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
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I am sorry to disappoint him and tell him that peak oil demand won’t be reached even in the next hundred years. Global oil demand will continue to grow year after year albeit at slightly decelerating rate because of government legislations, to some extent the impact of EVs and also because the notions of global energy transition and net-zero emissions are illusions. They are the biggest lies in history.
Global oil demand will have to continue growing in order to feed a world population projected to rise from 8.0 billion currently to 9.7 billion by 2050 and a global economy expected to grow from $174 trillion based on purchasing power parity (PPP) now to $245 trillion by 2050. The only real limitation to future growth of oil production is physical exhaustion of reserves. This isn’t going to happen in the next hundred years because technology will improve the recovery factor (R/F) from reserves over the years. Moreover, global oil reserves would have been bolstered by new offshore discoveries, Russia’s Arctic oil and gas resources estimated to be enough for two centuries of Russian oil production in addition to the development of Iraq’s and Venezuela’s spectacular oil wealth.
And despite 35 years of heavy government subsidies and daily media promotion, there are currently 1.4 bn internal combustion engines (ICEs) compared with 26 million EVs. The EVs currently displace only 1.39 million barrels a day (mbd). By 2040 the number of EVs would have risen at best to 40 EVs compared with 1.45 bn ICEs. This will enable EVs to displace a mere 2.27 mbd.
Peak oil demand is a myth. Oil and gas are here to stay. They will continue to drive the global economy throughout the 21sy century and probably far beyond.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert