Although natural gas is projected to be the fastest-growing fossil fuel over the next two decades, the global oil market won't likely be far behind.
Multiple organizations project that global oil consumption will grow by an annual average of over 1 million barrels per day (BPD) through 2030. However, natural gas is projected to grow at an even faster rate, so the oil's global energy market share will decline.
In the 2030s, oil demand is finally forecast to begin slowing as a result of fuel economy gains and competition from electric vehicles. Oil demand is projected to peak in the early 2030s, but it will do so at a level 10-15 million BPD higher than current production.
That means that new oil supplies will have to be continually added to account for both new demand and declines in existing fields. This means the upstream oil industry will remain a large, viable industry for the foreseeable future. It is not - as some have projected - on its last legs.
Most new global oil supplies over the next decade are projected to come from the U.S., Canada, and Brazil. These new supplies are projected to be profitable at below $100/barrel, and that will help moderate oil price spikes.
The viability of the oil industry will remain even when oil demand plateaus in the 2030s, due to the large sums of investment and activity to maintain oil production levels as existing fields deplete. Oil will no longer be a growth industry in the 2040s, but the industry will remain a vital part of the global energy system.
Oil's staying power is a result of its high energy density, convenience, availability, and existing infrastructure (both personal transportation and oil transport infrastructure).
But this price premium will ultimately be oil's downfall, as it speeds the adoption of alternatives to oil such as electric vehicles.
By Robert Rapier
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