Demand for oil, natural gas, and coal is set to peak before 2030, which undermines the case for increasing investment in fossil fuels.
This is one of the outtakes from the International Energy Agency’s World Energy Outlook, released earlier today.
While the agency does admit that investment in fossil fuels will remain necessary, it claims the growth era is over.
Last month, the agency’s head, Fatih Birol, wrote in an op-ed that oil, gas, and coal demand were all going to peak before 2030 thanks to the increase in EV adoption and slower Chinese GDP growth.
Now, this is being reiterated in the IEA’s outlook, which talks about the emergence of “a new clean energy economy, led by solar PV and electric vehicles.” The report notes that investment in “clean energy” has gone up by 40% since 2020, emphasizing the point that lowering emissions has not been the single motivator.
According to the IEA, “The economic case for mature clean energy technologies is strong” and energy security is an increasingly important consideration, too.
“In 2020, one in 25 cars sold was electric; in 2023, this is now one in 5,” the report also said as part of its case for EVs. However, an EV sales database reveals that for the first half of this year, sales of battery electric vehicles, the true EVs, only represented a tenth of total sales. Combined with plug-in hybrids, EV sales accounted for 14.1% of total sales.
When Birol first mentioned peak oil, gas, and coal, he prompted an immediate reaction from OPEC, which slammed the head of the IEA for making unwise predictions that could threaten the world’s energy supply security.
“Such narratives only set the global energy system up to fail spectacularly. It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world,” OPEC secretary-general Haitham al-Ghais said in September.
The release of the World Energy Outlook may now prompt a similar response from OPEC, which forecast recently that demand for oil is going to continue rising at least until 2045.
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By Irina Slav for Oilprice.com
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Its projection has been smashed by investors flocking to invest in oil and gas
and by OPEC’s projection of global oil demand rising to 116.0 million barrels a day (mbd) between 2022 and 2045.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert
Looks like they were fairly accurate predictions from the IEA in 2020. It appears thier inaccuracy is mainly down to overestimating demand growth but given how no-one knew how exactly the pandemic would play out they were pretty close.
Im not sure where you are getting you figures from but the below is from their 2020 report.
"Global energy demand rebounds to its pre-crisis level in early 2023 in the STEPS, but this is delayed until 2025 in the event of a prolonged pandemic and deeper slump, as in the DRS. Prior to the crisis, energy demand was projected to grow by 12% between 2019 and 2030. Growth over this period is now 9% in the STEPS, and only 4% in the DRS."
A year or two ago you predicted that electric vechiles would only make a tiny percentage of vechiles by 2050. Given that they are currently about 50% of 2 and 3 wheel vechile sales, and 20% of private passenger vechiles perhaps you would like to update your prediction to a more realistic level.
It's hard to see where all this future rise in demand is coming from given that china's gasoline demand has peaked this year, and usa and Europe peaked long ago. Perhaps you can direct me to some actual figures that show that oil won't be in terminal decline in the next couple of years.S