Whether it is worth investing money in oil refinery today

Scandal over «diesel gate», among other things, led to statements of a number of the countries for the future refusal of traditional motor fuels. It in turn generated a lot of questions. One of the main is a question of alternative — what fuel can succeed gasoline and diesel. Perhaps, the future is behind electric cars, it is possible that it is behind gas. As well as, the events may not lead to serious consequences for oil and gas branch and automotive industry at all.

Beginning of the end of an era of oil?

Not a lot of time past since the beginning of «diesel» scandal when it became clear that the Volkswagen Company artificially overestimated ecological qualities of diesel engines of some models. The company suffered enormous reputation losses and regulators (in the USA and Europe) became more attentively looking at indicators of cars of other brands. On this background a large-scale campaign was launched against diesel fuel in Europe.
Plans for restriction of use of diesel fuel were presented. For example, starting with 2018 (Germany) entry into the city in Stuttgart will be forbidden to cars with the diesel motors which do not meet requirements of Euro-6. However, restrictions will be introduced only if the maintenance of harmful particles in air exceeds norms. There were messages that France plans to stop sales of diesel and petrol cars by 2040, similar measures will be taken also by Germany and Norway will refuse oil fuels by 2025.
Flat spin actively warmed up by mass media began in the diesel market of Europe which is declared fast electromobilization. Allegedly revolution of electric cars already happened and the only thing that can make «an oil lobby» is to slow down it a little.
Question of fuel is really not the idle. It leaves far beyond TV screens and newspaper strips. It first of all is a question of huge money of which it is necessary to dispose competently already today, for example, whether it is worth investing money in modernization of oil refineries, if actually gasoline and diesel fuel depart in the past soon.
This question also concerns our country. The Russian companies modernize as the enterprise within the country at present, and out of it. Literally the other day «Gazprom Neft» declared the beginning of the next stage of deep modernization of the oil refinery in Panchevo (Serbia). In some years the plant will become the world record-holder on oil refining depth – 99.2%. And one of the main products of this plant is diesel. Let’s not forget and about modernization of Moscow Refinery. Whether it is worth spending money on all this?
Let’s not pull an intrigue, we will answer immediately: yes, it costs, despite desperate public relations of some European countries, despite indecently active advance of electric cars and on all other. It is necessary to examine statistics and forecasts to understand why it so.

Is 2 more than 50?

In 2015 the world car market, according to Organization Internationale des Constructeurs d’Automobiles (OICA), grew on 1.1%. In total 90.78 million vehicles were released. And in 2016 production jumped up on 4.5% to 95 million cars approximately. The total of cars in the world reached 1.38 billion units.
The International Power Agency (IPA) considers quite probable doubling of world vehicle fleet in the next 25 years. That is by 2040 the total of cars in the world can appear within 2.8 billion units. In principle, in it there is nothing impossible, considering number of people and prompt automobilization of such countries as China where sales of cars of all classes from 2006 to 2016 grew almost four times — from 7.2 million to 28 million. Actually, only China for the last four years provided a gain of world vehicle fleet approximately on 100 million cars.
It is interesting that today in a question of global alternatives to oil products on transport at an extensive discussion the main focus of attention is a share of electric cars and biofuel and gas engine direction is practically ignored. It cannot but surprise. Gas engine transport occupies 3.6% of world vehicle fleet today and electric cars – 0.15%.
In absolute figures the picture is following. For the beginning of 2017, according to MEA, there were 2 million electric cars in the world and in 2016 there were 24.45 million vehicles working on natural gas. World propane-butane vehicle fleet by 2016 reached 26 million units. Considering average annual rates of a gain, in the current year the indicator should exceed 27 million. And in the sum both segments — methane and propane-butane at a boundary of 2016-2017 stepped over a mark of 50 million units. Gas motor fuel is the most popular type of alternative motor fuels in the world today. To ignore this segment is all the same as to claim as if 2 million somehow became more than 50 million.

Natural limit

It is possible to object, of course, that dynamics of growth at these segments of alternative motor fuels is incomparable. For example, in 2012 there were only 200 thousand electric cars. That is only in five years their quantity has grown in 10 times. And a number of the sold electric cars from year to year grows. In 2014 it was sold 323 thousand of them, in 2015 — 550 thousand, and in 2016- 750 thousand were sold. In 2017, by our assessment, the sales volume will exceed 950 thousand.
But it should be noted that get to statistics of sales of electric cars both pure electric cars and the loaded hybrids occupying 40% (800 thousand) in universal statistics. It is rather young segment but actively gathering popularity as the hybrid is relieved of a number of problems of the «pure» electric car. So, on the fourth place Toyota Prius Prime (15 thousand sold cars) appears in the list of the most sold electric cars in the USA for the first 9 months 2017. On it the 1.8 l petrol engine is installed.
What about the gas engine direction? In 2010, according to World LPG Association, world propane-butane vehicle fleet totaled 17 million units that is it increased by the present moment more than on 50%.
In 1996 the world methane vehicle fleet totaled about 850 thousand cars. That is for twenty with small years a number of gas cylinder cars on the compressed natural gas grew almost in 29 times.
Annual gain of both gas engine segments exceeds 2-2.5 million units. At preservation of present rates of development of the market of electric cars, their quantity can exceed an indicator in 50 million only in 2035. However, all expect explosive increase in production and sales in an electric segment.
An electric car is an expensive pleasure if to compare it to the traditional car of the same segment. And it has been spoken a lot of about reduction in cost of batteries but electric cars for some reason do not become cheaper. The states should support the electro mobile market with various privileges (for example, immunity from payment of some taxes) and also direct monetary injections. So, in EU countries of the state compensate to the buyer part of the price of the electric car — from 5 to 20 thousand euros. But one thing to compensate a part of the price when the market makes some hundreds of electric cars and another one is when the account already goes on tens of thousands.
The electro mobile market is extremely sensitive to decrease in the state support. And today it is already not simply abstract reflections, it is the reality supported with recent examples. The Netherlands, Denmark, Hong Kong (China) — they only have reduced or to cancel at all privileges as sales of electric cars right there reduced. Besides Denmark and the Netherlands are among the most «electromobilized» countries of the world.
The more electric cars, the less are the opportunities to stimulate their purchase. It means that soon development of electromobile segment will rest against a natural limit.
It is interesting, that any of the countries of the same European Union did not declare curtailing of gas engine programs. Support remains stable. But without it growth would decrease only a little as it is possible to transfer to gas the vast majority of automobiles and trucks. And this operation is rather inexpensive and the economy is obvious as gas (both methane and propane-butane) costs not a lot of. Also gas is an economic way to improve ecological indicators of a car. For example, there are «green» zones in a number of the large cities of France, where it is forbidden the transport below a certain ecological class. There are no restrictions for cars on methane and propane-butane.

Revolution false start

Whether means it, what the electro mobile segment has no prospects at all? It is not so, of course. Eventually, any alternative motor fuel is a niche product which serves the solution of a number of tasks. It is suitable for one thing and is not suitable for another. In a present state the electric car is not suitable for making revolution. It cannot «kill an internal combustion engine» (40% of electric cars have internal combustion engine) and «to finish an era of oil».
It is possible to give an example of reasonable development of an electro mobile segment. It is China. This country today is the indisputable leader of as gas engine (5 million transport vehicles), and electro mobile (1.2 million transport vehicles) segments. This country does not rush in an extreme. It uses all opportunities for achievement of the clear purpose — improvement of quality of life of the population. If there is more eco-friendly transport, it can be used to make air in the cities purer. But it is not enough simply to replace everything with electric cars.
For example, by 2020 it is planned to bring number of the Beijing electro buses from 1 thousand to 10 thousand. Work is carried out within «The plan of action on fight for clean air» but what to do if the coal power plant gives electricity? It is necessary to replace it with something more eco-friendly. And the last coal power plant in Beijing was closed at the beginning of 2017. Now only gas and renewables will be used.
Besides, China modernizes oil refinery and increases quality of traditional fuel and also updates vehicle fleet. In 2016 only in Beijing 424 thousand old vehicles with the high level of the polluting substances in exhaust gases were taken out of service. Along with it the gas engine segment enormously extends.
Nevertheless, we believe that we are at the beginning of large fight of alternative motor fuels in Europe for the released niche in the market. But diesel fuel can move only a little and from a scene it will not leave for good. And the rate on gas makes here more sense as soon privileges for electric cars with expansion of vehicle fleet will be compelled to cancel also other EU countries. Perhaps, soon even such countries as the USA and China will be compelled to hold the electric horses.
And gas without excess noise and impracticable promises will continue winning to itself 2-2.5 million cars a year.