HAMISH MCRAE: Not all together in electric dreams over switch from oil and gas

When Mr Bean, the world’s largest car maker and the top brass at OPEC all agree on something the rest of us should sit up and take notice.

Rowan Atkinson made the headlines last week when he was accused by the Green Alliance pressure group of damaging the take-up of electric cars by writing a newspaper article in which he said that they were boring.

That was a bit unfair as he was an early adopter. He had a cute little BMW i3 that, I’m told by a friend, kept running out of charge.

It is a flattering notion, if a little absurd, that one column by a comedy actor should have such global influence. The reality is that the switch to fully electric cars has slowed not only in the UK but just about everywhere. Overall numbers are still climbing, but at a more muted rate than predicted as the disadvantages become clear.

So Toyota may be right in its scepticism about the take-up rate. Its chairman, Akio Toyoda, said last month the firm thought pure electric cars would top out at 30 per cent in the market. ‘Engines,’ he said, ‘will surely remain.’

Car-nage: Mr Bean star Rowan Atkinson was accused by of damaging the take-up of electric cars by writing a newspaper article in which he said that they were boring

So much for plans on the Continent and in the UK to ban sales of new petrol and diesel cars by 2035 – and a long way from a forecast by Bloomberg that electric cars would account for 70 per cent of new car sales by 2040.

There is a similar clash of opinion about the long-term prospects for oil. The most recent forecasts from OPEC, the Organisation of Petroleum Exporting Countries, raised the likely level of demand in 2045 to 116 million barrels a day, which compares with 102 million barrels a day last year.

By contrast, the International Energy Agency, thinks demand will have started falling by the end of this decade, and its long-term forecast is that it will be down to 55 million barrels a day by 2050.

What should we make of this? You could say both Toyoda and OPEC are talking their book. It is in Toyota’s interest that internal combustion engines should remain part of the line-up for, though the firm pioneered the development of hybrids with the ubiquitous Prius, it has been relatively slow in producing pure electric cars.

As for OPEC, the longer oil and gas hold their dominant share of energy supplies, the longer its members have to build up their overseas assets and develop alternative sources of revenue.

On the other hand, if this view is even half right and the move from oil and gas is slower than currently predicted, there will be profound consequences for all of us, not least for investment strategy.

For a start, there will be more resistance to governments that use environmental arguments to push political objectives. You see that already in the concern over ending gas boiler and cooker sales.

To say this is not to take a position on the issue. For the record we have a couple of heat pumps and own a Prius. It is simply to point out that if the speed of transition from oil and gas globally turns out to be slower than their current policy anticipates, governments will struggle to retain popular support.

Next, we should be aware we are no longer in a world where the West decides or even much influences what everyone else should do. The US is still important and it is quite possible it will remain the largest economy, notwithstanding the challenge from China. But the emerging world as a whole continues to gain ground vis-a-vis so-called advanced countries.

Note that since Russia invaded Ukraine, India has joined China as its main market for oil.

As for investment, there are a string of implications. For a start, a slower switch away from oil and gas helps the American economy. The US has been the world’s largest oil producer since 2018 and has been increasing its dominance. It now pumps nearly one-fifth of the world’s total supply.

That is by no means the only reason for the strong recovery that its economy has made post-pandemic, the fastest growth of any of the G7, but it is certainly one.

It will also lead to a rethink about ethical investment. You can understand the reasons why some funds do not want to invest in fossil fuels.

However, if that choice cuts the investment by Western companies in oil and gas exploration, it boosts the relative position of OPEC and other non-Western suppliers.

Finally, in purely financial terms it makes investment in Western oil companies a rather better proposition. They are in a growth market, not a shrinking one, and you get a fat dividend yield.