to 4x cheaper than a paid-off vehicle, with the average American household saving a whopping $5,600 annually.
In an interview, Seba said that under the right conditions, he can even foresee
“free transportation” supported by advertising revenue:“There is nothing magical about it. This is driven by the economics.”
The economics are that at present, Americans use their vehicles only 4% of the time. The study estimates transportation-as-a-service companies will have their EVs on the road earning money at least 40%—and maybe even 50% to 80%—of the time.
And EVs will seemingly run forever, lasting 500,000 miles while requiring far less maintenance and repair than internal combustion engine (ICE) autos, whose life on average is only 140,000 miles.
“Many automakers are working on million-mile electric vehicles, which drives down costs even lower,”
Seba said.
As fewer cars travel more miles, the number of passenger vehicles on American roads will drop from 247 million to 44 million.
Read more: E&P