ENVIRONMENT: Peak oil demand on the horizon

The International Energy Agency (IEA) says global oil demand will slow “markedly” in the coming years and a peak is “on the horizon” reports The Week.

“The shift to a clean energy economy is picking up pace,” said the IEA’s executive director, Fatih Birol, “with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency, and other technologies advance.”

The report from the Paris-based agency, which was founded in 1974 to facilitate cooperation on energy and secure oil supplies, has reignited debate over whether the world has reached the point at which oil demand and production tops out and starts to decline – known as “peak oil”.

The milestone would be significant for the planet because burning oil, along with gas and coal, is “creating the vast amount of emissions causing the global climate crisis”, explained The Independent.

So “if peak oil is to arrive in the near future”, said Forbes’ energy writer Ariel Cohen, “then our current decarbonization strategies… may be sufficient to reach the objectives of the Paris Agreement by 2050 with a temperature increase well below 2C in comparison to pre-industrial levels”.

OPEC 
The IEA assessment “will make gloomy reading for the Organization of the Petroleum Exporting Countries [Opec] and other petroleum producers”, said The New York Times. The report is also “likely to add to fears among oil traders that China, for decades the key driver of global oil demand growth, no longer performs this role”, it added.

There is a “dawning realization that China’s economic recovery from Covid isn’t producing the same sort of oil demand growth that China had prepandemic”, Henning Gloystein, a director at political risk firm Eurasia Group, told the paper.

By the end of 2028, said the IEA, more than 155 million electric vehicles will have been sold globally, half of them in China. This will mean that three million barrels of oil a day “that might have been consumed will instead remain in the ground”, said the NYT.

The continued growth of the electric car industry will be a key driver in the development, agreed Bloomberg. “For more than a century,” said the news site, “two trends in global transportation have been relentless: humanity’s desire for more cars and the consumption of ever-more oil to fuel them,” but “the second part, at least, may finally be coming to an end”.