28 June 2022. Cars | Abortion
How EVs are killing the oil industry// The last day at a Texas clinic.
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1: How EVs are killing the oil industry
Gregor Macdonald is one of the best analysts of the EV transition and its impact on the oil industry—although most of his work is for his paid-for Substack newsletter The Gregor Letter.
The latest edition of the letter has some striking evidence about the shape of the EV transition and its impact on the oil industry. Because it’s behind a paywall, I won’t go too long on this, but will share some of the most interesting data.
The global electric vehicle fleet has flattened demand for oil. According to Bloomberg, it has displaced demand for 1.5-2 million bpd of oil:
That’s big. Really big. In fact, in a global oil market that’s roughly been running between 95-100 mbpd per year for a while, the typical annual change is right around that 1.00%-2.00% level. If BNEF is right (and they probably are) total global electrics have now grown large enough as a fleet to entirely counter annual oil demand growth.
That’s good news. But:
Internal combustion engine (ICE) vehicles continue to be sold, even though sales of ICE vehicles peaked in 2017. But the peak of the number of ICE vehicles in circulation depends on how long people keep them for, and the rate of decline of new sales.
And here Bloomberg also has some interesting data:
BNEF has also made a call on the peak ICE fleet. What year peak? This year, 2022, apparently. Notice again how the chart below is exactly like global population projections that are adjusted every few years based on births, deaths, fertility rates, and longevity.
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This is faster than analysts have expected. So what’s going on here? Well, analysts used to assume that it would take regulation to shift the market, whereas what seems to be driving it now is a combination of consumer preference and accelerating EV technology.
They also used to assume that the carmakers would have to be dragged into making the transition, whereas it’s become a central arena of competition between them.
There may also a market effect that Macdonald describes as a version of the ‘Osborne effect’: that drivers who know that their next car is likely to be an electric one are holding on to their existing ICE vehicles for longer. This is how he explained it in a recent edition of his newsletter:
One possible explanation: with the knowledge that EV are the future, and that petrol prices are volatile and punishing, buyers may be keeping their ICE vehicles as long as possible, having already made the decision that their next vehicle will be electric. The very idea that one would go out today and purchase a new ICE car, thus locking in dependency on oil for the next 7-12 years, is both comical and absurd.
There’s a couple of consequences of this. The first is that the market can suddenly start moving quite quickly. The second is that when they dispose of them they may be worth little, so barely worth selling on.
And another data point suggests that this speeding up of the market may be, well, now. Global EV sales are accelerating years on year. This looks like an S-curve to me:
And finally, it’s not just about the car market. The global electric vehicle fleet referenced by Bloomberg includes two wheelers and three wheelers. And right now, it’s the electrification of that part of the global vehicle market that is having the biggest effect on oil displacement.
(Source: Bloomberg)
2: The last day at a Texas clinic
I have a naive belief that sometimes the best way to understand something is simply to report on it. This may be a legacy of the decade or so I spent working as a journalist. But the best piece I read over the weekend on the Supreme Court’s judgement was in The New Yorker, which sent a reporter, Stephania Taladrid, and a photographer, Meridith Kahut, to an abortion clinic so that they were there on the day as the Supremem Court judgement came out.
Kudos to the editor involved as well, whoever it was. I’ve not used any of Kahut’s fine photos because they are the copyright of the New Yorker.
(Supreme Court rally, 2016. Photo, Adam Fagen/flickr. CC BY-NC-SA 2.0)
So this piece actually catches the changing—and perhaps chilling—moment from when the clinic could advise women on their abortion to when that was illegal.
My obvious advice here is to go and read the thing—The New Yorker‘s paywall is a fairly generous thing. I’m just going to pull out some extracts that give a sense of the passing of time during Friday morning.
At the start of the day:
At seven o’clock on Friday morning, Ivy turned on the lights of the Houston Women’s Clinic, the largest abortion provider in the state, where she has worked as a supervisor for nearly two decades. Since May, when the draft of a Supreme Court decision leaked, revealing its conservative majority’s intention to overturn Roe v. Wade, Ivy, who is fifty-six and asked to be identified only by a nickname, went to work each day knowing that it might be her last.
Ivy has to warn patients that it might not be possible to go ahead with the procedure—some a medicated abortion, using pills, some a surgical procedure—because of the impending Supreme Court decision:
That day, despite Ivy’s warnings, only a few women at the front desk seemed to register that their access to abortion was in jeopardy. The dominant concern was whether the ultrasound would determine that they were more than six weeks pregnant or had electrical activity in fetal cells—eventualities that, following the passage of a state law last September, would mean they’d be barred from receiving an abortion in Texas and need to seek care in a different state.
At 9.11 a.m. the clinic’s director, Sheila, gets a call from a lawyer at the American Civil Liberties Union that Roe has been overturned. The staff had been expecting it, but are obviously distressed:
Confused, one of the patients left her seat and interrupted their silence. “Why are y’all crying?” she asked. Sheila, trying to collect herself, wiped her tears away and turned to the woman and three other patients in the waiting room. “Ladies, I’m so sorry to tell you that the law for abortion has been overturned,” she said. “We are not able to perform any abortions at this time, but that doesn’t mean that you don’t have an option, O.K.?”
Some patients left immediately. Some begged for help; one says that if the clinic lets her have the pills she can take them at home and no-one will know:
“We can’t do it,” Ivy insisted. “It’s against the law.” The woman begged her: she would take the pills at home—no one would have to know. “Your husband has to take you to another state,” Ivy said, her tone severe. “Abortion is not legal.”
The staff try to call patients who have appointments during the afternoon, but of course they can’t reach them all, and they start showing up. They have to reassure a woman who is having a check-up after an abortion the previous week that she has done nothing legal. Some of the Latina women are struggling with the information they need, because it is mostly in English. Of course, while dealing with the women who are coming into the clinic, explaining why they can no longer have abortions, they are also coming to terms with the fact that they no longer have jobs either:
During a momentary lull in patient traffic, Sheila sank back against a cabinet to rest. “We can fall down now,” she told the others. A staffer in her sixties named Linda, who had been working at the clinic for forty-two years, respectfully disagreed. She remembered the years when picketers would break into the clinic with stink bombs or flood the premises with hoses through the front door’s mail slot—often enough that drain holes had been drilled into the clinic floor. “If you fall down,” Linda said, in a grave voice, “they’ll walk right over you.”
The clinic has been there for forty years. All of the staff know what the alternatives mean, especially for poor women and those with few alternatives:
The clinic’s counsellors knew of patients who had thrown themselves down a flight of stairs or had seriously contemplated suicide. “We’ll see more babies in the dumpsters,” Lupe, another medical assistant, said. She was most worried about the women who could not travel out of state and Latina patients she had treated throughout the years, some of whom were illiterate. With the staff at the clinic gone, who would pass on information about alternatives now?
As I said: please do read the whole piece.
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