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.
By Irina Slav for Oilprice.com
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