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Page added on February 22, 2016
Why Demand Will Likely Peak By 2030
Will global oil demand peak by 2030? Is peak oil demand the new peak oil supply? Many trends now point in the direction of this remarkable possibility:
- In December the nations of the world agreed unanimously in Paris to leave most of the world fossil fuels in the ground.
- Oil demand has been declining in developed countries for over a decade.
- Electric vehicle sales are exploding around the world, especially China.
- Battery prices are continuing their unexpectedly rapid price drop.
- Tesla and Chevy now say their new 200-mile-range EV could cost Americans $30,000 — a game-changing price.
In November, a Bloomberg Business story, “The Oil Industry Has Been Put on Notice,” warned “the transformation of oil markets may be coming sooner than we think.” This recent Bloomberg New Energy Finance chart includes oil forecasts the International Energy Agency (IEA) has made since 1994:
CREDIT: Bloomberg
Is it possible that the world is actually going to follow the path of the “Transport Transformation Scenario” and peak in oil demand by 2030 or so? At this point I think is not only possible, but likely.
It is increasingly clear that technology will be here to make that possible — indeed, the technology is almost here now (see this recent post, “Tesla And GM Announce Affordable, Long-Range Electric Cars”). Same with the renewables needed to power electric cars carbon-free (see “Why The Renewables Revolution Is Now Unstoppable“).
The core issue now is whether the nations of the world will embrace the policies needed to accelerate those technologies into the marketplace fast enough to cause demand to actually peak in one to two decades globally — much as oil demand in the industrialized countries appears to have peaked a decade ago.
The key reason for optimism is that in the historic Paris climate deal from December, some two hundred leading nations unanimously embraced a plan that will leave most of the world’s fossil fuels unburned. That plan is an ongoing effort of increasingly deeper reductions in carbon pollution aimed at keeping total warming “to well below 2°C [3.6°F] above preindustrial levels” — with the parties further agreeing “to pursue efforts to limit the temperature increase to 1.5°C above preindustrial levels.”
To keep warming below 2°C requires essentially every country to have zero net fossil fuel emissions by century’s end. The current pledges by 186 developed and developing countries — intended nationally determined contributions (INDCs) — only take us the first step of the way:
The INDCs flatten out carbon pollution emissions through 2030. Not coincidentally, global CO2 emissions have plateaued the last two years, which suggests the multi-trillion-dollar global shift in investment from high-carbon growth to low-carbon has already begun.
Humanity may already have a precedent for voluntarily leaving so much of a valuable fossil fuel in the ground: Global coal consumption appears to have peaked back in 2013.
That peak in coal use is being driven by a broad trend over the last decade of the industrialized countries reducing coal use coupled with the recent sharp reversal in Chinese coal consumption. We already have a similar trend over the last decade of the industrialized (OECD) countries reducing oil consumption:
CREDIT: BP Statistical Review, peakoil.com
The question then is whether the developing world’s recent rapid growth in oil consumption will slow over the next 15 years — and then ultimately reverse itself as the developed world has. After all, to stay anywhere near the 2°C pathway, global fossil fuel consumption has to start declining fairly rapidly after 2030.
As with the reversal of global coal trends, the reversal of global oil trends will depend a great deal on China, since China has been the key driver of the developing world’s growth in oil demand. Significantly, just as China’s recent coal policy has been more motivated by its desire to slash its horrendous urban air pollution than by its desire to avoid catastrophic climate change, so too is China’s oil and transportation policy. After all, it is both coal burning and dirty vehicles that give cities like Beijing its exceedingly unhealthy air quality.
That is one reason China has made such a massive investment in batteries and electric vehicles (EVs). The other reason is that China understands the future is low-carbon and then zero-carbon — so it plans to become the world leader in both the production and use of battery electric vehicles, just as it already has in both wind and solar power.
The Chinese EV market tripled last year. China’s BYD Auto Company — which is backed by Warren Buffett — said last month it had become both the biggest EV maker in China and in the whole world!
Here are China’s monthly EV sales for the past three years:
CREDIT: EV Volumes
BYD projects that China’s EV market will double in size this year, and again in 2017, and then again in 2018. That would mean China’s EV sales would blow past one million vehicles a year with three years.
“If China gets moving on electric cars then that would automatically lower prices and have a favorable ripple effect across the whole world,” as Ernst and Young auto expert Jean-Francois Belorgey has said. That is precisely what happened in the solar photovoltaics industry, which led to the exponential explosion in solar power worldwide this decade.
We appear near the same kind of inflection point in batteries and electric cars that we were in PV. Yes, oil prices are low, but even at these prices, EVs still have a much lower per-mile fueling cost than gasoline cars.
You might think that low oil prices would be fueling a boom in oil consumption in developing countries. But as the Wall Street Journal explained last week, low prices for oil (and other commodities) hurt the economies of many developing countries, stifling demand growth.
For the longer term, two things matter most. First, battery and EV trends are all but certain to continue as volume grows exponentially. Second, while the world is starting to get serious about avoiding catastrophic climate change, we haven’t gotten desperate yet, which is inevitable in the 2020s as the reality of accelerating climate change becomes increasingly obvious and the need to adopt increasingly strong policies to keep total warming below 2°C becomes increasingly urgent.
The idea of peak oil supply — the notion that our reach (demand) for oil would exceed our grasp (global supply) — is dead. It appears instead that homo sapiens might just be wise enough not to over-reach, that we may voluntarily let go of oil (and coal) before they destroy a livable climate for the next 50 generations. Let’s hope so.
31 Comments on "Why Demand Will Likely Peak By 2030"
eugene on Mon, 22nd Feb 2016 8:36 am
And the BS continues to flow. One thing about BS is there’s no peak BS or, it appears, peak demand.
ERRATA on Mon, 22nd Feb 2016 8:49 am
How many electric cars actually goes to the United States? Is not it unfair advertising – press propaganda? I mean, how many electric cars can be seen on the street, not in the virtual computer world.
Clearly we need to distinguish “if sold” from “how much actually goes.” (!!)
Do you solved the problems with too rapid depletion of the battery ??
Really? Sold drones (amateur) are able to fly only 20 min.
A problem with the rapid aging of the battery after 4 years (decrease capacity in Ah)?
In Europe, somehow, mysteriously abandoned plans “tram without wires.”
Building a new tram lines continues with the wires (trolley).
It’s probably not a coincidence?
Specialist magazine: “Transport and Environment” clearly writes: “The car with an internal combustion engine uses approx. 40% of the energy contained in the fuel. And a car driven by an electric motor only about 14% -16% of the energy contained in coal, that goes to the power plant.
Electric cars represent, so a significant increase in CO2 emissions / per kilometer.
Due to the relentless laws of physics for 130 years, the efficiency of electro-transmission networks increased only slightly.
Kenz300 on Mon, 22nd Feb 2016 9:01 am
Climate Change is real…… utilities need to deal with the cause (fossil fuels)
100% electric transportation and 100% solar by 2030
https://www.youtube.com/watch?v=RBkND76J91k
————
Exxon’s Climate Change Cover-Up Is ‘Unparalleled Evil,’ Says Activist
http://www.huffingtonpost.com/entry/exxon-evil-bill-mckibben_561e7362e4b028dd7ea5f45f?utm_hp_ref=green&ir=Green§ion=green
Kenz300 on Mon, 22nd Feb 2016 9:02 am
The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles
http://www.huffingtonpost.com/entry/koch-electric-vehicles_us_56c4d63ce4b0b40245c8cbf6
Inside the Koch Brothers’ Toxic Empire | Rolling Stone
http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924?page=2
brianr on Mon, 22nd Feb 2016 9:45 am
The US Government still has to subsidize (tax the people who do not participate) electric vehicles and solar, I believe.
Wake me up when there’s a reliable electric vehicle that won’t need a $2000 battery replacement every 4 years.
No doubt, eventually, electric vehicles
will be the predominant transportation mode, but signalling the death of fossil fuel vehicles in the next 14 years is probably premature.
shortonoil on Mon, 22nd Feb 2016 9:47 am
“Will global oil demand peak by 2030?”
Another – dollar short and a day late! Global demand has already reached its maximum. We have witnessed a very weak increase in demand (less than half of historical levels) over the last couple of years as a result of unprecedented Central Bank currency creation. That has fueled massive mal-investment in otherwise uneconomical projects. It resulted in some increase in petroleum usage, but it is not sustainable long term. The increase in demand that has been seen recently has been synthetic; it has not originated from increasing economic activity.
Prices have now fallen below the full life cycle production cost for the average producer, and this trend will continue into the future. Petroleum no longer supplies enough energy to the economy to support economic growth. Without economic growth there can be no sustainable increase in demand:
http://www.thehillsgroup.org/depletion2_022.htm
Any claims that demand is yet to reach its maximum level is pure hyperbole, and is a complete contradiction to the evidence that is now available!
http://www.thehillsgroup.org/
rockman on Mon, 22nd Feb 2016 9:47 am
Why would the Koch’s spend $1 fighting a product that has no negative effect on their business? This pulling out the Koch bogey man tactic is so lame and transparent.
penury on Mon, 22nd Feb 2016 9:47 am
And so it goes. If they knew what things would be like in 2030 they could improve the world. People gots to be people, and they will consume whatever is available, and then consume even more. And by the way, if we are 100 per cent solar by 2030, it will not be a happy time. more like 700BCE.
John on Mon, 22nd Feb 2016 10:03 am
At the moment it is hard to see oil consumption peaking by 2030.
People in every country want to live like Americans with a nice big house and a car.
Global coal consumption has gone from 3 to 7 billion tonnes in 40 years, mainly driven by China and India. India is building power plants to add another billion in coal consumption.
Claiming the world has reached peak coal may be premature.
China electric car sales may be up be ICE vehicles sales are now a staggering 24 million. China has 172 million passenger vehicles on it’s roads.It still has a long way to catch up with ownership in Europe. When it does by around 2050 it will have 800 million vehicles and consume 30 million barrels of oil per day. Assuming 30% of vehicles are electric by then.
John on Mon, 22nd Feb 2016 10:08 am
Link to data
http://www.chinadaily.com.cn/business/motoring/autodata.html
twocats on Mon, 22nd Feb 2016 10:09 am
@rockman,
I don’t know all the economics of EV versus the Koch business model, but when you have the bogey man coming out into the full light of day for stuff like this:
http://www.bloomberg.com/news/articles/2015-12-22/buffett-s-utility-scores-win-against-musk-s-solarcity-on-credits
it’s time to be wary. economies operate under the rules provided and are man-made, deliberate things, not universally operating principles.
PracticalMaina on Mon, 22nd Feb 2016 10:20 am
$2000 in maintenance every 4 years? What does this thing think it is? A vehicle? I know people who spend that in truck tires in 4 years. And how many break jobs will you save in that 4 years, they are cheap in my car but most Americans don’t drive re-branded Daewoo products. We need to get real good at recycling lithium, and we need to get a new generation of battery that has better power density and is not made out of anything vaguely rare.
And Penury, in 700BC there were no triple insulated windows. No mylar wrappers for chip bags that you can use to concentrate that light, no solar concentrating towers that could be used to make more glass for more passive solar power…YAY
twocats on Mon, 22nd Feb 2016 10:20 am
It’s insane to talk about peak demand as if this has some neutral or even positive connotation – being done out of the goodness of our hearts because of climate change, Paris, etc, and not because the world economy has been in a tail spin since 2007.
http://money.cnn.com/2014/06/11/news/economy/middle-class-wealth/
and they mention spain and italy being BETTER off the america!! do I need to remind people what the acronym PIGS stands for? Do people just not remember those three years where that was a thing? Greece and Italy are almost back to the Renaissance.
rockman on Mon, 22nd Feb 2016 11:06 am
cat – I’ve read some stories why the utility commissions aren’t in love with local sun gatherers: being a utility means the customers get tapped for the costs + utility profits. IOW it’s a fixed cost. As some drop off the grid the remaining customers still have to cover it 100% by law. So as some go off grid those remaining see their bills increase. For instance once I had to pay a minimum to my water utility even though I had a well and didn’t use its water. Imagine if that utility had to pay me for water if I supplied some to my neighbors.
sidzepp on Mon, 22nd Feb 2016 11:34 am
Meanwhile, with current population growth rates, another 1.2 billion people will inhabit the planet causing increase stress on food, habitat destruction, water resources and the necessity of new jobs. As technology eliminates jobs, more stress will be put on government to increase spending thus creating larger deficits. It is a vicious circle we will have difficulty in escaping.
twocats on Mon, 22nd Feb 2016 11:54 am
rockman – fair points.
I agree, its not a black/white good/evil question (though koch bros would be better off in a ditch).
And I think what you are highlighting are hurdles to the “transition to renewables” that greenies don’t recognize (even beyond the pure physics issues, which are seeminly intractable).
marmico on Mon, 22nd Feb 2016 12:17 pm
2felines is not up-to-date.
U.S. oil consumption per capita stepped down in 2005 and will relentlessly decline (ICE CAFE,EVs,urbanization, demography, etc.) thereafter.
twocats on Mon, 22nd Feb 2016 1:16 pm
People who could afford teslas and priuses have purchased them and are driving as much if not more than they were 10 years ago.
those that can’t afford them had been cutting back on consumption of gas, but are now back up. didn’t total miles driven recently retake the highs on an upward trend? i see people idling in their trucks for hours at a time up here in the NW.
if businesses aren’t using as much electricity due to a drop in manufacturing from the global depression, well, then that’s another conversation.
you can throw all the acronyms you want shmarmico, doesn’t make it true.
I will agree kids are texting before driving as a trend, so on a per capita basis there has been a cultural shift with technology. Hasn’t stopped demand from increasing overall. And I don’t think all the cuts have been as feel-good as you make it out to be. Kids don’t drive because insurance and upkeep is expensive, while data is paid by the folks. If you made the economy hum again, kids would go back to driving. Demand destruction.
Apneaman on Mon, 22nd Feb 2016 1:33 pm
twocats, I too see more economically unproductive idling. If they are not idling in the traffic or the drive thru line up they are idling in the parking lot while eating and drinking and now you can see them idling away while they yak, text or surf on their shiny black rectangles. I wonder how much waste that adds up too?
Tim Hortons lineup on Christmas Day at least 100 cars long in Truro
‘We love our Tim’s around here,’ says coffee fan who caught long lineup on video
http://www.cbc.ca/news/canada/nova-scotia/christmas-day-tim-hortons-truro-1.3381155
PracticalMaina on Mon, 22nd Feb 2016 1:38 pm
Apneaman it a double wammy on the gut
http://www.upi.com/Health_News/2016/02/22/Study-Air-pollution-increases-risk-for-obesity-diabetes/6451456146674/
It is not our fault America, no one told me sitting in a fast food drive through with my car idling was gonna make us fat for multiple reasons.
marmico on Mon, 22nd Feb 2016 1:40 pm
you can throw all the acronyms you want shmarmico, doesn’t make it true.
Carry on with your doom porn, 2felines. Rockman’s POD is just the market, dickhead. Rockman doesn’t even know which way a supply curve slopes.
BP reserve production ratio. ROTFLMFAO.
PracticalMaina on Mon, 22nd Feb 2016 1:56 pm
http://www.bloomberg.com/news/articles/2016-02-22/recession-already-reality-in-spots-from-west-virginia-to-wyoming
So states with solar and wind potential add jobs, even if they have large fossil fuel industrys, Texas and Cali, and anywhere without energy diversity falls into recession.
Outcast_Searcher on Mon, 22nd Feb 2016 2:06 pm
At this this cautiously optimistic scenario seems far more realistic than what we usually see forecast by the various interest groups.
Using 2030 gives meaningful time for the EV to scale up and solve many problems including high costs and somewhat unknown battery life/performance in the real world.
This middle of the road scenario at least acknowledges unlike the extreme greens that the world won’t be carpeted with electric cars by 2020 to 2025. It also doesn’t go with the FF industry and its cohorts saying electric cars will never ever be a minstream product, etc.
The assumption that green tech will overcome the BAU population and global demand growth by 2030, and outrun it from then on is the key question. Given how little people all over the world are willing to give up in terms of consumption is the main obstruction. It will be interesting to see if that changes as the effects of AGW continue to become more apparent over time.
In the mean time, given that even the 2 degree celcius pledge increase from Paris is HIGHLY doubtful, given the lack of real enforcement, and given how much AGW is already baked into the system — it’s not like this will save us or anything. So the generally corny “yay” tilt to the article is unrealistic. Considering the source though, at least it’s not wildly hyperbolic.
sidzepp on Mon, 22nd Feb 2016 2:20 pm
If people cut down from consumption, then there will be less jobs. Idle folks fall easy prey to the demagogues that seem to sprout like weeds during times of economic uncertainty. Keep the economy growing and we will continue to tax the environment. Enter negative growth and we will probably blow ourselves to near extinction. It is a no win situation.
Apneaman on Mon, 22nd Feb 2016 2:38 pm
PracticalMaina, tanks fer da link. Everytime I turn around there seems to be another piece of evidence that indicates that there is way more going on than not exercising and too many calories. They ain’t even close to understanding it all, but it’s pretty clear that life in the industrialized world has changed us at the genetic level and in a bad way. Why anyone would be surprised that exposure to hundreds of thousands of man made chemicals within the last couple hundred years out of 6 million years of evolution would do such a thing goes to show how much the apes need to cling to their stories – like “personal choice”. There are too many chemicals to study the effects on apes properly and almost no way to track the combined cocktail. It’s well established that some of the most ubiquitous ones are endocrine disruptors that contribute to obesity and get passed down genetically. The chemical that is in every sort of food packaging, BPA, in a well known endocrine disruptor and so are all the substitutes. So is nicotine and many mothers for a couple of generations used to smoke while pregnant. If you read the literature – it just goes on and on and yet barely scratches the surface. I really don’t think 50 year olds like me have any right judging the fat youths of today. I don’t think they had a chance.
Why It Was Easier to Be Skinny in the 1980s
A new study finds that people today who eat and exercise the same amount as people 20 years ago are still fatter.
http://www.theatlantic.com/health/archive/2015/09/why-it-was-easier-to-be-skinny-in-the-1980s/407974/
What could possibly go wrong?
Humans Have Made, Found or Used Over 50 Million Unique Chemicals
http://www.wired.com/2009/09/humans-have-made-found-or-used-over-50-million-unique-chemicals/
Cancer monkeys, I say. That’s what we are.
PracticalMaina on Mon, 22nd Feb 2016 3:00 pm
Insanity. That is all I can say, the urge to replicate nature and make it better is insane and reckless, because we cannot trust big buisness or the FDA or the EPA.
Wool is an example of an incredible natural fiber that is warm, waterproof and fire proof. So lets try to replicate it with plastic, problem is thats highly flammable, Owe well throw some dangerous fire retardants in with it. Problem solved.
Energy Investor on Mon, 22nd Feb 2016 4:29 pm
The only part of that article that interests me is the graph of OECD oil consumption as we all voted with our cash to close down domestic industry and get the Chinese, Indian and other cheap labour economies to supply us for a pittance.
But now we have recession and can only look forward to hard times without any of the industries that made each OECD nation self reliant.
We will get what we paid for.
Truth Has A Liberal Bias on Mon, 22nd Feb 2016 7:27 pm
Hey short did anybody actually ever buy a copy of your Etp model? Futilitist says he got one for free but won’t show it to anybody, however Futilitist dies say he proved it imperially but I doubt it as his math isn’t that good and he seems to use the words entropy, thermodynamics and EROI interchangably without any real grasp of the definitions. Anybody besides that retard shilling for your Etp model? Spill the beans short, post your publication for peer review.
Apneaman on Mon, 22nd Feb 2016 7:42 pm
Never heard of this Futilitist dude before you started strawmanning him. Or maybe you have a crush and dissing him is the equivalent of playfully punching him in the shoulder? Futilitist’s fanboy. Bet he’s getting a free can of soup post collapse.
Outcast_Searcher on Tue, 23rd Feb 2016 12:55 pm
Well, Truth Has A Liberal Bias, while you’re ragging on Futilitist about his math and especially his use of vocabulary, maybe you should learn the difference between empirically and imperially.
By context, you were clearly talking about an empirical proof.
This reminds me of the people who claim they are a genius, but misspell genius.
I don’t like Short constantly advertising here and saying the same thing again and again either. But why waste your breath asking him to post his for-fee report online for free? If he does that he can’t realistically sell it, which is clearly his goal.
shortonoil on Tue, 23rd Feb 2016 4:30 pm
“Spill the beans short, post your publication for peer review.”
The study can not be peer reviewed; it is an engineering report! I’ll attempt to explain the difference one more time, if you can’t understand this time around you must be just plain simple minded. I’ll have to assume that any attempt is futile, and equivalent to trying to explain quantum mechanics to a fruit fly:
Science attempts to find new laws of nature, or extend present knowledge about the laws already known. 99.9% of science is dedicated to extending what is already known. This new information is presented to “peers” (people with some accredited claim to similar knowledge) for evaluation. This is done through the issuance of scientific papers. If accepted by enough, and the right people the new knowledge is accepted into the established hierarchy of established knowledge.
Engineering reports are not intended to present new knowledge of science. That is not what engineers do! They are applications of present accepted, and known knowledge to solve a specific problem. “Depletion: A determination for the world’s petroleum reserve” is the application of known, and universally accepted science to a specific problem. The depletion status of the world’s petroleum supply. It is the application of a 100 year old methodology to that problem. We have introduced no new science, thus there is no peer review to be done.
Whether, or not one accepts it is strictly the decision of the individual. If one has the mathematical, and basic scientific knowledge to critique it, it can become an informational source to the individual. To not accept one would have to say, “on page 47, equation #14 is incorrect because”; anything else would be pure hyperbole. The basic premise of the Model goes without question – it has been accepted by the entire world’s scientific community for over a century.
To answer your next question, more than a thousand have been distributed over the world. Because the report is not encrypted, the distribution is probably many times that number.
BW Hill
http://www.thehillsgroup.org/