A convergence of three trends – Ride Sharing, Autonomous Driving, and Vehicle Electrification—will offer big-city dwellers cheap, convenient transportation, transforming the automotive industry, says a report by the Boston Consulting group.
The report concludes By 2030, 25% of Miles Driven in US Could Be in Shared Self-Driving Electric Cars.
BCG’s key insight is that the convergence of three trends—ride sharing (services such as Uber and Lyft), autonomous driving, and vehicle electrification—create a far more compelling economic case than any of these forces alone. Due to their ability to cut travel costs by 60%, shared autonomous electric vehicles (SAEVs) could shift about 25% of miles traveled from private automobiles-—creating enormous benefits for consumers as well as causing major disruption to the automotive industry. While total vehicle demand will only be affected slightly, by 2030 more than 5 million conventional cars per year could be replaced by a combination of fully autonomous electric vehicles for urban fleets and partially autonomous cars for personal use. Cities will benefit from less congestion and cleaner air, but could be disadvantaged by falling ridership on public transit, fear of which could result in some cities proactively trying to regulate the number of SAEVs on the road.
“Such an evolution in mobility is no longer a fantasy. The technology exists and our research shows that many consumers will embrace it,” said Brian Collie, a Chicago-based partner who leads BCG’s automotive practice in North America. “Yet few players are taking the bold steps needed to position themselves to thrive in this not-too-distant future. The time to act is now.”
SAEV is an apt acronym for these vehicles, as fleets would save time, money, and lives. By using SAEVs, a typical Chicagoan who owns a car and drives 10,000 miles a year could cut the cost of travel from around $1.20 per mile to around 50 cents per mile. Over the course of a year, that could put more than $7,000 in that driver’s pocket—effectively doubling consumer discretionary income.
Radical Shift Will Be Concentrated in Large Cities
BCG’s conservative estimate is that 23% to 26% of miles driven in the United States, or about 800 billion to 925 billion miles, could be traveled in SAEVs by 2030. The shift to SAEVs, which would be gradual and would begin by the early 2020s, would likely occur in cities with more than 1 million people, where there is sufficient demand to keep fleet utilization high and there are significant pain points associated with private vehicle ownership (expensive insurance, difficulty finding parking, and congestion).
Shift Will Have Massive Impact
While total vehicle demand isn’t likely to change materially, the types of cars required will be vastly different. BCG estimates that in 2030, a total of 4.7 million autonomous electric vehicles will replace 5.1 million conventional autos sold in the US. This shift undermines the current industry business model, with its focus on engine technology and its long product cycles, and opens the market to a range of new competitors. Hundreds of billions of dollars worth of industry assets could turn into liabilities. Dealers will be less relevant as fleets make up a much bigger portion of sales.
The economics of shared autonomous electric vehicles makes them competitive with public transportation for short trips—and more convenient (no schedules, door-to-door service). According to BCG analysis of traffic patterns and “pain points” of mass transit riders in Chicago, as many as 20% of public transit miles could shift to the new transportation mode.
Additional effects would include a sharp drop in fuel demand—an impact looked at in depth in an upcoming comprehensive powertrain study by BCG. And the sharp reduction of traffic accidents and related injuries from autonomous and semi-autonomous vehicles could reshape the auto insurance business.
Your Last Car
The study concludes “The next car you own may be your last.”
I believe the consulting group has the idea approximately correct, but they are likely a bit on the low side of things. Long haul trucking miles will vanish first, en masse, and quickly.
The faster and cheaper battery technology becomes, the quicker the transition to electric from gas.
Ownership Model
Adoption will become quicker in big cities than rural areas but by 2030, the driving model, ownership model, and insurance models will have undergone massive disruptive change.
Consider suburbia. Many people drive their car five days a week to a train station. They catch a Train from a place like Crystal Lake, Illinois to downtown Chicago. Their car sits on the train station lot for 10-12 hours, waiting for the return trip back home.
I did that train trip for years, between those exact locations.
The cost for such convenience is $20,000 to $40,000 vehicle, plus insurance, plus maintenance, plus gas. With driverless cars, does that model make any sense?
Car ownership will go from 2 per family to 1 per family in suburban areas and from 1-2 per family in large cities to 0-1 per family.
Think about car maintenance for a bit. Instead of driving to the dealer, then sitting in the waiting room for two hours, you can have your car drive itself to the dealer then drive itself back home to you.
Car Dealerships? Who Needs Em?
Do you need a car dealer? Why not a super-service center where trained mechanics can work on any model? Most diagnostics are electronic and most maintenance (oil changes etc.), are routine.
Really want to buy a car? Take a test drive of whatever model you want, then pick your color, and a new car with your specifications will drive itself to your house.
In Crystal Lake, Illinois, population 40,388, there are 15 dealerships.
Crystal Lake, Illinois Dealerships
I did not count the U-Haul or Fox Motor Sports. Will a town of 40,388 need 15 car dealerships, 6, 2, or none?
Driverless Revolution at Hand
Those who tell me they see “no need for driverless” have not bothered to think.
The suburbia train model, the maintenance model of saving hours sitting at the dealer, the ability to easily share a family car, driving for the visually impaired, night driving, drinking and driving, etc. are among the numerous reasons those panning the idea will soon embrace the technology.
The opening salvo in the driverless revolution has already been fired. By 2022, major disruption will be visible. By 2024, long-haul truck drivers will vanish. By 2030, no doubters will remain even if drivers are needed for some specific applications (mainly off-road).
For further discussion, please consider Second-Order Consequences of Self-Driving Vehicles.
Mike “Mish” Shedlock
I agree that you must be careful about buying a new car because of emerging technologies and that for urban drivers owning a car makes less and less sense as autonomous technologies become more common place. I don’t think that SAEV is an appropriate acronym because autonomous cars won’t be electric–at least not battery electric. These cars have too much down time due to charging to be practical. That’s why cabs aren’t BEVs.
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Cheaper and better batteries for cars have been a Holy Grail for almost 100 years now…
I see nothing changing that slow painful march to replacing the internal combustion engine anytime soon…
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“Those who tell me they see “no need for driverless” have not bothered to think.”
Right. Every reader either must be a boomer or must know a boomer. 10+ years from now, boomers will be very happy to have an alternative to giving up their keys.
As for the pessimistic outlook for batteries – may turn out to be true, but wonder if this person was equally pessimistic about oil production (then along came fracking)?
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Hydrogen is making decent strides.
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… getting those fill-ups presents the biggest obstacle. Fueling stations cost up to $2 million to build, so companies have been reluctant to build them unless more fuel cell cars are on the road. But automakers don’t want to build cars that consumers can’t fuel.
http://www.chron.com/news/us/article/Hydrogen-fuel-cell-cars-creep-up-slowly-11070245.php
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Another pie in the sky utopia prediction. This is still a pipedream right up there with solar paneled homes. I am still a skeptic for more reasons than are given for making this happen. As I said before electric and driverless cars have limited metropolitan uses only.
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Well the world is urbanizing rapidly.
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Out in the country, this sort of thing would have limited attraction. But in big cities, it would just be a streamlined system of Uber, with all kinds of nanny State aspects. If you love collective living (I hate it), you can share your car, your schedule, etc. In the long run, we will have two societies…
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Most Europeans live in congested urban areas and most Europeans pay double (triple?) the price Americans pay for fuel. Electric cars are perfect for Europe and they will recharge each night with the excess power that is currently generated (think of the French nuclear plants). Governments will try and recoup the lost fuel taxes but they will be battling the green vote and the nationalist vote (no more buying arab oil). So this will take off in Europe first and the rest of the world will follow shortly behind.
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“Think about car maintenance for a bit. Instead of driving to the dealer, then sitting in the waiting room for two hours, you can have your car drive itself to the dealer then drive itself back home to you.”
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Why own your own car at all? Why worry about maintenance? There are few moving parts in an electric or fuel cell car compared to IC anyway.
What if a pool of new cars was were always available within say 10 minutes of your home? When you need one use your cellphone to ask for one through an app.
Talk about disruption! If car ownership goes away it kills a large amount of related jobs and industries from car dealer, to mechanic, to parts stores, to insurance to gas stations, etc..
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Because some people don’t want a car that smells like pee…
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do avis and hetz rentals smell like pee ?
Do Car2Go and other car sharing services smell like pee ?
If you want to keep spending $10,000/yr. owning a private motorcar, go right ahead. The rest of us will spend 1/4 that amount for mobility services.
And we won’t have to waste 400sqft of house on storing big hulking machines that are used a couple hours each day. that’s worth nearly $40,000 in my neighborhood.
keep merrily pissing away your time and money. the rest of us will be laughing all the way to the bank.
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I earn $2000/week and don’t own a car as I hate wasting the money I earn (plus walking keeps me fit). Tomorrow I will need a pick up to move a heavy item from another town. The hire is $58 for the day and will be the third time in the past year that I’ve hired a pick up (and they have never had the smell of pee). So how much is your fear of a car smelling of pee costing you each year because I save at least $10000 a year by not owning a car.
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Spot on. BMW own figures suggest just about 5-10% utilisation figure. Not only rapid depreciation but hardly really used. Massive amount of dead capital.
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Yes, just easier to take Uber or Lyft….and much cheaper.
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Most people don’t completely empty out their car after every trip. Leaving water bottles, sunglasses, some snacks, a gun in the glove compartment, dvds for the kids’ headrest screen, tennis gear and a folding bike in the trunk etc.
I’ve gone periods where all I use have been cabs (and more recently Uber), and it’s kind of limiting compared to rolling around in a crewcab with a slide in camper in the bed…. 🙂
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cheaper to pay for a hotel
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Assuming this comes to pass (since the Elitists are obviously pushing their UN Agenda 21 to herd us into densely populated cities), how do all the former auto industry manufacturers, mechanics, lenders, insurance agents, DOT employees, road builders and maintainers, car washers, gas station attendants, etc. pay for a ride to do something they can no longer afford to do?
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They become programmers, web developers or biochemists, of course! [lol]
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Why not brain surgeons and nuclear physicists…..heh
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Phoenix, a great many of those occupations are going away anyway through degrees of automation. Not owning a car may be the only way to achieve mobility as it can avoid the depreciation and low utilisation of owning a car that costs.
No one can easily predict the outcome of all this.
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UN Agenda 21 got pushed off to UN Agenda 30. Obama’s 54.5 MPG CAFE standard starting in 2025 would have ruined the internal combustion auto industry by design. Trump recinded that Axecutive Order per his Executive Order last month, although I don’t know the legalities of these Orders. Seems to me that Congress would have to act on them in some way.
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Mish,
This just isn’t going to work. Every 500,000 cars requires a new generating set at a power station. This is going to require scores if not hundreds of new power stations, who is going to build them, what fuel are they going to run on? Additionally, something no one seems to mention with electric cars is, how safe are they when you are sitting in an electric field double the field of your electric meter at home. No one can set next to that for hours on end every day without a serious health risk.
Jim
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Be forewarned
What you say cannot work will be working for all to see by 2024
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Jim
charging overnight does not require any new power plants , existing grid is finec
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Study shows fin blogs will become authorless by 2030 as even monkeys can pull shit out of their ass and fling it.
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Autonomous cars can improve safety, and are especially helpful to the elderly. If we had a gold standard, people might have additional purchasing power from ride sharing. However, bankers are likely to use ride sharing as an excuse to confiscate additional goods, to feather the nests of financial sector players. Because of bank printing, Joe average continues to move slowly backward regardless of improvements in technology.
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Granted, many people won’t be able to afford a car so autonomous ride share may be needed for that reason alone.
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Would I get into a driverless taxi? Yes
Would I own a driverless car? No. What’s the point? I like to be in control of the vehicle and there’s a degree of pleasure in driving for many people too.
Who would own a driverless Porsche?
Unless governments banned driver operated vehicles outright they will still be around 50 yrs from now.
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“…Who would own a driverless Porsche?….”
dentists going through a midlife crisis just the same as today
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They do seem to be the ones slamming “driverless” Teslas into stuff with the most vigor…..
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suburbia and interstate highways were a result partly because of the nuclear age where inner cities could be leveled in a nanosecond , hence the ghetto formed and those with money bought 2 cars and moved an hour away. what’s changed? who cares who is driving? or not.
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All sounds great but I doubt that I’ll be owning a self-driving car. When I need to get somewhere, I’ll just connect to Uber – or whatever emerges from its carcass – and they can come pick me up.
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But what they send might not have a driver.
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Good. It should be cheaper and won’t expect a tip.
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I remember Walt Disney Presents (television program) in the mid fifties telling us the joys of automated travel. Popular Mechanics and others of that ilk devoted a good many articles by “experts” about the driverless automobiles and buses and trains and maybe one day, airplanes. So here it is sixty years later and the future is just around the corner just as it was in 1955. The futurists back then made a great many predictions about the future, very few of which even came to pass. The trend or tradition, you choose, has not changed. Television was going to be the big boom to education and bring culture into the classroom and living room. I guess “My Mother the Car” was so educational and successful that it had to be brought back as a reminder of the power of the future with “Knight Rider” or whatever that was. Time must be near for another such series since current public memory is rather dim on the subject. But perhaps the best joke on the futurists was “Silent Running” where the ships crew ate synthetic crap while one of the crewmen actually grew real food.
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Because computing power in the 50s is identical to modern computing power and other technologies. Facepalm.
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Computing power is a relative quality. One must understand that computer architecture has changed over the years. But programming is still relatively linear. True, one can make the argument that object oriented programming has changed that but not really. AI claims to have made inroads to the human ability for problem solving but the problem there is that it reflects the programming quirks that humans have given it rather than any anthropomorphic ability of machines.
So we build more powerful computers. I started programing on an IBM 360/20, a 64 bit computer with 16k memory. Had to cut my one IBM cards on an 026 keypunch and use the JCL cards to run the job. Load the JCL cards into the hopper and then the compiler and then your program and then your data. My how times have changes. Last bit of computing I did was command line C and Unix. But it is still logic. If the logic is bad the results are bad, pure and simple. No matter what the advances in computing that is still the standard.
So now we look at the problem of automated vehicles. One either embeds sensors in the road way or one uses optical pattern recognition, a more difficult solution. Frankly, embedded sensors are more reliable and a bit or radar adds to the reliability. Add to that the reliance on multiple processors to keep tract of the vehicles on the road and then we can talk about reliability. Of course the problem with optical pattern recognition is that it is far more susceptible to error in that not all patterns can be successfully recognized. A couple of deaths from such automated vehicles and we will see great restrictions place upon them for the simple reason that lawsuits tend to be expensive and eat into the bottom line. Mish, on the other hand, is too enamored of this new technology to think it through properly. Like so many new technologies, there is the promise of something for nothing. Cell phones were suppose to give us new freedoms and look what we have. Addiction to constantly checking for texts and connection to the internet for all the garbage it offers at a price that is at least four times the price of a land line. What have we really gained with cellular technology?
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But computing power in the 50s, were much greater than 70 years prior to that again. Yet automated carriages somehow failed to materialize….
What’s driving the current Nightrider fantasy, is less about computing power, than about cheaper sensors. The latter is what allows devices some awareness of their environment. But attempting to go from there to reliable autonomy, still requires dealing with the exponential complexity of integrating input from all those inputs and translating it into reliably “correct” actions. And, as williambean2014 points out, people’s ability to do that, has not grown all that fast.
Someone have to program a response to every little complexity into the robots, after all. Which, as Honda has found out with Asimo, is reasonably quick to do in a highly controlled setting. But becomes essentially impossible, if the environment is complex enough.
And “complex enough” doesn’t have to mean that complex. Look at those robotic vacuums. I have, and have had a few. Know some working on them. There is money in those things. Plenty enough to entice someone to take a break from his job at Tesla/Waymo/Otto and disrupt that whole industry, if the latter sat on some fundamental technological breakthroughs that could dramatically improve the dustbots’ function. But they don’t. The algos they use, are largely within a linear bruteforce more powerful than those in a robovacuum.
It’s the same problem in software development. For all the hype about AI, AIs can’t build software for anything but the most narrowly constrained optimization problems. If they could, they would. The idea-to-implementation cycles in software running on existing devices, is orders of magnitude faster than for anything requiring mechanical devices to be developed alongside the software. Hence, any “advances” in “our” ability to program for open ended complexity would show up there first. Yet, we’re still stuck trying to figure out even basic web shopping bots much more complex than Ebay’s bidding process.
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“By 2024, long-haul truck drivers will vanish.”
Since retiring last year, we have spent about three months of the year in our RV in the domain of the long-haul truckers and plan to continue doing so as long as the Lord is willing and the creek don’t rise. I have this statement taped to the wall in the RV so I don’t forget it and will verify it by first-hand observation.
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Just remember that the trucks will still be there, but not the truckers.
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The autonomous ones won’t be hard to identify with all the sensors and no driver as we pass them (uphill) or they pass us.
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People who make pronouncements about the end of truck driving jobs by robotic trucks have never driven truck. They love to point to the interstate system and how easy it is to move robotic trucks along it’s corridors. When was the last time you drove I-95 around New York City? The roads are bad and the traffic is worse. But more than that, one can’t begin to deliver goods by sticking to the interstate. Once a truck goes off the interstate and on to the US highways or the state roads or the county roads, trucking gets tricky. Aluminum ingots coming out or the Alcoa plant at Rockville Texas must travel Farm to Market roads to county roads to US roads long before the truck gets close to I-35. And then once one gets to Iowa one has to take a US highway and then a county road to deliver the ingots. Got a load out of Pennsylvania going to Utah? I-80 all the way until you hit Wyoming and the a US highway going through Flaming Gorge and across the dam. And by the way, no kingpin longer than 30 allowed across that dam. Whoops, what happened? It’s a truck route but it has restrictions. I can tell you all manner of problems with computerized routing for trucking and you know what? No one bothers to change the programs.
You might take half the van traffic out of truck drivers hands, but when it comes to specialized (flatbeds), you will never automate that group of trucking. Specialized makes up about a quarter of all trucking traffic. I am amazed at how many idiots experts who say they know truck transportation don’t.
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The long empty stretches, is where Otto were planning to go live. Before the ambulance chasers realized they wanted to get their grubby fingers on some/most of the fresh print that is floating around that industry.
Even if all that results, is the ability for a driver to do his sleeping while his truck is moving through Nevada at night, rather than stuck at a truck stop, the efficiency gains can quickly make up for the ever cheaper sensors required to keep the truck on the road in that limited setting. Maybe. Until it’s tried, noone really knows. “Studies show” is, after all, nothing more than the progressive indoctrinates’ version of David Koresh saying: God Says…..
And then, the driver can take over when things get more complex.
The notion of complete autonomy in unrestricted shared space with humans, is just silly from the get go. Just try even wrapping your head around getting a fleet of robotic copcars, engaged in running gunbattles through a dense urban core, to make the “correct” driving decisions for those situations (and heck, why not shooting decisions…).
Reality is, though, that a huge part of the complexity that prevents automation of a large share of transport, could be dealt with by segregating the parts that absolutely need to be done in unrestricted space, onto the equivalent of closed off rail. Automating a subway train isn’t that hard, after all…. Putting “automated” rigs on I80 or similar, is a necessary first step in discovering where the real pain points are. As well as where the lowest hanging fruit for segregation/application of limited autonomy vs driver operation is.
Which is a necessary first step, since listening to a bunch of “futurists” doing “studies,” and half literate banksters and VCs, moves the ball exactly nowhere in the right direction.
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It’s all about exception handling. Did you know that the roads freeze at 27 degrees F? Anti-lock/anti-skid brakes are of no use in a semi or a four wheeler in that kind of weather. Once you lose traction you will either skid out of control or jack-knife. Illumination also affects the optical sensors and can fool the computer into making the wrong choices. And would you trust an automated semi hauling a combine (14 feet wide load) to do so by itself? I can tell you how difficult that is having done it for a few years. Would I want to take a nap in the bunk while the rig was on auto pilot. I am not that trusting of machinery. Every year a few truckers die on the road when they have stopped for the night in twenty degree below of worse weather. Know why? The damn fuse that controls the idle while the truck is stop will burn out at the most inconvenient time. I’ve had to deal with that problem four times in my driving career. Thankfully it wasn’t that cold at the time. And the company won’t let you have a spare fuse (special item) to keep in the truck. All these little things happen all the time. The average truck driver normally drives from 115,000 to 130,000 miles each year. Think about that for a minute. That is about four times the average four wheeler going back and forth to work. That means the average hours of wear and tear on the tractor each week about sixty hours. With an automated tractor, that average time will run closer to 100 hours a week. But what do the experts know? Then there are the road conditions, the driver traffic, the construction and repair work, the weather, and a hole host of other factors. Do you know how difficult it is the handle a semi when you blow a tire whether is a driver, a steering, or a trailer tire? Of course if you are tooling along in a passenger vehicle and blow a tire doing 70 mph, that can really upset your day. but imagine if it is a “smart car”, a driverless machine. You will be at the mercy of the computer and how well it was programmed. Yeah, all that money chasing shortcuts to the big payoff. Technology has limits.
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Autonomous trucks will certainly need to be driverless. No way am I going to sit in the cab in front of 80,000 lbs going down the Grapevine in the rain, being piloted by Windows 10! Just knowing the cheapest imported diode or capacitor would likely fail at the most inopportune time.
Never mind all the freaky traffic black swan things that can and do happen regularly, all the combinations of which likely can’t be programmed into a circuit board.
Oh, I forgot,,,bear markets and recessions are a thing of the past. Computers control the financial system now,,,,and they are infallible,,,,why not put your life in their hands as well? 🙂
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The Grapevine in the rain is a piece of cake compared to Wolf Creek Pass in a snow storm at ten below. Keep the jakes on and the gear low, very low.
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http://g1.globo.com/rio-de-janeiro/noticia/video-mostra-momento-em-que-carro-explode-em-posto-de-sao-goncalo-rj.ghtml
I vote for nat gas cars… makes the best video when something goes wrong. This was last week.
Watch the attendant 40 seconds into the video (leaning on passenger side of car -partially blocked by date on screen). Amazingly he lived… driver no such luck.
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lots of things we own “sit” for hours without use. sometimes years. sometimes never used at all.
but we still buy insurance for disaster and/or government requirements. when i need a car so i can
get to the hospital, i want it in 15 seconds. and yes, i’ve only done that twice. worth every penny.
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Wheres the wealth going to come from to buy that many million-dollar+ self-driving vehicles? Where’s the trillion+ going to come from for infrastructure to support self-driving?
And if even a small chunk of the for-hire fleet becomes self-driving, compensation for the remaining drivers will drop like a rock, damaging economics of self-driving even further.
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Autonomous vehicles are inevitable because their benefits are so significant. It doesn’t matter how they are powered (gas, diesel, natural gas, electric, fuel cell, or any hybrid combination). What does matter is that companies and individuals will adopt this technology because it will be in their best interests to do so.
We already enjoy cruise control, lane assist, blind spot sensors, backup sensors, collision avoidance, automatic parking, GPS systems, etc. Soon we will be enjoying personal autonomous autos that can drive much more safely than any human, even in rain, snow, ice, fog, and darkness, which will save us time, money and lives.
Companies will save a lot by reducing the cost of drivers in many situations. This has been going on for a hundred years in all industries. Its called progress. And it has created far more jobs than it has eliminated. Today, there are over 3.5 billion people employed in the world. This is ten times more than a hundred years ago.
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This will be different. Humans have been in control of transportation devices for much longer than 100 years. This will truly be a major shift.
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If all this comes to pass (which I believe it won’t) go long bicycle stocks in 2027. Car sales will plummet and bicycles will be used for short trips to the store and around town.
Wouldn’t it be cool if they developed an autonomous bicycle to compliment the autonomous car?
Big US cities will resemble Shanghai.
How ’bout autonomous husbands and wives? Don’t laugh.
Hope I’m gone by the time all this nonsense goes viral. If not, I’ll choose to be a shut-in.
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Autonomous bikes and running shoes, unfortunately looks to be the only way to get the average American to do some “exercise.” “…But doctor…. what do you mean I can’t sit on the couch eating bacon? My autonomous bicycle rode 40 miles yesterday…..”
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I think this is just a pipe dream. It’s predicated on cheap energy and we already are well beyond the surplus we used to get from a barrel of oil. 100 to one is now about 11 to 1. The energy cost is nearly 10 times what it was.
If we are to survive extravagant energy projects will have to be eliminated. This is bad news for renewables. They cannot be economic in these conditions. Already we have started seeing maintenance neglected. Lots of our essential infrastructure are from a century ago, overdue for renewal. Etc.
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The adoption of autonomous vehicles will reduce energy use significantly for the following reasons (and many more).
The number of vehicles on the roads will decline because of better use of each vehicle.
As a result, fewer vehicles will need to be manufactured (plus by dramatically reducing accidents, fewer repairs and replacement vehicles needed).
Vehicle flow on the roads will improve (imagine no traffic jams, no traffic lights, no stop signs) reducing energy consumption.
Less traffic means we no longer need to add more lanes to existing roads, and roads will last longer, needing fewer repairs. Parking spots would disappear and the road areas used for parking could instead be used for traffic such as bicycles.
Improving technology in every area of our lives will reduce energy consumption and at the same time improve on the cost/benefit of renewable energy (solar etc.).
That is why energy costs will drop over time. And energy is the driver of growth in our standard of living. Thank you technology!
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The improvements you note will be too little and too late, unfortunately for us.
I don’t think we have a handle on the actual size of the energy input into the world economy. Wiki has an article on the Cubic Mile of Oil concept. Total of all sources is close to 3 CMO today, of which petroleum alone is more than 1 annually. Renewables are like a few coats of paint on the “container”
Since we have to grow to keep the economy working, the IMF world forecast of about 3.5% will have us double the size of the economy in just 20 years. That says that in 20 years the total worth of the economy back to the bronze age will be produced again. Utter madness!
Technology won’t make it better or more achievable, It will make it worse.
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In the last 30 years I have read many predictions about the world running out of oil (as well as natural gas, coal etc.). I even believed these predictions as recently as 20 years ago. However, as we have seen, human ingenuity (ie technology) has allowed us to find and recover energy sources that were previously uneconomic (oil sands, shale oil, tight gas etc). Technology is also improving renewable sources like solar, while at the same time improving the efficiency of everything that uses energy (like vehicles, appliances, etc.).
Economic growth relies heavily on two things: energy and improved efficiency/productivity. Technology will indeed improve both of these things. Humans are incredibly resouceful.
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yes, there have been several peak oil false alarms, but the problem is not lack of oil it’s lack of surplus energy from oil. The oil will stay in the ground when getting it is uneconomical and uneconomical really depends on the economy able to manage it. Sheik Yamani said by 2030 any oil in the ground will stay there. I agree, because our civilization will have gone over the edge by then. We really are in the last stage, the age of decadence.
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I’m sorry, I just can’t make the connection between autonomy and less journeys demanded by people.
“Hey everybody, I won’t drive to the store today today to buy some milk and bread because ….. autonomy.” Huh?
My wife and I drive 3-7 kids round every week (as part of a lift club … car-sharing alert!) to various events, sports etc. How does autonomy reduce these journeys? They need to be made. Period.
The family wish to go off on vacation and we need to pack our SUV to the ceiling with clothing, camping gear, surfboards, fishing rods and autonomy assists …. how exactly?
If a journey needs to be made it WILL be made, whether by bicycle, horse-drawn carriage, by foot or by vehicle. The fact that a vehicle might be ‘self-driving’ is irrelevant.
Your claims are way too vague. Back ’em up please.
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please think beyond your own limited horizon.
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I just accused the other guy of being vague because he failed to provide a single example …
We appear to be at square one, still
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Limited access roads are built to simplify driving. No surprise if the leading edge of personal exoskeletons (cars) handle freeways first – especially the boring, brain-dead commute many people appear to endure.
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To ejhr2015: The cost of recovering oil continues to drop because of improved technology. Whether it is oil sands or shale formations, they are still operating well at $53 per barrel. As a result, OPEC has agreed to cut production to try to reduce global supply and maintain prices above $50. If oil is left in the ground in 2030, it won’t be because it is uneconomic, it will be because it won’t be needed. The price of all energy will stay reasonable for a very long time. Economic growth should continue at a modest 2%-3%% pace for a long time, with occasional dips (as has been happening for a hundred dollars years). The sky is not falling (assuming politicians don’t screw things up by starting wars).
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I have to say your realism is not as factual as you think. Renewables like solar panels don’t substitute for much oil. We “eat” oil. Agriculture needs oil more than electricity. Even if we save on gasoline we still need the other fractions like heavy oils for shipping and kerosene for flying. A hydro scheme to replace the energy equivalent of 1 CMO, is 200 Dams each as big as China’s 3 Gorges dam, an impossible task as there aren’t enough sites. Building renewables ADDS to consumption at least during the takeover phase, which would have to be at least 2 generations from now. Sorry, you really are not thinking it through.
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If 114 oil exploration and production companies filing for bankruptcy since 2015 is the definition of doing well, then drive on!
http://www.haynesboone.com/~/media/files/attorney%20publications/2016/energy_bankruptcy_monitor/oil_patch_bankruptcy_20160106.ashx
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Bankruptcies as a result of the glut of oil supply driving prices down below $40. OPEC had to cut production to try to get prices back above $50. We are still awash in oil. Never mind 2030. The oil is being left in the ground already, BECAUSE WE DONT NEED IT! Sorry, but I don’t buy your arguments. Every time prices rise a little bit, more oil comes flooding into the market because it is profitable. And every time prices drop, it spurs more tech advances to lower costs! As they say – the cure for high prices is “high prices”, and the cure for low prices is “low prices”.
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What are the tech advances that have lowered the cost of producing oil? Please quote some figures for the cost of production from conventional wells vs fracking shale, deep water, and oil sands.
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@Realist
I think you should have added a caveat or two to this statement: “Economic growth should continue at a modest 2%-3%% pace for a long time…”
The inference here is that the cost of energy is the only factor influencing economic growth. If you hadn’t noticed, we’ve actually enjoyed a substantial economic tailwind over the last 30 or so years amounting to $230trn of debt (globally). This tailwind though has now turned into a substantial headwind and, frankly, even the price of a barrel of oil dropping to $5 would do little to prevent the fairly obvious economic depression that is coming down the pike.
There are an awful lot of people out there who are resolutely ‘parked’ in the “Debt Doesn’t Matter” camp and if you are one of those I’d kindly suggest you change your moniker from ‘Realist’ to ‘Fantasist’ 🙂
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My growth comments were in reply to ejhr2015 who said civilization is going off a cliff because we are running out of cheap oil. Since we are actually awash in cheap oil, I believe the world economy will continue to grow at a moderate pace over a very long period of time (with the occasional slowdown as usual).
Of course there are many other factors that affect global growth, but the discussion was about oil in this case.
Regarding Bryant and his request for numbers to back up my claim of lower production costs for oil Sands, shale etc, these numbers have been dropping for the last decade and can be looked up yourself. I find it odd that there is even a question about this, as it is the main reason we are producing so much oil and oil prices have tanked.
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Cheap oil is just today. I’ll think you will find it will not last. It’s not just about the oil. That is just one factor.
Read this bog by Nafeez Ahmed. He disagrees with you;
View at Medium.com
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Okay. I read the report. It is not the least bit convincing. It reminds me of similar reports from 30 years ago that initially convinced me that peak oil was at hand. Then as events unfolded, it turned out to be wrong, as human ingenuity found and developed previously unknown energy resources.
He claims that fracking production peaked in 2015. He doesn’t mention that it was simply suspended when the price of oil dropped below $30. As the price has risen above $50, the rig counts are increasing and fracking production increases again.
It’s like all the books people try to get you to buy about: the Coming Boom, the Coming Depression, the End of Oil, the end of Cities, blah blah blah. Sensationalism sells. Malthus would be proud.
Sorry, but I don’t buy all this sensationalist nonsense.
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Maltus wasn’t wrong, just premature [by a couple of centuries]. Unfortunately it is now a zero sum game as our finite world is understood to really be finite.
I can’t change your optimism. It’s a natural human state, but it’s misplaced.
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Cheap oil has indeed allowed the economy tick along nicely but it cannot (on its own) drive the economy. The elephant in the room is debt — and it’s an elephant so large that, frankly, it dwarfs any benefits that cheap oil could hope to deliver to the global economy right now.
Your view of the world is way too blinkered. Sorry, but that’s the truth.
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I agree that debt is a very big issue. That simply wasn’t part of the discussion here. The discussion started with autonomous vehicles, which led to a discussion on energy, and oil in particular. Then to growth. If you want to keep going, you could talk about how Trump will start a war and destroy the entire world. Or how global warming will destroy life in the oceans, which will destroy all of us (screwed again!). But I don’t want to head off on wild tangents.
All I’m saying is that human ingenuity results in technology that creates such things as autonomous vehicles and cheaper energy. Both of these advances are huge positives for mankind.
Hopefully, technology will also help solve issues like global warming, lack of clean water, pollution, disease, or any other problem you care to mention. Technology is the answer to so many problems, and we need to embrace it, not reject it.
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I give up. I have gone back and read several of your posts on this thread and, hand on heart, I really can’t figure out what it is you’re actually arguing for (or against), other than jotting down some vague statements / thoughts.
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Vehicle sharing has actually been around for hundreds of years (subway, bus, taxicab, etc.), but strangely people who have a realistic choice seldom embrace it. If you are prepared to drive yourself there are already car sharing services such as Zipcar in many big cities.
Not sure how driverless electric cars really change the equation. How much does it cost to have some poor minimum-wage slob drive a bus/taxi/truck all day anyway? This guy is never going to be a surgeon or write computer software, so at the bottom line is it really cheaper to replace him with a machine and then have to support him and his extensive family from social funds?
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Twenty-five percent is a cowardly guess. The under thirties will jump on enthusiastically and the over sixties will be thrown on like it or not. If technology allows it, 75 percent will be driverless. If technology lags, less than ten percent will be driverless.
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Here are some numbers from an article in the Financial Post today titled: OPEC warns of a world that still has far too much oil.
The IEA reckons that 986 million barrels were added to inventory over the last 3 years. OPEC estimates 1.2 billion barrels.
OPEC sees a world with supply still running ahead of demand by 280000 barrels a day.
Global inventories increased by 430000 barrels a day in the quarter just ended.
We are awash in oil. If prices increase, oil production ramps up. When prices drop, production is cut, and the companies work hard to lower costs and improve efficiencies.
This is the reality.
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I just put up my first blog post in a series about the driverless future and was wondering if you could check it out? The amount of detail you’ve given really seems to show that you know what you’re doing.
It would mean a lot to me. Here’s the link: https://airborneorange.wordpress.com/2017/04/19/the-driverless-future-1/
Thanks in advance,
Ajinkya, aka: https://airborneorange.wordpress.com/
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