It’s not a bad time to be in the oil industry. Is it ever? BP’s oil spillage problems aside, the industry executives could be forgiven for popping the champagne corks. Buoyed on the swelling tide of recent oil price increases, the hydrocarbon majors have seen recent profits rise to unprecendented levels; and there’s every sign that the celebrations could carry on into the next quarter.
But if rising oil prices mean broad grins in the oil industry and grimaces for anyone who has to buy oil-derived products, they mean something else for the automotive sector: they’re the most powerful spur for development of low-carbon vehicles. New models are appearing weekly, such as GM’s range-extended vehicle, which it plans to sell in the UK as the Vauxhall Ampera; Toyota and EDF have a trial of plug-in hybrid cars in Strasbourg, complete with charging-point infrastructure, as we reported here.
Even McLaren, hardly the world’s leading proponent of carbon reduction, is in on the act. Launching the sports car producer McLaren Automotive, company figurehead Ron Dennis dropped broad hints that hybrid power is under consideration for its new supercars, which are already designed to be 100 per cent recyclable.
Whether this is a concern to oil companies is actually a moot point. Whenever they’re confronted about rising petrol prices, they inevitably respond that they make very little money from petrol sales; retail margins are low, they claim, and their income is much more dependent on industrial sales of refinery products. Which doesn’t explain the regular price hikes we see on the forecourts.
How high do oil prices have to go to generate a substantial switch to electric cars? The car industry now seems to believe that the switch is coming, but they haven’t yet come up with a product that truly grabs the imagination and makes sense to the bank balance; even the iconic Toyota Prius is only as efficient as a well-designed diesel. There’s still some work to be done to convince buyers over issues such as range anxiety and speed of recharging; and the hydrogen economy, which would see a switch from petrol power to fuel cells, is as far off as ever.
We’re sure that the future of transport is electric, rather than hydrocarbon. Exactly when that future will come is a matter of guesswork as much as informed prediction. We’d be interested to hear your thoughts.
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