By Mehdi Seyedmahmoudian, Swinburne University of Technology
Every year, the world uses roughly 37 billion barrels of oil. Most is burned to power cars, trucks, planes, ships and other types of transportation. For more than a century, this energy-dense hydrocarbon has shaped the modern world, from geopolitics to electricity systems.
But this dependence on oil for transport comes with clear vulnerabilities. Combustion engines burning gas or diesel worsen climate change. Oil accounts for a third of all greenhouse gas emissions from fuel. Many countries rely on oil imports, which means oil has to be extracted and shipped long distances.
Right now, oil prices are soaring after Iran closed the Strait of Hormuz, through which 20% of the world’s oil and gas is shipped. In response, governments may have to release strategic reserves, while stock markets have fallen and analysts are warning of sudden inflation.
As electric vehicles rise to 25% of new car sales globally, demand for oil as a fuel is expected to plateau and eventually decline. We can already see this in China’s very rapid shift to electric vehicles, trucks and bullet trains, which has slowed its oil demand growth.
This doesn’t mean an end to oil. We will likely need it as a raw material for useful products for decades yet. The International Energy Agency predicts petrochemicals will become the main driver of demand this year. Researchers have argued oil is likely to become increasingly important as a feedstock – and could become too valuable to burn.
Oil is far more than a fuel
Crude oil is an extremely versatile substance, able to be refined and separated into many different products. Two of these products – naptha and ethane – are the main feedstock for huge petrochemical industries manufacturing plastics such as polyethylene and polypropylene, synthetic fibers such as polyester, industrial solvents and cosmetics.
Oil is also essential for advanced materials such as carbon fiber, synthetic graphite and plastics embedded in electric vehicles, wind turbines, power electronics, insulation systems and grid infrastructure.
You might have seen this fact pointed out on social media to score points against environmentalists. But there are clear differences between burning oil for fuel – which can only be done once – and using it for materials that will stay in use for years or decades. Some of these materials can be recycled.
Oil used in this way is more like a mined product than a fuel. It is stored in products rather than immediately released as emissions.
Electrification is changing demand for oil
Electric vehicles charge their batteries with electricity, which is typically produced domestically. Electricity production, too, is shifting to clean sources – renewables, grid-scale batteries and digital energy management. These two trends should reduce demand for oil as fuel.
This isn’t a given. It relies on networks of EV chargers and new charging hubs for electric trucks and buses. The power grid has to be expanded and strengthened. Microgrids and community energy systems can boost resilience and cut demand for diesel generators in remote areas.
Other sectors will remain dependent on oil as a fuel for longer. While pure electric planes and ships are emerging, range limitations mean hybrid electric-fuel models are more likely to succeed until technologies improve.
Petrochemicals still cost the environment
While manufacturing plastics from oil does less damage to the atmosphere than burning it for fuel, it still comes at an environmental cost. Refining oil to make plastics accounts for 3.4% of the world’s carbon emissions as of 2019, and this is likely to rise significantly.
If petrochemical industries such as plastics expand as dramatically as predicted, it will intensify existing problems with plastic pollution, marine plastic and microplastics. Strong recycling and waste management can counter this, but only to a degree.
If oil shifts from fuel to feedstock, governments will have to amp up circular economy efforts to ensure products can be reused or recycled, boost recycling rates and avoid waste entering the environment.
In the longer term, we will need to look for alternatives to oil across its many uses. These could involve using pyrolysis to turn plastics back into oil so they can be used again, or looking to green chemistry approaches to convert biomass into feedstock.
What should we do?
Shifting away from using oil as fuel won’t happen overnight.
To soak up more renewables, power grid operators are adding energy storage and using digital tools and advanced control to maintain reliability and quality. This will be essential if transport is to go electric and petrol and diesel use is to fall.
The public EV charger network has to be widespread and reliable. Emerging very fast charge technologies could slash charging times. Allowing EVs to feed power back to the grid can help keep the grid stable and power prices reasonable – while rewarding owners.
Oil is not going to disappear any time soon. But over time, it’s likely to shift from a ubiquitous commodity sold at every service station to a more specialized role as a feedstock.
It will count as real progress on climate change if oil is no longer routinely burned as fuel. But if the oil industry simply shifts to petrochemicals, there will still be a significant environmental cost to pay.
Mehdi Seyedmahmoudian is a professor of electrical engineering in the School of Engineering at Swinburne University of Technology.
This article is republished from The Conversation under a Creative Commons license. Read the original article. Banner photo: An oil pumpjack in Texas (iStock image).
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