Oil Companies Should Prepare For Slow Decline Instead Of Playing Stupid Games

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A few days ago, Johnna Crider here at CleanTechnica covered a recent attempt to mislead media and the public about the environmental benefits of EVs. In some ways, the attempt was successful, as German media ate it up. This spread false information, and many in the audience gleefully accepted the false information because it aligned with their biases and preconceptions.

This doesn’t work in the long run, though. Instead of trying to play games they can’t win in the long run, oil companies should accept that they’re in a declining industry and figure out how to get oil’s endgame right.

The Latest Stupid Game They’re Playing

Ultimately, this most recent episode was a case of cherry-picking disguised as analysis. Using overly complex math to hide what they were doing, the fake advocacy group set things up so that they could declare anything unclean and bad for the environment simply by counting it last. If the things you count first take up all of the renewables and cleaner generating capacity (natural gas, nuclear, etc.), then whatever is left is powered by coal and therefore emits twice as much carbon as everything else.

Even if this was a fair way to compare gas to electric, the grids are changing toward more renewables and we’ll see things clean up much more during the lifetime of an electric vehicle sold today. A gas car will always run on gasoline, or will run on a “green” fuel that takes far more electricity to produce than simply charging a car battery would. In other words, even if they were right, they wouldn’t have been right for long.

We’ve seen these kinds of games before, and we’ll see them again. As Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.” When people feel that their income and financial future relies upon people continuing to burn fossil fuels like there’s no tomorrow, they’ll do crazy and even dishonest things to try to keep the gravy train going down the track.

But they don’t need to do this, at all.

The Honest Reasons ICE Isn’t Gone Yet

The sad thing is, these people have a lot going for them already, but that’s either not good enough or they’re ignorant of the real advantages. Let’s look at what they still have going for them.

Energy Density

The biggest advantage to ICE engines still have is energy density. Electric motors are a lot more efficient at converting energy to motion, producing minimal waste heat. Gas engines, on the other hand, convert most of their fuel (as much as 80% of it) to useless heat that drifts away in the wind. Despite this, they still get great range because their fuel is so dense. In a much smaller space and with a much smaller weight, gasoline stores a lot more chemical energy than even the best battery cells of 2021 volume for volume.

That energy density advantage isn’t going away anytime soon. The best estimates of today are that solid-state battery cells might double energy density in the next 5 years, but that would still leave them far behind the energy density of gas. Sure, new stories are coming out all the time about some new battery technology that’s going to change everything, but after over a decade of covering these whizbang new technologies at CleanTechnica, none of them have fulfilled any of their big promises. It’s even to the point where our editors say they don’t want us to cover them unless they’ve proven themselves in some substantial way.

The successful improvements we’re seeing in the industry make small, gradual (but important) improvements, like Tesla’s 4680 cells. Other ideas, like structural battery cells and packs, can partially make up for the lack of energy density, but can’t come anywhere close to covering the whole shortfall. One writer at TopSpeed.com might have been right when he said that we might invent working warp coils (to travel the stars like in Star Trek) before we get batteries to the energy density of gasoline.

Innovative companies like Tesla have come up with ways to make it work anyway, but so far only for cars and hopefully light trucks in the near future. Production of larger trucks is also coming soon, which is good because they’re a large source of pollution. Motorcycles still struggle to get decent range because they can’t fit much battery in their frames, and most larger marine and aviation applications still can’t be effectively served by battery-electric drivetrains because they need lots of energy with minimal weight to work.

Bottom line here: batteries won’t replace all combustion engines for at least decades, if not longer.

Cost & Profit

On the consumer side, the cost of an electric car isn’t a big problem. Sure, the purchase price is still higher, but the overall cost of ownership is now competitive with similar gasoline vehicles. Even for economy cars, you’re generally still better off to buy an EV. However, the Ford Maverick was recently released with a hybrid for the base model because research showed that people wouldn’t spend $30-40,000 for a compact pickup. The sweet spot for that vehicle was still around $20,000 (which Ford did hit with the hybrid base version).

The price sensitivity to making EVs is even harsher for manufacturers. One expert cited in the video above estimates that good EVs are generally not profitable below around $48,000 for manufacturers as of 2020, so to be able to sell EVs below that price point, they need to be subsidized and/or advantageous to the manufacturer in some other way (regulatory credits, fleet MPG, etc.).

This is why manufacturers haven’t jumped in and started making 100% EVs, and it’s also why we’re seeing a lot more hybrids (both gas-fed and plugins) from the big manufacturers. No profit means no business, so they’re having to come up with stop-gap solutions rather than just close up shop.

Gas Isn’t Going Away Overnight

Between price sensitivity, consumer fears about electric cars, and the inconvenience of charging, there’s still a lot of demand for ICE and hybrids, and manufacturers are still very happy to keep making and selling those, because they’re more profitable and easier to package.

This will change over time as battery technology improves, prices drop further, and people get used to the idea that EVs can be good vehicles. Some of this will happen slower in the Global South and among people of low incomes in developed countries, so there will be a delay effect there. Because all of this will take time, some estimate that 2-3 billion more combustion engines will be produced between 2020-2045.

The oil companies will have those engines, plus whatever survives of what’s on the road today, to sell fuel for, likely until at least 2070. Demand for what they’re selling will drop over time, but it won’t dry up overnight and kill their business completely in one swift Death Star stroke. Unlike digital cameras, which killed film cameras pretty quickly, gas cars will be both made and driven for a number of decades, and perhaps much longer in some niches.

The best thing oil companies can be doing right now isn’t getting caught peddling useless lies. That can only backfire for them. What they should really be doing is figuring out how to manage a relatively slow decline. We like to look at buggies and buggy whips as a dead industry, but there are still a small number of people using them today for various reasons.

This is a topic for another article, but there are many examples of companies who reap profits and even innovate in declining industries. We aren’t going to play the denial game with these companies, so they should accept reality and focus on getting the decline right.

Featured image: A horse and buggy in front of a home around 1900. Image by George Irwin via Government of Ontario, public domain.

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Jennifer Sensiba

Jennifer Sensiba is a long time efficient vehicle enthusiast, writer, and photographer. She grew up around a transmission shop, and has been experimenting with vehicle efficiency since she was 16 and drove a Pontiac Fiero. She likes to get off the beaten path in her "Bolt EAV" and any other EVs she can get behind the wheel or handlebars of with her wife and kids. You can find her on Twitter here, Facebook here, and YouTube here.

Jennifer Sensiba has 1985 posts and counting. See all posts by Jennifer Sensiba