The Organization of the Petroleum Exporting Countries (OPEC) has issued its annual World Oil Outlook report, and to absolutely no one's surprise, it's pretty optimistic about the future of fossil fuels.
Among OPEC's big predictions:
1. By the year 2040, 94 percent of vehicles that roam the world's roads will still run on oil-based fuels.
2. By 2040, battery-powered electric vehicles will constitute just one percent of global vehicle sales.
3. Hybrid electrics -- a category of vehicles that use fossil fuels and could include everything from the Toyota Prius to the Chevrolet Volt -- will be slightly more successful, making up 14 percent of global vehicle sales.
4. Other types of vehicles that run on hydrogen cells, CNG, and other alternative fuels will gain little to no ground over the next 25 years.
5. Despite advances in fuel efficiency, cars and trucks in 2040 will require about 17 percent more fuel than they do today, simply because their numbers are increasing.
6. Oil prices will tick up about $5 per barrel each year, thanks to growing demand and lower-than-expected oil production in non-OPEC areas.
Are these predictions on target or wishful thinking?
Obviously, OPEC has a big interest in driving enthusiasm for fossil fuels, and reports like this are an important tool for doing just that. They keep member states, oil producers, and investors bullish, encouraging continued investment in surveying, extraction, and refining. Pessimism about oil futures could upend livelihoods, companies, and perhaps even whole nations.
All of which means that anything OPEC says about oil ought to be viewed pretty critically.
On the other hand, some of the claims in the World Oil Outlook jibe with other reports we've seen. For example, we've been told that by 2030, one billion additional cars and trucks will travel Planet Earth's already-crowded roads. Most will run on fossil fuels.
Also, we know that today's low fuel prices have had a cooling effect on sales of hybrids and electrics. Instead, consumers are opting for less-efficient larger vehicles, which has caused nationwide fuel economy figures to fall in the U.S.
But let's not forget that OPEC makes a number of assumptions in its report -- namely, that there will be few advances in the field of battery technology, that few countries will incentivize hybrid and electric sales, and that oil production outside OPEC will remain low.
However, we know that many companies are working hard to develop new, efficient, affordable batteries; that states like California and countries like the U.S. and China are providing subsidies and other attractive benefits to owners of zero-emission vehicles; and that Congress recently lifted a ban on U.S. oil exports that was instituted four decades ago in direct response to OPEC.
Bottom line: 25 years is a long time, and there are lots of variables at play. OPEC may have history and demographics on its side, but hybrid and electric car fans have entrepreneurs and governments hoping to jump start the green car economy.