When I started writing my blog, more than five years ago experts said that electric cars would only be competitive with gas cars in 2035 or 2040. At the time, there were valid reasons for that understanding. Science had to move quite a ways to get to parity and so did other technology. We had to develop better fabrication methods, solve complex engineering problems and figure out how to do it all in a cost effective manner. Consequently, it was reasonable to expect all of these things to take time.
However, I noted repeatedly, that human ingenuity tends to come out in times of stress and necessity. Accordingly, I felt that we would see huge leaps in technology. Just like the development of the gasoline powered car, plane, rocket and computer, the electric car would come long before it was needed because remarkable people were working on the problem.
Therefore, it is not a surprise that the 2040 time frame has been shortened. Nor should it surprise us that the time frame has been radically shortened. For example, in 2017 Bloomberg NEF predicted that “the crossover point when electric vehicles will be cheaper upfront than a combustion vehicle” would be 2026 (nine years).
Then, in 2018, the same organization said that the crossover point would happen in 2024. Well, in 2019, that time frame became even shorter, for now Bloomberg NEF predicted that the crossover point is 2022.
Yup, in less than three years, car buyers around the world will no longer have the option of deciding which fossil fuelled powered car they wish to buy. No longer will the choice be do I buy a car that uses LNG or diesel or gas or propane. In less than three years, car buyers might have to make a more significant choice: will I buy an electric or an internal combustion powered car?
The reason for this change is simple: government policy. Various European Governments have made it quite clear that they will no longer allow for the registration of new internal combustion powered cars. Norway, one of the largest oil producers in the world, goes first. Norway is banning new gasoline cars as of 2025. Then between 2030 and 2040, various cities and countries follow suit.
Countries like France, the UK, Scotland, Wales, Germany, Netherlands, Sweden, Ireland, Iceland and Denmark, already have legislation in place; while cities like Rome, Milan, Bareclona and Athens will lead their countries by banning some or all internal combustion powered cars from their roads.
Outside of Europe, Governments – big and small; national, regional and municipal – have plans to push the same policies. Taiwan, Israel, Sri Lanka and Costa Rica will stop using internal combustion powered cars before 2040; while North American States and Provinces – including California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, Vermont, Québec and British Columbia are working at doing the same by 2050. China has put in policies to become the leading electric car producer in the world, while India is working out a cost effective way so that their transition can begin in 2030. So the problem being created by foreign governments is simple: foreign governments are reducing their need for foreign oil – including Albertan Oil. The worst part about it though will start to be felt within 3 -5 years because that is when existing Oil Consumers will significantly reduce the amount of oil that they consume.
If you doubt my words, look at the example: Norway. Norway, like Canada, has a cold climate and produces oil. In fact, Norway is the largest oil and gas producer in Europe. Yet, unlike Canada, they have announced that they will ban the registration of new internal combustion powered cars in 2025. What is interesting is that in Norway, new car buyers are more likely to purchase an electric car. Or put differently, in 2019, 56% of all new cars bought in Norway were either hybrid in design or a fully electric car. Given that in 2013, Norway’s “non internal combustion engine market” had less than 5% market penetration, one can say that the change has been remarkable.
And that change is beginning to reshape Norway’s oil usage. While they have had population growth and a healthy economy, since 2017, Norway has seen a slight drop in the demand for Oil and related products. While not definitive, this Norwegian yardstick could have some lessons in it for Alberta. For, while it is true that the world needs more energy, Alberta might find that they don’t want or need our version of it: coal, oil and natural gas. Think about it, American Coal companies are going bankrupt because their version of energy is finding fewer buyers. The same was true more than two decades ago, when coal mines closed in Nova Scotia and throughout Great Britain. We may find that the same thing is true soon in dealing with Alberta’s most precious natural resources.
Again, if you doubt my words, look at the largest corporations in the world and what they are doing. Fiat Chrysler is now merging with Peugeut; after Fiat Chrysler could not do the same with Nissan. Why was Fiat Chrysler so desperate to merge? In both cases, one of the largest reasons ways the capital needed to deal with the electrification of cars. Or one could look at Audi and GM advertising electric cars on the Superbowl; or GM’s move to remake the Hummer into a new electric vehicle. That’s right, GM is remaking a SUV most known for its gas-guzzling ways into an electric vehicle.
Or how about the predictions that we will see a “hybrid/electric vehicle price war” in Europe as automobile manufacturers try to win share as the 2025, 2030 and 2035 deadlines approach.
As Volvo has ditched its internal combustion car engines and Ford is trying to turn the Mustang into an electric CUV, we can see that the world will slowly begin to use less oil. As new high efficient internal combustion engines from Toyota – which are almost twice as efficient as our existing ones – begin to replace existing gas and petrol engines, we can see that the world will use less oil. In this new world, where oil consumption is constantly falling, what should we do?
The Government of Alberta needs to help by picking winners and losers. While we will depend on the Oil Patch as the basis for our economy for the next decade or two, the Government of Alberta needs to invest in companies that can turn our Bitumen into construction grade carbon fibre. Alberta and Ottawa need to invest in Canadian Automobile Manufacturers – anywhere in Canada – who are willing to make Hydrogen Fuel Cell Cars because those cars do two things that Alberta needs: they use hydrogen as their input and emit water as their exhaust. These two facts are important because Alberta is full of hydrogen. For, there are only two places on this Earth where one can get hydrogen: distill it from water or distill it from hydrocarbons. Since, Bitumen is full of hydrocarbons, Alberta can change.
Alberta just needs to tax present Albertans so we can invest in our future. Instead of cutting jobs in hospitals, universities, school boards and in Edmonton, we should be planning for the next leap as Rutherford, Sifton and Lougheed did. Alberta has options, as long as we recognize that we are in this together. As long as the majority takes the wishes of the minority into account and we witness – through objective evidence, through science, – where we are. As long as we talk, listen and learn and not just try to silence each other, we will have a hell of a future. So nothing is lost, yet, as long as we are willing to be pragmatic. While, I hope Jason Kenney will listen, I am doubtful; but only time will tell.