Occam’s razor confirms our belief that oil will remain the driver of transportation across the world . Demand will explode, and prices will skyrocket … as high as $500 per barrel . The easiest way to see this is with the transportation industry – which, as we said, is the No. 1 driver of oil demand and consumption in the world… Now, I know that transportation is broader than cars and trucks. It includes shipping, heavy trucks, and marine and air travel. But for simplicity, let’s just talk about cars and light trucks. Today, there are 270 million registered cars and light trucks that run on gasoline and diesel in the U.S. In 2017, there are an estimated 250 million licensed motor vehicles in China and an estimated 70 million in India. That’s 320 million gasoline and diesel vehicles in those two countries alone – almost the population of the U.S. (324 million). There are more than 1.4 billion light-duty vehicles in daily use around the globe. Estimates are 2 billion by 2035. Folks like Elon Musk and other visionaries espouse in the media big ideas about electric cars and the demise of gasoline- and diesel- powered cars. But facts are important… Of the 1.4 billion motor vehicles on the road globally today, only 0.15% are plug-in electric vehicles. And sales of plug-in electric vehicles represent just 0.85% of total new car sales worldwide. In 2017, almost 70% of oil in the U.S. is used for transportation.
A shift from gasoline- and diesel-powered cars and light trucks to electric vehicles requires us to make a lot of assumptions….
First, let’s look at the internal combustion engine.
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