The phrase “peak oil” was coined to explain when the world’s supply of oil would start running out. Over the past decade, however, the meaning has shifted from supply to demand—consumption of oil may dwindle out before resources do.
What changed? The rise of electric cars means that there will come a time when more drivers will get their energy from the grid than the gas station. Cars and trucks account for the largest share of global oil demand, by some distance.
Wood Mackenzie, an influential oil consultancy, thinks that the threat to oil will become more severe with the rise of self-driving cars. Ed Rawle, WoodMac’s head of crude oil research, told the Financial Times (paywall):
Autonomous electric vehicles or robo-taxis will really change the face of transport in the coming decades. We presume they become commercial by 2030 and widely accepted by 2035, with each autonomous electric vehicle expected to have a larger impact on curbing oil demand than a conventional electric car.
The logic goes: When there are self-driving cars, people would increasingly prefer to be driven than to drive. That means self-driving cars will spend more time on the road than normal cars. These newer cars are more fuel efficient, so widespread use will curb oil demand, regardless of whether they are electric or not. But if self-driving cars are also electric, which is likely to be the case, the threat to oil is even greater.
How big will the impact be? WoodMac predicts that oil demand could peak as soon as 2036. That’s sooner than BP’s prediction of 2040. Saudi Aramco and ExxonMobil, meanwhile, don’t think that peak oil will come until later, if at all.