A survey conducted by Deloitte on the uptake of electric vehicles for the oil and gas industries has revealed they will need to operate on a vastly different playing field and compete against much more tech-savvy competitors.

The Deloitte survey presented in the paper, Enter the Volt-Age: Electric vehicle disruption of the oil and gas industry, was conducted to gain an understanding of industry perspectives on electric vehicles (EV) and their impact on business.

Deloitte Australia oil and gas leader, Bernadette Cullinane, and Deloitte Australia energy specialist, Steve McGill, said one of the biggest game-changers for the oil and gas industry will come from the transportation sector.

According to the survey, which included representatives from a range of industries, over a third of respondents said the impact of EVs on their business will be felt as soon as 2020, with 80 per cent saying EVs will affect their business by or before 2030, just 12 years away.

The survey found that while oil and gas companies have a high level of awareness of the potential of EVs to disrupt their business models, they are not rising to this challenge to the same extent as those in other sectors.

Two-thirds (68 per cent) of oil and gas respondents expect EVs to disrupt their business model, less than half (43 per cent) of respondents from other sectors have similar expectations.

According to Deloitte, the internal combustion engine (ICE) has been the undisputed king of the road for over 100 years due to the energy density of petroleum fuels, but it may hand over this crown to the EV in the coming decade.

Ms Cullinane said globally, road transportation fuels account for 45 per cent of the total demand for oil.

“The underlying assumption of ever-increasing demand for crude oil due to an increasing appetite for transportation may soon stall. EVs are offering increasingly superior qualities in all three dimensions of the energy trilemma – security of supply, affordability and environmental sustainability.”

 According to Deloitte, the survey raised questions about just how seriously the oil and gas sector is taking the EV revolution and the steps it is taking to anticipate and successfully prepare for the disruption.

Only half of the survey respondents from the oil and gas sector (53 per cent) are addressing the risks and opportunities EVs present; in comparison, other sectors are materially more active (64 per cent).

“Factors driving the EV revolution include the improvement in battery, solar photovoltaics (PV) and wind technologies and subsequent reduction in their costs, and the widespread embrace of electrification by automotive manufacturers,” Mr McGill said.

“Change will not come in the form of a one-for-one fuel switch from petrol to electricity, but rather through a fundamental re-imagining of the concept of transportation. The challenges and opportunities of this major disruption are significant.

“With EV releases coming from every major car manufacturer, autonomous-EV trials underway throughout the world, and emissions and combustion engine ban legislation in the works in a number of cities and countries globally, the world sits on the cusp of a global transportation transformation that will impact all market segments and industries, including Australia’s LNG industry.”

Mr Cullinane said, “The EV opportunity is enormous – oil and gas operators must recognise this and should not ignore the rise of EVs.

“They should use their massive competitive advantage in the form of large capital reserves, great technological prowess and their skills in managing large and risky capital projects and operations to get out in front of the unfolding energy and transport revolution. In today’s rapidly changing energy landscape, oil and gas companies must get into the driver’s seat if they want to be competitive in tomorrow’s energy economy.” 

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