Larry Burns, a former General Motors executive said the threat to the oil and gas industry is more near-term. "If you're not prepared for this inevitability, I think you're in trouble," he told conference attendees. Burns has consulted for energy producer Hess Corp. and Alphabet Inc.'s self driving subsidiary Waymo. This was the tone that was set at a petroleum museum Monday, a conference set up to discuss the future and consider the threat of electric cars to oil production, the country's largest export. Experts believe there is a possibility that electric powered vehicles will make up 50 per cent of vehicles on the road by 2050. ARC Energy Research Institute organized the event.
Peter Tertzakian, executive director of ARC, said even a slow or modest adoption rate for electric vehicles over petroleum-burning vehicles could cause pain for oil producers because "when demand moves, the price of oil moves," which could result in large losses for higher cost oil producers. Personal vehicles represent roughly 40 percent of the worldwide consumption for oil, which means electrifying vehicles could present a drastic change in the oil and gas industry depending on how quick consumers adopt and abandon their traditional gas powered vehicles. Tertzakian also mentioned there are currently more than 1 billion vehicles on the roads in the world, a quarter of those are on the roads in the US and electric vehicles make up less than one percent of the mix, but the proportion is projected to grown. This week Tesla stock shares shot up 7.1% on Monday after the news that the electric car maker shipped a record 25,000 units in the first quarter, exceeding analysts' expectations. And after another rise in Tesla's stock on Tuesday, saw the company over take Ford as US' second largest auto manufacturer and GM set in its sights.
Tertazakian says his team organized the conference as there are too many oil conferences that disregard electric vehicles as a threat, while the attendees at electric vehicle conferences "drink their own bathwater." Many oil and gas producers have attempted to predict and forecast the impact of electric vehicles to determine the upcoming threat to their market. ExxonMobil Corp, issued a more conservative estimate that 10 percent of the cars on the road in 2040 will be electric. Experts believe that number to be too low. Some other predictions have the electric cars overtake combustion engine car sales before that time period and sit within the 40% mark. Other threats to the energy market is fuel regulations set out by different countries. The US itself has a federal quota which differs from the more strict regulations from California and the ten other states that follow its lead. Car manufacturers are trying to boost efficiency by reducing the weight of their cars. Just one percent of the gas being burned in your car right now is moving you, the rest of it is being used to move the automobile itself.