Demand for oil, natural gas, and coal is nearing its peak, the head of the International Energy Agency said in an op-ed for the Financial Times, citing IEA research.
Noting that demand for oil and gas has been growing despite forecasts of peaks, Fatih Birol went on to say that “according to new projections from the International Energy Agency, this age of seemingly relentless growth is set to come to an end this decade, bringing with it significant implications for the global energy sector and the fight against climate change.”
The research, to be released in the IEA’s World Energy Outlook in October, suggests that even if governments do nothing more than they are already doing to curb the consumption of hydrocarbons, demand for all three of them will reach a peak within the next few years Birol said.
Among the reasons for the forecast demand peaks are the shift towards wind and solar energy, and electric vehicles, the latter seen bringing about peak oil demand before 2030, Birol said.
The IEA has also forecast a peak demand moment for natural gas. Per Birol, “This is the result of renewables increasingly outmatching gas for producing electricity, the rise of heat pumps, and Europe’s accelerated shift away from gas following Russia’s invasion of Ukraine.”
Wind and solar generation capacity in Europe has indeed grown strongly over the last few years, even before the war in Ukraine began, but they have not yet been able to replace hydrocarbons and, in Germany’s case, nuclear.
Europe’s largest economy closed its last three nuclear power plants last year and was forced to dismantle a wind farm in order to increase local coal production for power generation.
Heat pump adoption in the UK, meanwhile, is running into obstacles, chief among them the often prohibitively high price and what some buyers complain is failure to perform as advertised.
By Irina Slav for Oilprice.com
- Hedge Fund Partner Blasts Oil Demand Decline Narrative
- The Oil Market Hasn’t Felt The Full Impact Of Saudi Arabia's Cuts Yet
- Oil Prices Falling Back But Set For Another Weekly Gain