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Peak oil demand could come around 2030 at 111 million bpd in the current market as road transport electrification and efficiency gains in all sectors offsets increasing petrochemical and aviation growth, Norway’s Equinor said in its Energy Perspectives report on Thursday.
That assumption is one of Equinor’s scenarios for energy transition, Reform, which suggests that oil demand will grow robustly through the early 2020s, level out in the second half of the decade, peak at 111 million bpd around 2030, and then fall to 105 million bpd by 2050.
Equinor—which dropped the name Statoil last month to reflect a “broad energy” company rather than being associated only with oil—is discussing two other scenarios in its Energy Perspectives—the Renewal scenario and the Rivalry scenario.
Renewal assumes global cooperation, fast energy transition, and the achieving the Paris Agreement’s target to limit global warming to well below 2°C. In Renewal, peak oil demand could come in the early 2020s, if faster battery technology development, continued policy pushes, and larger efficiency improvements occur soon. In that case, oil demand could be just below 60 million bpd in 2050, according to Equinor.
The company’s third scenario, Rivalry, assumes that geopolitical volatility, boom and bust cycles, destructive market rule, and lack of cooperation will lead to continued oil demand growth all the way through 2050, at 122 million bpd in 2050. In the Rivalry scenario, geopolitical conflict and other political events take priority over climate change.
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“Unfortunately, we currently see too many signs of the Rivalry-scenario. If continuing, they will negatively impact necessary global collaborative efforts and economic growth which are keys to drive the world in a sustainable direction,” Equinor’s Chief Economist Eirik Wærness said.
Yet, in all three scenarios, large investments in new oil discoveries will still be needed—although significantly less in the Renewal scenario—to offset the decline from existing fields, said Equinor.
“The transition to a more sustainable energy system is too slow. A sustainable development path, consistent with the 2-degree target, does not allow for further delays in policy, industry and consumer action to reduce emissions,” the company said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.