The Fuse

Autonomous Vehicles to Bring Sweeping Energy, Environmental Impacts

by Matt Piotrowski | June 15, 2016

Much of the discussion surrounding autonomous vehicles has focused on safety and the ability of the new technology to significantly reduce deaths on American roadways, for good reason—some 33,000 people die each year from traffic accidents, with most occurring due to human error.

There’s been less talk, however, about the energy and environmental benefits of self-driving cars. The potential of these vehicles to make driving less costly and more efficient could significantly reduce oil demand, perhaps as much as 50 percent. But there’s another theory—the cost savings and increased efficiency could spur a rebound effect in travel, since it becomes all around more attractive, and possibly double activity on the roads.

One expert in the transportation space sees positive trends ultimately occurring regarding energy consumption from autonomous vehicles. Speaking on a panel at the Carnegie Endowment for International Peace Tuesday, Levi Tillemann, author of The Great Race: The Global Quest for the Car of the Future, said that three “synergistic technological developments” will set these trends in motion—the rise of autonomous cars, the popularity of ride-sharing services, and the electrification of the car fleet.

Three “synergistic technological developments”—the rise of autonomous cars, the popularity of ride-sharing services, and the electrification of the car fleet—will have enormous implications for fuel demand, perhaps slicing it by as much as 50 percent.

Tillemann says this “new mobility” will change the dynamics of energy consumption. Car-sharing services such as Uber and Lyft, which have exploded in popularity and are the first adopters of the new technology, are burdened by two major costs—the car and the driver. With full autonomy, or level 4, the drivers are taken out of the equation. At the same time, as autonomy becomes more mature, companies can focus on purchasing their own fleets, which will be mostly autonomous, and raise utilization rates so vehicles are not sitting idle most of the time. “Companies like Uber and Lyft (or Bla Bla Car in France, or Kakao Taxi in Korea) have been able to leverage these massive, underutilized capital investments (privately owned cars) through smart logistics, good phones, apps, and ubiquitous connectivity,” Tillemann wrote in an article for Slate. “Interestingly, putting underutilized cars to work wasn’t Uber’s original plan, but the logic behind it is so compelling that both Uber and Lyft, which started off in very different places, co-evolved to embrace essentially the same business model.”

Just as important, new mobility has spurred a move toward “pools,” or a number of passengers sharing one vehicle for practical purposes and an opportunity to save costs. “Every time you put two people in one car, you are essentially cutting your capital costs by half,” Tillemann said. This trend, which cuts the number of miles traveled and the amount of congestion on roads, also has enormous implications for both fuel demand and emissions reduction.

Lastly, the electrification of the car fleet will occur alongside the move to autonomy, which provides an opportunity to slash costs and bring about environmental benefits. Every “e-gallon” will be half the price of a regular gallon of gasoline with prices where they are now. Costs savings would balloon with gasoline prices rising to higher levels. “You will see an increasing tendency among suite operators to move away from internal combustion powered vehicles toward electric vehicles,” Tillemann told the audience.

Obstacles, and the importance of electrification

It’s important that we take a “proactive and early approach to incentivize the best trends” so that we have the “right kind of autonomy” that’s not dominated by heavy vehicles and the internal combustion engine.

This shift in the economy will not be without obstacles, and it’s important, Tillemann said, that we take a “proactive and early approach to incentivize the best trends” so that we have the “right kind of autonomy” that’s not dominated by heavy vehicles and the internal combustion engine. The transition from oil to electrification could mean that even with the same amount of vehicles mile traveled in the country, oil demand would shrink by half. Securing America’s Future Energy (SAFE), in its National Strategy for Energy Security, laid out a similar argument: By adopting autonomous vehicles that are more efficient and advance electrification, oil demand could collapse. “The availability of shared, autonomous vehicles should encourage accelerated adoption of AFVs which share design synergies and are a more economic choice for heavily utilized vehicles,” said the report. “These factors have the potential to drive transportation oil use from current levels of over 11 million barrels a day to under 4 million barrels a day by 2040, even as road travel increases by 30 percent.”

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Tillemann said that projections on electrification from a number of sources, including the Energy Information Administration (EIA), Massachusetts Institute of Technology (MIT), and ExxonMobil, are very bearish. But the trend toward electrification could be self-reinforcing, meaning that once it takes off and benefits become obvious, the conditions will allow for even greater growth. “No disrespect to Exxon Mobil, the Energy Information Administration, or MIT,” Tillemann wrote in his Slate article. “This is just the kind of technological discontinuity that hits modelers in their blind spot. And that’s why they’ve got this one wrong.”

Social disruption, and possible upheaval

This coming wave of new mobility will have unintended consequences, some of which may cause social upheaval.

Of course, this coming wave of new mobility will have unintended consequences, some of which may cause social upheaval. Drivers in the trucking industry, which total some 3.5 million, could lose their jobs, while the oil industry may be shattered. “There’s another element which is this social dislocation that’s going to arise from autonomous vehicles displacing one of the largest job sectors in the U.S. economy,” Tillemann said, referring to drivers in the trucking industry.

In the longer term, society will benefit from the positive technological changes even though there will be short-term pain with a major shake-up in the labor market. Tillemann urged policy makers to look at the possible negative consequences of the new disrupting technology as soon as possible in order to keep the fallout contained as much as possible.

In the longer term, the economy will eventually adjust. The market for services will expand, offsetting losses in manufacturing and fuel demand. But the correction could be painful until the dislocations are dealt with.

At the beginning of the panel event, moderator David Livingston, Associate, Energy and Climate Program at Carnegie, said that the use of autonomous vehicles had always seemed like the “stuff of science fiction,” but the economy is on the cusp of adopting this new technology. Livingston pointed out that many technology revolutions have been hampered by burdensome regulations, backlashes from citizens who are not fully informed or comfortable with any shifts, and changes that fail to live up to their promised benefits. Will this be the case with autonomous vehicles? Innovation in the autonomous space is taking off quickly, and if Tillemann’s synergistic technological developments occur, changes will happen fast, with benefits fully apparent.

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