Study claims advanced biofuels and electric vehicles will disrupt demand for oil within five years
The global oil sector will face unprecedented levels of disruption within the next five years as a result of the emergence of commercially viable biofuels and electric vehicle technologies.
That is the conclusion of a major new report from management consultancy Accenture, which argues that demand for conventional transport fuels such as petrol and diesel could prove to be significantly lower than anticipated by 2015.
The study, titled Betting on Science - Disruptive Technologies in Transport Fuels, assessed 12 innovations in electric vehicle and genetically modified biofuels and found that while each will still require considerable support from policy makers in the form of tax incentives, government investment and clearer intellectual property rules, they are much closer to commercial deployment than is generally accepted by the oil industry.
Speaking to BusinessGreen.com, report author Melissa Stark said that the prevalence of many viable low-carbon alternatives was likely to come as a shock to the oil companies they are seeking to compete with.
"Some of the companies we looked at are planning to bring products to market within two, not five, years," she said. "These are not pilot projects any more, but full-scale roll outs - even if just the first wave of companies comes through in the timeframe it will still prove very disruptive."
The report found that a large number of emerging technologies have the potential to be competitive with oil at a price of between $45 (£27) and $90, while delivering emission savings upwards of 30 per cent. Currently, oil is priced at over $80 a barrel and many analysts predict it will continue to climb as the global economy recovers.
Stark added that the emergence of new biofuels in the short term and elect ric vehicle technology in the longer term is likely to put increasing downward pressure on demand for oil. "From a volume perspective there will be pressure on demand," she said. "It will serve as a counterweight to the projected increased demand from India and China - but even then China is investing in low-carbon technologies in a big way."
The report also predicted that the emergence of new biofuels and electric vehicle technologies will reshape the competitive landscape in the transport fuels industry with companies from sectors as varied as agri-business, auto manufacture, bioscience, pharma and energy generation all looking to break into the market.
"The challenge for the big integrated oil companies is that they do not have a natural advantage in these new technologies," observed Stark. "The natural advantage rests with the agriculture or bioscience companies in terms of GM biofuels, or the battery manufacturers, car companies and utilities, when it comes to electrification."
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