We nominate two analysts from financial services firm Raymond James for the Downer of the Year (so far) Award. The analysts, J. Marshall Adkins and Pavel Molchanov, did some number-crunching that revealed hybrids aren’t making much of a dent in our demand for oil, reports the New York Times.
The research does not rocket science make, and the analysts admit as much, calling their findings “blindingly obvious.” They took the numbers of hybrids sold domestically and globally in recent years, extrapolated out to 2020 and determined that even if hybrids’ market share (including plug-in hybrids) continues to rise aggressively, the amount of oil savings they’ll represent will remain minuscule when compared to demand.
The point of the research does not seem to be to show hybrids and plug-in hybrids in a poor light. In fact, it makes clear that they represent an incremental negative for oil consumption. But it puts the incremental improvement into perspective, both here and globally. The analysts determined that in the US in 2009, fuel consumption savings from new hybrids were about 5,500 barrels per day (BPD). But demand for oil in 2009 was about 19 million BPD. To call the savings that hybrids represent a drop in the bucket “is too generous,” the analysts write.
If hybrid sales between now and 2020 become sluggish, oil savings they’ll represent will increase to 60,000 BPD. If sales are moderate, the savings will be 109,000 BPD in 2020, and in a favorable sales scenario, they could save 202,000 BPD (and these figures account not just for hybrids sold during 2020, but all of those sold between now and then). Still, even the best scenario–a savings of 202,000 BPD–represents barely 1 percent of current U.S. oil demand.
Depressed yet? You shouldn’t be. Who thought hybrids were the answer, anyway? That might be what hybrid advertisements would have you believe, but low-emissions vehicles are just one element to be considered when it comes to reducing oil consumption. And when considering the long history and predominance of conventional combustion engines, it’s clear that they aren’t going anywhere. But the price of oil will impact demand. Improved rapid transit systems will impact demand. The use of alternatives to petroleum in manufacturing and other sectors outside of transportation will impact demand. Will these changes impact demand enough to make a difference? I’m guessing Adkins and Molchanov would say no. But what do you think?