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29 September 2017

Peak combustion

Peak combustion Peak combustion
Our supplement on the energy sector kicks off on p53 (see online magazine section, September). No prizes for spotting that this area has been hit hard, with activity in engineering companies that serve this sector having slowed in response (full analysis, p54 -see online magazine section, September).

A couple of issues ago, I wrote about how the approach of the electric car was worrying German industrialists in the automotive, machine tool and cutting tool sectors. The manufacture of internal combustion engines is central to all. It’s big business for linked supply chain firms, too.

On the fuel side of the issue, oil companies have concerns. Last year, Royal Dutch Shell forecast demand for oil could peak within five to 15 years, while oil industry consultant Wood Mackenzie suggested that as much as 10% of global gasoline demand could be cut by 2035. Cars and light trucks account for around 26% of global oil usage, says The Guinness Global Energy Report. So oil companies are diversifying into ‘greener’ areas.

Many car firms are engaged in the pursuit of electric or hybrid car technology, while several countries have made pronouncements on ceasing the sale of conventional petrol and diesel cars. Improving technology on the electric vehicle side, with upstart electric auto maker Tesla providing a gold standard, is a development that is allowing the transition to gather speed.

Then there’s the consumer response to all of this. Car sales expert Auto Trader has news on the effect of recent pronouncements. On average, 25% of all searches that take place on Auto Trader each month are based on fuel type, it recently reported. In November 2016, 71% of those saw diesel chosen, compared to just 26% for petrol vehicles. Following Government Minister Chris Grayling’s diesel scrappage scheme musings and then months of negative press on diesel cars, the share of diesel searches had dropped to 54% by May 2017. Petrol searches gained, rising to 43% of all searches in the same month. From May 2017, diesel searches returned to growth, rising to 56% in June, with petrol dropping to 41%. But diesel searches are below the November 2016 level, observed Auto Trader.

And following the Environment Secretary’s announcement of a ban on “the sale of all new conventional petrol and diesel cars and vans by 2040”, on that day, 26 July, there was a 680% increase in consumers searching for electric, 257% for petrol ethanol, 170% for hybrid and 129% for bi-fuel vehicles.

People used to speak of ‘peak oil’ (maximum extraction rate reached), but it’s looking like ‘peak internal combustion engine’ has overtaken that concern.

First published in Machinery, September 2017

Andrew Allcock

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