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How Driverless Cars Will Upend Energy Markets

How Driverless Cars Will Upend Energy Markets

What began as one of ten “moonshot ” projects for the company is now proceeding steadily as Google intends to test prototype models of its self-driving vehicles on public roads this summer, claiming its computerized cars are actually safer than those steered by humans. These new vehicles come equipped with standard automated additions, such as cruise control and parking assist, pushing the boundaries of machine control even further. The plan is to eventually deliver a car that can automatically drive from origin point to destination without any human intervention at all.

Google's fleet of automated cars have already amassed more than 1.7 million miles on the road - while experiencing a mere dozen accidents. None of the accidents caused any fatalities, and Google maintains that incidences were caused by fallible humans rather than the driverless vehicles themselves. With this remarkable record backing them, Google will now move forward to test cars that it has built in-house rather turning to traditional model manufacturers such as Lexus to house the software.

Assuming that Google’s driverless technology will ultimately prevail, achieving mainstream acceptance and widespread public adoption, the reverberations of its success will be felt throughout several key industries. The introduction of automated vehicles stands to impact both economic and societal aspects of travel and transportation. Related: Top Three Rebound Stocks In The Permian Shale

With the implementation of automatic vehicles on major roadways we will likely see accidents decrease considerably. A large percentage of car crashes and other accidents are the result of human error, risks which would be almost completely eliminated with the adoption of cars that drive themselves. This change will lead to lower insurance premiums (even the eradication of traditional car insurance altogether) and significant savings for consumers. Road congestion will decrease and travel times will diminish, as the vehicles communicate wirelessly with one another and work together to keep traffic flowing smoothly.

Experts believe that autonomous vehicles will become the norm within the next ten years. What was once a space age innovation has become a very real way to mitigate many of the problems associated with traditional automotive driving.

Google’s uniquely designed prototypes, bearing a resemblance to other diminutive vehicles like the Smart Car, are capped at a speed limit of 25 mph and fitted with a steering wheel and brake system per California road requirements. The company is said to be producing many of them in America’s first-and-forever Motor City, Detroit, MI. Google engineers are hesitant to test the tiny cars on snowy roads, however, so they will be taking to the streets of Mountain View instead to undergo trials.

And while Google is at the forefront of the “connected” car revolution, it's not the only name in the game. Apple has been keeping its efforts largely under wraps, but there are strong indications that it is also seriously working on a driverless project. BMW, Audi, Tesla and Mercedes-Benz are all developing their own solutions as well. In Audi's case, we soon could see some serious competition between the luxury automaker and Google emerge, as the two top contenders duel to bring a driverless product to market. Related: Russia’s Rosneft To Help Venezuela’s Oil Sector

Audi intends to ship its A8 sedan with automated technology perhaps as early as 2017. A specially equipped Audi Q5 has already made a 3,400-mile trek from San Francisco to New York with the computer in control of the vehicle 99 percent of the time. Another challenger to come from left field in the driverless space is Chinese search leader Baidu, which is also looking to premier a fully automated vehicle within the year. Of course, bringing these prototypes up to speed is still a long way from anyone being able to purchase one. But we’re getting closer.

Of course, the automated, “driverless” nature of the cars also stands to impact the way in which we consume and utilize carbon-based fuel. Smaller and more aerodynamic, these cars have the potential to reduce overall transportation energy demand if put to widespread use.

Assuming they catch on, these cars will change everything about how we get around. Once we no longer need humans at the wheel, vehicles will be able to travel together in close fleets, moving at one steady speed and drastically reducing wind drag.

The Rocky Mountain Institute has concluded that platoon travel alone could reduce fuel consumption by 20-30 percent. Additionally, these vehicles are highly compatible with car-sharing programs, and, using their ability to communicate, will also be able to reduce the fuel consumption and emissions associated with searching for a parking space. This opens up additional unforeseen possibilities – what if our new autonomous cars have a “valet” function, which allows them to operate not only driver-less, but totally passenger-less? May we one day find ourselves sending our cars out to run errands, or pick up the kids from school?

On the other hand, in a study from the University of Michigan, research concluded that the use of driverless automobiles will lead to increased energy consumption, as people tend to run more separate errands with them than they would if they were driving themselves. However, “the upside is that vehicles could drive much more efficiently,” said Ethan Elkind, associate director of the Climate Change and Business Program at the University of California at Berkeley. Nearly every firm currently working to develop a self-driving vehicle model is also opting to power it using alternatives to fossil fuels. “Renewables”, such as electricity and hydrogen, will likely play a large part in the future development of autonomous vehicles. Related: Texas Production Down, Gas Takes Biggest Hit

Cleaner-running cars may prevent autonomous technology from falling victim to its own convenience. According to Direct Energy, increased vehicle electrification and a more expansive charging infrastructure will have enormous implications as the industry moves towards a “smarter” energy grid system. Connecting vehicles directly to a power grid which intuits energy supply and demand stands to disrupt driving even further, as EVs and autonomous driving technology continue to evolve alongside one another.

To this end, self-driving technology stands to not only impact energy markets, but other important aspects of the transportation sector as well. As alternative fueled, autonomous vehicles are introduced in the personal vehicle market, they’re just as close if not closer to implementation in other areas too. On May 6, 2015, in the state of Nevada, the first self-driving truck hit American roads. The Freightliner Inspiration Truck from Daimler will surely result in a massive ripple effect throughout the country when it begins taking over roadways en masse.


Overall, these drone-like, computerized automobiles stand to slash hundreds of billions of dollars of annual revenue, or even trillions, from a diverse array of entities. Everyone from health insurers to car wash operators, gas companies to parts suppliers, will be impacted by the arrival of the self-steering vehicle.

Of course, erasing all use of traditional automobiles that use gasoline and oil does not seem likely anytime soon. But these driverless cars, when they do arrive, will change our relationship with fossil fuels forever.

By Maria Ramos for Oilprice.com

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