Many are familiar with peak oil theory — the idea that global oil production will hit a ceiling and then decline — yet the concept of peak oil demand, where demand will plateau before supply, appears to be replacing this controversial hypothesis. Amy Myers Jaffe, Executive Director of Energy and Sustainability at UC Davis, recently wrote in the Wall Street Journal that a combination of technical, economic, environmental and demographic shifts could lead to peak global oil demand in the next two decades. By contrast, the Energy Information Administration (EIA) projects that global oil demand will rise from 87 million barrels per day (mbpd) to 119 mbpd by 2040. A growing number of experts, and even oil companies, are beginning to reconsider what Jaffe calls the conventional wisdom surrounding growth in demand.
According to the EIA, demand for oil has already peaked in major, industrialized nations. The critical issue is whether this will be offset by a growing appetite for oil in the developing world. EIA projections are fueled by emerging economies in China, India and the Middle East. Yet the most recent outlooks from both BP and Exxon Mobil suggest that demand for oil in these regions will slow considerably by 2035, casting doubt on whether emerging economies will compensate for lagging demand in the industrialized world.
rockman on Wed, 3rd Jun 2015 3:47 pm
Demand is what potential buyers can afford to buy…not what they would like to buy. Thus demand will typically match the supply: market pricing will guarantee it. If supply becomes very small prices will rise. Only those that can afford to pay those higher prices will buy the oil. Thus demand is fully met. As it is today. As it has always been. And as it will likely always be.
Perk Earl on Wed, 3rd Jun 2015 3:59 pm
This is a pasted partial post from professorlocknload over at automatic earth that is quite good. I think it answers something about where we will be in 2035:
“Might it be, the “bubbles” apparent in these instruments are looking at one of the most tightly compressed money supply springs in the history of a Keynesian dominated economic universe, all while moar and moar compression in being exerted? And, of course, the longer this additional pilling on of accelerant goes on, the bigger the bang when a little heat is applied?
Put another way, having come this far into artificial stimulus, and listening to the wailing that resulted in even the suggestion we live within our means (austerity), who, or what, is willing to step forward and take away the punch bowl?
I liken it all to a conversation that took place between members of an informal motorcycle club I ride with. A fairly new rider asked a more experienced one (?) how he knew what speed to be going into a curve that would assure him making it through it. Reply; “You can’t really know that for sure ’till you are in it, at which point, what are you going to do, lean over even farther and hang on, straighten up and run off the road, or bail off the bike in mid turn?
Looking at history, my bet is the Fed’s of the world lay ‘er over until she is finally on the rim, loses traction and slides over the edge. What other choices do they have?
Deflation, in the eyes of these psychopaths, is suicide. They will take their chances with the storming of the Bastille as their signal to head for the fueled up Gulf Stream sitting there on the Tarmac. That, or start WW III and be in the doomsday bunker in Pueblo, or where ever, in time for the grand finale.”
Plantagenet on Wed, 3rd Jun 2015 4:44 pm
I doubt that either BP or “Proflocknload” have a clue what oil demand will be 2035.
I do like Perk Earl’s analogy that the FED is like a motorcycle gang going around a corner too fast.
Davy on Wed, 3rd Jun 2015 4:58 pm
Planter, you should change your avatar to a motorcycle man going into a turn. It would make you look more like a cool dude. The skeleton is morbid and more for Halloween.
GregT on Wed, 3rd Jun 2015 5:00 pm
You may like the little ‘motorcycle gang’ story planter, but you aren’t displaying any indications that you have the foggiest notion of what it is about.
GregT on Wed, 3rd Jun 2015 5:22 pm
Davy,
planter’s new avatar isn’t that bad, quite fitting actually. Much better than the stupid flashing propeller thingy.
Plantagenet on Wed, 3rd Jun 2015 5:36 pm
Daver
Skeletons are not only part of Halloween—in fact, life itself would be impossible without skeletons, except for mewling spineless inveterbrates like GregT.
Cheers!
GregT on Wed, 3rd Jun 2015 5:42 pm
Hey planter?
I actually complemented you on your skeleton avatar, it was Davy that said it was morbid.
Speculawyer on Wed, 3rd Jun 2015 8:53 pm
If you think there is a difference between peak oil and peak oil demand then you don’t understand the concept of peak oil.
Makati1 on Wed, 3rd Jun 2015 10:26 pm
Peak oil happened long ago.
Peak demand is here.
Peak’s “spring” has about reached it maximum compression, at least in the West. The dollar is boxed into a corner that has no BAU exit. TPTB have no choice but to let it explode, one way or another.
2035 might as well be 3035 as only a fool would make predictions that far out. Look back 20 years and see if YOU would have foreseen today’s world?
The Cold War was ‘over’.
China was crawling out of the 3rd world.
The Euro was only three years old.
The US national debt was only ~40% of GDP (vs 105+% now.)
9/11 hadn’t even happened.
And on and on…
Beery on Thu, 4th Jun 2015 2:28 am
The concept of “Peak Oil Demand” is just a way for denialists to claim that peak oil is all about a fantasy “desire” for oil rather than our real “need” for it. It makes Peak Oil sound like a good thing. It’s cornucopian propaganda.
Dredd on Thu, 4th Jun 2015 7:16 am
Poison is so crude
crude is so poison
Poison lovers unight.
Eric the Red
shortonoil on Thu, 4th Jun 2015 7:36 am
Crude inventories are now at the highest level they have ever been. That has been the primary reason why traders have bid prices down from almost $100/ barrel to the present $60 level. For prices to again rise to their historic highs inventories would have to be reduced considerably. That is NOT going to happen.
Over a year ago we stated that prices were going to fall that year. In September we put up this page: (the date is on the second graph of the page)
http://www.thehillsgroup.org/depletion2_022.htm
The graphs above were calculated from the output of the Etp Model, which is an energy balance function. The Model indicates that a point would be reached where the energy to produce petroleum, and its products would exceed the energy supplied from it to the economy. That is, the economy would never again receive enough energy from petroleum to acquire all that was produced after that point was reached. That point was reached in 2012.
With ever growing inventories prices will continue to be suppressed forcing the production of the highest cost producers to be continually shut in. The spread between the energy that is needed to process the production, and what is delivered to the economy is growing at about 2.5% per year. With a 91mb/d production level, production will have to be cut by about 2.25 mb/d per year. This will occur when producers’ debt levels becomes unmanageable.
Goldman Sachs has estimated that the world petroleum industry is now carrying $2.5 trillion in debt, and that is growing rapidly. Against gross revenues of $2.0 trillion per year the industry will soon find acquiring additional funding difficult, and then impossible. Production will then fall precipitately. Once, it becomes generally understood that world petroleum production is in terminal decline, financial markets will react violently!
http://www.thehillsgroup.org/
BobInget on Thu, 4th Jun 2015 3:06 pm
Once again Shortonoil dances around the “gotta have it or die” question.There are no questions about crude oils fashionability.
First of all Mr Shorting oil, believe almost nothing Goldman Sacs says about oil in general. GS has entire disinformation staffs devoted full time to obscuration.
In this world only Iran, Iraq, Venezuela and Saudi Arabia really matter as suppliers.
Saudi Arabia overreached by overtly aiding IS and AQ thereby placing itself in direct danger of domestic and foreign attack.
Iraq is fighting for survival.
Iran has more issues then Reader’s Digest.
Venezuela, with world’s second largest reserves sold-off ALL future production to China and Russia.
North America, Asia, Europe remain net importers. Even if shale and oil sands production doubles over the next decade to 20 M BB p/d it won’t satisfy projected US and Canadian needs.
Mexico will soon become a crude oil and gas net importer.
shortonoil on Thu, 4th Jun 2015 3:58 pm
“First of all Mr Shorting oil, believe almost nothing Goldman Sacs says about oil in general. GS has entire disinformation staffs devoted full time to obscuration.”
I believe them a lot more than I believe you.
“Mexico will soon become a crude oil and gas net importer.”
More of your Ouija, and dart board projections? Impressive! Why don’t you give up on using the “Force” and start opening your eyes. The end of the oil age is not very far away. The wonder producers you quoted above are no longer generating enough revenue to keep the lights on. They’ll soon starting coming apart like a Chinese finger trap. Shale has become the nations newest industrial welfare client. They are now receiving food stamps denominated in $billions.
BobInget on Thu, 4th Jun 2015 6:53 pm
Thank you for responding with such resounding factual data, Mr Shorting Oil.
I particularly like the finger puzzle trap.
I’m prepared to defend each and every statement I’ve made on these pages over the past 18 months. Just ask.
Posting links for Iranian, Iraqi, Russian, Saudi productions seems redundant. No permission needed.
“Mexico net oil importer” http://www.wsj.com/articles/SB10001424052702304908304579562400748296622
(in five years, Mexico, net importer)
http://news.rice.edu/2011/04/29/baker-institute-researchers-conclude-mexico-could-become-oil-importer-by-2020-without-new-investment/
China soon will have more autos on the street then US http://www.newgeography.com/content/002991-china-personal-vehicles-now-more-us
I forgot India;
http://www.trade.gov/static/India%20White%20Paper.pdf
BTW it’s demand causing oil prices higher.
Pure, unadulterated speculation driving prices lower.
Now, as for Goldman: I feel like Jon Stewart….
http://www.com/news/articles/2015-01-12/goldman-sees-need-for-40-oil-as-forecast-for-opec-cut-abandoned
http://www.marketwatch.com/story/oil-prices-to-stay-lower-for-longer-says-goldman-sachs-2015-04-07
http://www.cnbc.com/id/102555893
http://oilprice.com/Energy/Oil-Prices/Goldman-Sachs-Predicting-45-Oil-By-October.html
The prediction of greatly diminished Venezuelan exports as soon as Citgo is sold is, as far as I know is original. I made this observation last year, confirmed many times this year.
I was not aware, until today, that Mexico is already a net negative oil exporter to USA.
Thanks again, shortonoil.
Davy on Thu, 4th Jun 2015 8:05 pm
Bob, we all have specialties. Yours is geopolitical ME news. Don’t go up against Short who is out of your league on oil issues. It just makes you look diminished.
james-boags on Fri, 5th Jun 2015 2:26 am
Totally agree Davy Short knows his sh#t