A senior executive for Royal Dutch Shell claimed demand could reach its peak as early as 2021, which is much sooner than anticipated by other analysts.
"We've long been of the opinion that demand will peak before supply," said Shell Chief Financial Officer Simon Henry, in a Tuesday conference call.
"And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport," Henry added.
Other major oil providers have estimated that peak demand is farther down the line. Exxon Mobil in its annual outlook said "global demand for oil and other liquids is projected to rise by about 20 percent from 2014 to 2040."
The government of Saudi Arabia claimed oil demand would continue to grow based on increasing consumption in emerging markets.
Meanwhile, the World Energy Council believes peak demand will arrive in 2030 should renewable energy and other technologies such as electric cars keep their fast level of growth. Yet Henry noted that Shell is in a prime position to adapt to the increased popularity of clean energy options.
"Even if oil demand declines, its replacements will be in products that we are very well placed to supply one way or the other, so we need to be the energy major of the 2050s," Henry said. "That underpins our strategic thinking. It's part of the switch to gas, it's part of what we do in biofuels, both now and in the future."
Indeed, Shell will be one of seven international oil and gas firms including BP, Statoil, and Saudi Aramco that will collaborate in a renewable energy investment fund expected to be officially unveiled this Friday. The companies, which are also participants in the United Nations-backed Oil and Gas Climate Initiative, will also announce the next step of their plan to reduce the oil sector's emissions.
Shell on Tuesday reported better-than-expected third-quarter profits of US$2.8 billion yet warned that the company's outlook continues to be uncertain.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More
Comments
No way will the efficiency of vehicles in the developed world be able to overcome the increase in oil demand from the lesser developed world, as it slowly develops. All those billions of young people in Africa and Asia want their own cars and motorcycles. The Chinese will help them build roads, so they can buy millions of Chinese built cars. The Chinese plan for the long term, not for the next quarterly profit figures. The new car owners in Africa and Asia will want to travel in cars, and on jets too. That will burn a lot of gasoline, diesel, and kerosene. All that extra demand will increase the amount of oil consumed for at least the next 15 years, and maybe for the next 25 years. If it wasn't for the advances in fracking and horizontal drilling, we would already be in serious economic trouble. But those two advancements changed everything in the world of oil and gas. For that, you can thank George P. Mitchell, the father of fracking, and 10 children. He lived to be 94.