NEWS

One of the examples I have offered up for those who believe that peak oil demand is right around the corner due to the rise of electric vehicles (EVs) is Norway. For many years, Norway has had the highest growth rates and highest penetration of EVs in the world. This is a result of generous tax breaks and incentives like free city tolls and parking, combined with heavy taxes on diesel and gasoline.

As I explained in a 2016 article, Norway’s growth rate for EVs had averaged an incredible 110% per year for seven years. Nevertheless, crude oil demand had risen during that time span. Further, Norway is surrounded by members of the European Union (EU). During that same time frame, EU oil demand had declined by 14%. Norway lagged far behind EU countries despite its explosion of EV sales.

In a 2017 article, I reported that EVs had achieved a 5% share of all passenger cars on Norway’s roads at the end of 2016. That was greater than five times the market share in the U.S. It was also reported that 42% of all Norway’s new car sales last June were EVs.

Nevertheless, and despite the fact that all of Norway’s neighbors with similar demographics had seen double-digit declines in oil demand over the previous decade, Norway’s oil demand increased.

One of the explanations for this seeming inconsistency is that Norway’s population is growing. In addition, there are lots of gasoline- and diesel-powered vehicles still on the roads. But one thing is obvious. At some point, an increasing share of EVs on Norway’s roads will impact the country’s oil consumption. It just isn’t happening as quickly as most EV proponents might have imagined.

But an inflection point may have been reached in 2017. Last month the Norweigan government released its final 2017 figures for Sales of Petroleum Products. For the first time since at least 2014, Norway’s consumption of gasoline and diesel declined across the board.

Motor gasoline sales declined by 2.9%, dutiable diesel fell by 2.7%, and duty-free diesel declined by 2.6%. This decline follows sales that were flat in 2014, and then grew by 1% in 2015 and 3.2% in 2016. Overall petroleum product sales declined by 2.2%, although some categories of consumption, such as heavy fuel oil, jet kerosene, and other petroleum products all showed higher consumption.