“Electrification of two- or three-wheeler vehicles is something that can be done very cheaply, easily. It’s where technology and battery swaps could happen and that’s a very significant part of oil demand,” BP’s Spencer Dale said.
Motorbikes and three-wheelers serve India in a big way in daily transportation and account for a big share in the country’s oil demand, unlike in the West where commuters depend largely on private cars besides public transport.
“The challenges associated with very rapid growth of electric cars is very significant. They are expensive,” Dale said. Quoting a research paper, he said, the total subsidy on an electric car in China is $20-25,000 while fitting a car with compressed natural gas (CNG) kit costs as low as $300-400. He said he saw more role for CNG in cars and trucks.
BP Energy Outlook, published by the company, has forecast the number of electric vehicles on road to rise from 3 million now to 300 million by 2040 but doesn’t expect it to be a game changer and hurt oil demand.
It has forecast India’s natural gas production to double and consumption to treble in 20 years. India’s import of crude oil, currently about 80% of its requirement, will rise further in the future as local production will not be able to keep pace with consumption growth, Dale said.
But with a massive rise in oil and gas production across the globe, India would have no problem in securing supplies for its needs, the group chief economist of BP said.
“I think we have moved away from an age of scarcity to an age of abundance and that is the future. The world will never run out of oil, the world will not run out of natural gas,” he said.
For big oil consumers like India, this means the anxiety around country’s energy security would also dip. “You could be pretty relaxed about energy security issues because rather than a big scarcity, people are competing to sell their oil, their gas. So you can have that confidence, so the concern one may have about energy security is lesser,” Dale said.