Tesla Shock Means Global Gasoline Demand Has All But Peaked

After fueling the 20 th century automobile culture that reshaped cities and defined modern life, gasoline has had its day.

The International Energy Agency forecasts that global gasoline intake has all but peaked as more efficient cars and the advent of electric vehicles from new players such as Tesla Motors Inc. halt demand growth in the next 25 years. That change will have profound outcomes for the oil-refining industry because gasoline accounts for one in four barrels consumed worldwide.

Electric automobiles are happening, IEA Executive Director Fatih Birol said in an interview in London, adding that their number will rise from little more than 1 million last year to more than 150 million by 2040.

The cresting of gasoline demand shows how rapidly the oil scenery is changing, casting a shadow over an industry that usually forecasts decades of growth ahead. Royal Dutch Shell Plc, the worlds second-biggest energy company by market value, shocked rivals this month when a senior executive said overall oil demand could peak in as little as five years.

The IEA doesnt share Shells pessimism. While the agency foresees a gasoline peak, it still forecasts overall oil demand growing for several decades because of higher intake of diesel, fuel oil and jet fuel by the shipping, trucking, aviation and petrochemical industries.

For Philip Verleger, president of the consultant PKVerleger LLC in Colorado and a veteran oil-market analyst, the IEAs outlook is one of the most optimistic outcomes for the global industry.

Refiners across the globe can only hope that this forecast turns out to be right — because all the shows are today that consumption is going to begin falling not in 2030, but probably in 2020, told Verleger. Its the best news a dying patient is to be able to get.

The projections are part of the analysis the Paris-based IEA did for its World Energy Outlook 2016 flagship report. The agency forecast that gasoline demand will fell to 22.8 million barrels a day by 2020 from 23 million barrels a day last year. By 2030, consumption will rebound slightly, reaching a peak of 23.1 million barrels a day, before falling again toward 2040.

The forecast is more pessimistic than the one released a year ago, when the IEA ensure robust demand growth from now until 2030.

Gasoline has been the worlds selection to power automobiles. From the 1950 s onward, when Henry Fords dream that every middle-class American could own a car became reality, gas station jump up next to drive-through restaurants and strip mall and transformed the landscape of America and economies across the globe.

Now, however, vehicle companies — most obviously Tesla, but also incumbents such as General Motor Co ., BMW AG and Nissan Motor Co. — are putting their money, and reputations, behind electric vehicles. With technology improving — especially for batteries — prices are falling. Tax breaks, particularly in China, are helping sales.

Global gasoline demand grew by virtually 20 percent between 1990 and 2015 despite competition from diesel in Europe, where the ga benefited from tax breaks. In the next 25 years, gasoline intake will fell 0.2 percent, according to the new IEA computations. While the number of passenger vehicles will double to 2 billion by 2040, the amount of oil we use for autoes will be lower than today, Birol said.

The biggest victim is likely to be refiners, which have spent billions of dollars over the last two decades to maximize gasoline output at the expense of other fuels. Birol said the changes in fuel-demand growth over the next 25 years will have major implications for the industry, which are likely are gonna have to re-tool their plants.

Diesel Ascendant

Demand for gasoline is likely to be much more affected than heavier gasolines — the refineries configuration will be affected, ” he said.

As gasoline demand sputters in advanced economies, middle distillates, gasolines used to power trucks and planes, will continue to see growth in the next decade as economies expand. And new international rules will require that the heavy, dirty fuels currently used for marine transit be replaced with lower-sulfur diesel in 2020.

Refiners would be wise to target distillates such as diesel in lieu of gasoline as they grapple with fading intake, told Michael Wojciechowski, vice president of Americas oil and refining marketplaces research at Wood Mackenzie Ltd. in Houston.

“Diesel seems to be almost like a utility fuel going forward, Wojciechowski told. Its got its ability to meet a lot of strategic objectives for refiners.

Read more: www.bloomberg.com

Move over Tesla: the most wonderful street-legal EV is now a Corvette Z0 6

( Genovation Cars)

When you think of fast electric vehicles, the Tesla Model S and its “Ludicrous Mode” likely come to mind, and rightly so. With the equivalent of 762 horsepower in the Model S P90D and a 0 to 60 mph period of just 2.8 seconds, few supercars could even match the electric sedan’s performance.

But what about top speed? That’s been a tough nut to crack for electric “manufacturers ” because while instant torque helps an EV rocket off the line, all that “electric juice” operates thin as the runway get longer. That’s where Genovation Cars comes in.

The EV tuner took a 2006 Chevrolet Corvette Z0 6 and turned it into the “Genovation eXtreme Electric, ” or GXE for short. While testing the reborn ‘vette at the Johnny Bohmer Proving Grounds/ Shuttle Landing Facility in Florida, Genovation brought the sports car to a top speed of 186. 8 mph. While even the regular Corvette can manage that accomplishment these days, in the world of street-legal EVs, that figure is massive. In fact, it was nearly 10 mph quicker than the previous record holder at 177 mph.

The new record was certified by the International Mile Racing Association and the vehicle has earned the official title of, “Top Speed Street Legal Electric Car.”

The GXE capitalized on the Corvette Z0 6’s lighting body as a platform to incorporate an innovative electric powertrain good for over 700 hp and 600 pound-feet of torque. Genovation claims the prototype has a 50:50 weight distribution and a range of 130 miles during “normal driving operation.” I’m guessing drag racing doesn’t fall under that category.

“We are thrilled that the result of our development testing led to the define of this record. Based on our experience in so far, we believe the car to be extremely robust as we set the record on our first day of testing, ” said Genovation CEO Andrew Saul. The company added that its work on the GXE isn’t finished and it expects the EV to reach higher levels of performance very soon.

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