7 July 2014

An anecdote has it that during the Industrial Revolution, electric cars lost to petrol over the range of travel — many cheap workers had to be transported to the factories and back, from rural areas. Electric transportation didn’t work outside of big cities, hence production & research focused on the more universal combustion engines.

Fast-forward 100 years, electric cars are back, and with no intent to be a seasonal hype. Because this time, the geopolitics are different.

Look at the numbers: Venezuela (25% of GDP from oil sector), Saudi Arabia (50%), Canada (7%), Iran (19%), Iraq (70%), Kuwait (60%), UAE (40%), Russia (20%), Libya (25%) and Nigeria (35%) are the Top 10 countries with proven oil reserves. On the other hand: USA, EU, China, Japan and India are the Top 5 oil consumers. Notice how these lists don’t overlap at all.

Moreover, 71% of U.S. oil consumption is used for transportation — that’s cars and planes, mostly. The figure is probably similar for the rest of the Top 5 consumers. Now, guess what this list is: China, USA, EU, India and Japan?

Top 5 electricity producers. That’s right, the countries that consume the most oil, also produce the most electricity — and do so virtually without oil.

Here’s where it gets interesting. Electric cars are not green — the energy required has to come from somewhere. But electric cars allow to diversify the source of that energy. Today, to drive a car you need oil, and that’s it. Tomorrow, electric cars will “drive” on anything from coal, solar, wind, natural gas to uranium or thorium — whatever the power plants use.

If the electric car revolution continues, the Top 5 consuming countries will become less and less dependant on oil imports. The delicate energy symbiosis between the West and the OPEC will end and the petro-dollars will vanish. And that will change everything, for everyone — for better and for worse.