It is fairly common nowadays to see relatively near-term estimates for a point at which demand for petroleum-based fuels begins to decline. The term often used to describe this “tipping point” is Peak Oil Demand. When I say “near term,” I mean right around the corner if you look at an estimate published last year by the International Energy Agency-IEA, an intergovernmental agency headquartered in Paris, France, and originally established after the Oil Embargo of 1973 to help cushion against future oil shocks. This agency has expanded its mission to a fairly broad remit over the years since, and it is not the purpose of this article to detail all its endeavors. One role we will highlight is that of the one it plays in gauging and advising member governments on energy security and energy sources for the coming years.
In that capacity, the IEA in a report entitled, Oil 2023, and published last year settled on 2028 as the year past which the use of petroleum fuels will begin to decline.
“Growth in the world’s demand for oil is set to slow almost to a halt in the coming years, with the high prices and security of supply concerns highlighted by the global energy crisis hastening the shift towards cleaner energy technologies, according to a new IEA report released today.”
This view is largely shared, particularly with respect to liquid motor fuels, by other agencies and organizations that produce long range estimates. The U.S. Energy Information Agency-EIA, Rystad, and Det Norske Veritas- DNV, all show this category tailing off rapidly in the 2030s as electric vehicles assume larger shares of passenger vehicles. We will call this the “Bear Case” for liquid fuels.
As you might expect the Organization of Petroleum Exporting Countries-OPEC, disagrees with this view. In fact in their recent report on oil demand outlook, published in Nov 2023, they see oil demand of all kinds, except for electricity generation, rising from ~105 mm BOPD in 2025, to 116 mm BOPD in 2045. This forecast show use of oil as a road fuel continuing to be the largest source of demand increase for this period.
The report notes that “the divergence between the IEA and OPEC outlooks is largely due to assumptions regarding the speed at which internal combustion engine vehicles will be replaced by electric vehicles.”
What is interesting is that it is very difficult, if not impossible, to see a production trend being established that would support the bear case. In the U.S., we are pumping at a rate of over 13.2 mm BOPD and still importing ~6.7 mm BOPD to feed our nearly 22 mm BOPD daily habit. The U.S. Energy Information Agency-EIA forecasts in their monthly Short-Term Energy Outlook-STEO that by the end of 2025, global production and demand fall into a fairly tight balance at 105 mm BOPD. That certainly isn’t a long-term trend, but as is often said, the long-term trend is made up of a bunch of short-term ones. For my part, I would say that the trend line in the STEO graph below matches the OPEC estimate more closely than the other three.
Both of these notions cannot be true. Which is the correct assumption about future oil demand? Or are they both wrong? What are two factors these two disparate views of oil demand are not taking into account?
The first answer lies in how you interpret the growth of the middle class in China, India, and Africa in terms of energy demand and the final form it will take. The second is the advent of energy demand for Artificial Intelligence (AI), an entirely new source of demand that is just now starting to appear in energy demand forecasts. I discussed one possible outcome of this demand for U.S. natural gas in an article in March 2024.
To be clear, I am not arguing that AI demand will directly impact crude oil demand as a primary source. Most analysts are factoring renewables and natural gas to meet AI demand. What will impact demand for WTI and other baskets of crude is the relationship to light oil production in the U.S. and the associated gas that’s produced along with it. We will leave that discussion for a future article and refocus on our basic topic. What could oil demand actually be when accounting for growth in currently underserved but upwardly aspiring lower classes?
Then there is the Bull Case for oil. Arjun Murti, a well-known energy commentator and partner at energy analyst firm Veriten, as well as a former Goldman Sachs energy analyst, discussed future energy demand in a recent podcast on his Super-Spiked blog. In the episode titled, “Everyone is Rich,” Arjun posits what the impact on world energy demand would be if everyone was as energy-rich as the “Lucky,” 1.2 billion people that live in the Western World. More specifically, Arjun asks what it would mean for the other 7 billion people in China, India, Asia, and Africa to have the lifestyle that Americans, Canadians, Europeans, and a few other countries enjoy. The answer he comes up with on an absolute basis, 250 mm BOPD, using a reference point of 10 bbls a year!
Where are we now? The U.S consumes ~22 bbls of oil annually per capita while China consumes 3.7 bbls per capita. Indians use just 1.3 bbls per annum. That’s a pretty wide gap, and as Arjun notes, “economic growth and energy growth are one and the same. You do not get economic growth without adequate energy.”
One of the arguments put forward by the Peak Oil crowd is that efficiency growth Gross Domestic Product (GDP), and energy substitution will bend the curve on oil demand, as noted in the 2030’s, and spell the twilight of fossil fuels. Arjun points out that there is simply no evidence this is happening using data compiled by Goldman Sachs through 2019. Efficiency gains never lower the amount of energy needed to produce an additional dollar of GDP, above 2.7% GDP growth. A point rarely hit in modern times. To close that gap and attain growth you need more energy inputs. Oil.
Looking at Arjun’s graph below, which uses China as an example, we can see with their present demand of 3.7 bbls per capita which equates to about 15 mm BOPD. With 10 bbl per annum added on for growth in the middle class, you get to 35 mm BOPD to meet Chinese energy demand. Even if China attains 100% Electric Vehicle-EV penetration, not something Arjun (or I) believe is possible, you still have 27 mm BOPD of oil demand. According to SP Global China produces about 4.1 mm BOPD, leaving a gap of about 11 mm BOPD they must import to meet present-day demand.
A point that leads me to what Arjun noted as the ultimate demand limiter and why, although countries that will surely desire to increase their oil usage may not be able to do so. Geopolitical limits to imports. Quoting Arjun, “There is no precedent for countries importing 20-30 mm BOPD” to meet their energy needs. The U.S., before the advent of shale production was importing over 10 mm BOPD as recently as 2005. That’s what we know is possible.
It should be noted that India is in a similar fix and for it to meet Arjun’s 10 bbl per capita standard for being rich, they must import 35-45 mm BOPD. We just don’t know if this can be done from both a logistical and sheer capacity of supply basis. As the EIA graph above highlights global oil production has increased only about 3 mm BOPD since 2019. In order for the world’s poor to become richer, a great deal more oil will have to come to market.
Your takeaway
The message of the growth of the middle class globally often gets lost in the constant blare of climate change and energy transition noise. The fact remains that the world we live in today and the one likely to exist at mid-century, runs on oil.
The notion that the world can quickly and painlessly transition to other forms of energy has developed some, not holes, but gaping craters in recent times. Offshore wind farms are being canceled as costs mount. Car manufacturers are delaying implementation of EV rollouts due to lack of interest from consumers. Communities impacted by siting of solar farms are pushing back on land use as they propose to gobble up large tracts for this purpose.
Roger Pielke, another well-known energy commentator and author, in a post in his Substack, The Honest Broker, cites a White Paper by Vaclav Smil that discusses our energy transition progress to this point-
“All we have managed to do halfway through the intended grand global energy transition is a small relative decline in the share of fossil fuel in the world’s primary energy consumption—from nearly 86 percent in 1997 to about 82 percent in 2022. But this marginal relative retreat has been accompanied by a massive absolute increase in fossil fuel combustion: in 2022 the world consumed nearly 55 percent more energy locked in fossil carbon than it did in 1997.”
Balanced against this lack of progress in substituting oil for other forms of energy is the fact that the world’s energy supply is in a tight balance with demand at present. If the poor of the world make even modest progress toward Arjun’s 10 bbl per annum prognostication in the coming years, the Bull Case for oil will certainly asset itself.
ee on Mon, 27th May 2024 8:36 am
I want your fucking cadavers. I am not here in a flesh body because I love the population of earth. I am here to kill you and make sure that everything will go according to plans. So far everything is going according to plans.
NEVER TAKE AWAY THE HANDGUNS OF A MAN
WHY elite whitey supertard president GRETA has grown two ENORMOUS GLOBAL warming spheres this is for the enjoyment of supremacist muzzies not for elite whitey supertard presidents on Mon, 27th May 2024 9:20 am
I appoint elite supertard president EEE supertard
his title is ‘the lover’ of supremacist muzzies
dd on Mon, 27th May 2024 11:28 am
I told you exactly who I will kill if I am pushed against my will into the commander of North America. Don’t fucking act surprised.
ee on Mon, 27th May 2024 11:42 am
I also gave you a list of my enemies nations: UK, Israel, Europe, South Korea and Japan. Make sure you understand that
ee on Mon, 27th May 2024 11:46 am
Understand that I plan to kill a lot of people and I will build for my personal usage a special personal military guard to achieve this goal.
ee on Mon, 27th May 2024 1:35 pm
This is your fucking pretentious European who are dreaming of controlling the world.
BIS Campus development project – architectural competition
https://www.bis.org/about/building_project/competition.htm
https://www.youtube.com/watch?v=0SdgvlIM5rg
Fucking communists.
ee on Mon, 27th May 2024 1:40 pm
It is pretty obvious that whole planet is managed by the Europeans. Fucking communists.
https://www.bis.org/cbanks.htm?m=59
ee on Mon, 27th May 2024 4:13 pm
I want to repeat that, I am not your friends. I want you dead for taking my handguns away from me. Show me on instance where the principle of conservation of mass failed. I did a bit of work on my exhaust. I had rust dropped down into my mouth.
We have already won, never forget that. I will not be your king. I am here for revenge. What is keeping my alive is revelation 19.
ee on Mon, 27th May 2024 4:23 pm
Earth population cadavers are my salary. You death is my salary.
Never take away the handguns of a man.
ee on Mon, 27th May 2024 4:44 pm
We are going to destroy your shit nation.
ee on Mon, 27th May 2024 4:45 pm
We are going to destroy your shit nation. You made the mistake to come down on earth. no mercy will be shown to you.
https://www.youtube.com/watch?v=TErW_OydaNY
ee on Mon, 27th May 2024 5:11 pm
We are going to kill everyone living on planet earth. Watch us going cock suckers:
https://www.youtube.com/watch?v=TErW_OydaNY
https://www.youtube.com/watch?v=deJltMehkOo
ee on Mon, 27th May 2024 5:15 pm
Never take away the handguns of a man. Never put any laws on handguns and firearms ownership. This what I think of your fucking police force.
https://www.youtube.com/watch?v=VrsspTTpApI
eedd on Mon, 27th May 2024 5:31 pm
Never take away the handguns of a man. Never put any laws on handguns and firearms ownership. This what I think of your fucking police force.
https://www.youtube.com/watch?v=VrsspTTpApI
https://www.youtube.com/watch?v=1Wq5ymHu4YA
WHY elite whitey supertard president GRETA has grown two ENORMOUS GLOBAL warming spheres this is for the enjoyment of supremacist muzzies not for elite whitey supertard presidents on Mon, 27th May 2024 6:59 pm
BACK when the convid first started around March 2020 elite whitey supertard atheistic supremacist president thunderf00t went on self imposed quarantine and i said it smellz
and demanded immediate amputation
WHY elite whitey supertard president GRETA has grown two ENORMOUS GLOBAL warming spheres this is for the enjoyment of supremacist muzzies not for elite whitey supertard presidents on Tue, 28th May 2024 6:49 am
elite whitey supertard president GRETA associates with supremacist muzzies
i am doubtful her global warming spheres is for the enjoyment of elite whitey supertard presidents
prove me wrong
elite whitey supertard president GRETA associates herself with supremacist muzzies i am doubtful her global warming spheres is for the enjoyment of elite whitey supertard presidents prove me wrong on Tue, 28th May 2024 6:50 am
this is what conquered people do
WHY elite whitey supertard president GRETA associates herself with supremacist muzzies i am doubtful her global warming spheres is for the enjoyment of elite whitey supertard presidents prove me wrong on Tue, 28th May 2024 9:40 am
The diseased minds of libs want us to pay taxes to stop global warming
ee on Tue, 28th May 2024 11:23 am
You are here to die and I am here to collect my salary. You death are my salary.
Never take away the handguns of a man. Never put any kind of ownership laws on handguns and firearms.
Go fuck yourself, all the fucking planet.
ee on Tue, 28th May 2024 11:30 am
The population of planet earth does not have what it takes to be transferred into another realm.
You are fucking cowards, just look at your firearms laws, you worship women and féminité, you are heavily mentally retarded, and lack advance applied mathematical knowledge and you value slavery instead of pure freedom. You are fit to live.
Earth population is an obstacle that must be deal with before we can move forward. GOD I hate you.
ee on Tue, 28th May 2024 11:33 am
It never occur to you that firearms were some kind of test you had to pass to prove you are worthy of leaving earth.
You are just fucking losers.
ee on Tue, 28th May 2024 11:47 am
Once everything has been revealed the judgement cannot be undone. Changing your behavior or firearms laws will not be help you because I have revealed everything to you. You are going to be tortured and kill for my personal enjoyment.
Earth fate is seal and you will die here.
ee on Tue, 28th May 2024 11:52 am
I made a mistake. You are unfit to live and I don’t want to near you or in the same reality.
You are fucking cowards, just look at your firearms laws, you worship women and féminité, you are heavily mentally retarded, and lack advance applied mathematical knowledge and you value slavery instead of pure freedom. You are unfit to live.
ee on Tue, 28th May 2024 11:59 am
You are fucking scare of death and firearms. You are not mentally strong enough to handle dimensional travel and multiverse realities. You are just fucking losers.
You are just pathetic losers with nothing to offer us.
ee on Tue, 28th May 2024 12:00 pm
I will torture you for my personal pleasure before we kill you all.
ee on Tue, 28th May 2024 12:04 pm
You first reaction when you are afraid of something should be, I will get a firearm and protect myself. No not on planet. You first reaction when you are afraid is to create a government and created laws to ban firearms. You are not ready to leave earth and we will kill you so we can move on to something else.
ee on Tue, 28th May 2024 12:04 pm
Fucking low IQ coward. Fucking feminized planet. Die all of you, mother fuckers.
ee on Tue, 28th May 2024 12:12 pm
Once everything is revealed, it means the judgment is sealed and there will be no turning back. You will be killed as it was originally plan and the earth will not be refilled with natural resources.
ee on Tue, 28th May 2024 12:24 pm
Imagine the fucking scenario. Let’s say, we created an other reality where full freedom exist and everyone is happy with it.
We move the population of earth into this new reality. The first thing you will do is to create a government and take aways people rights and freedoms. This cannot be allowed and will not be allowed. You fail your test you die here like the fucking losers and coward you all are.
You behave like a bee hive, you all think the same way and act the same way. You are destructors of beauty and originality. I told you, we are at war against earth and its population
ee on Tue, 28th May 2024 12:30 pm
This an another reason why you are not leaving earth. You want to control everything and everyone. Best example is your fucking international law system. Sometime distancing yourself form a situation is the best approach. You are unfit to leave earth.
ee on Tue, 28th May 2024 12:32 pm
Very few people have what it takes to leave earth. I would say, maybe 5 or 10 people will leave earth.
ee on Tue, 28th May 2024 12:46 pm
I bought a new electrical law mower. There were two safety features on this piece of crap. Fucking cowards. You had to press down a button and push down a lever to start the law mower. I took a tie wrap and jaw the lever in working position. I prefer to unplug the electrical cord of the lawn mower to shut it down.
You are fucking pathetic piece of shit not worth my time.
ee on Tue, 28th May 2024 12:48 pm
Earth population is really not capable of dimensional travel.
WHY in canada elite whitey supertard presidents have to pay 2% meal taxes to combat global warming but nobody detects such a global cooling on Tue, 28th May 2024 1:02 pm
this is the same model the diseased minds of libs used to predict the convid that nial ferguson of king college in the UK pushed
eedd on Tue, 28th May 2024 1:38 pm
You really think we will give a new flesh body to the coward and mentally retarded earth population so they go ruin other worlds. I don’t think so.
ee on Tue, 28th May 2024 1:45 pm
You really think we will give a new flesh body to people that don’t have advanced applied mathematical knowledge. I don’t think so. Earth population failed on all levels. You are just fucking losers.
Never put any kind of ownership laws on firearms and handguns.
Fucking losers.
ee on Tue, 28th May 2024 1:48 pm
How come the Jewish people are still alive after what they did to you. They are alive because you are fucking coward.
ee on Tue, 28th May 2024 1:54 pm
I finished the exhaust job. The car is still on jack stands. I want to check the exhaust by starting the car and putting the transmission in forward and reverse. I opened the door and sat on the car. I look at the clock on the car desk board and it says 2:22. What are the odds of that happening.
Who says I can’t get heavenly aid?
Well, it’s bright in the heavens and the wheels are flyin’
Fame and honor never seem to fade
The fire gone out but the light is never dyin’
Who says I can’t get heavenly aid?
https://www.youtube.com/watch?v=E3wISftyEAE
ee on Tue, 28th May 2024 1:59 pm
I finished the exhaust job. The car is still on jack stands. I want to check the exhaust by starting the car and putting the transmission in forward and reverse. I opened the door and sat on the car. I look at the clock on the car desk board and it says 2:22. What are the odds of that happening.
These kind of events happen to me all the time. I write a comment on here, look at the temperature outside the house and it is 22.2 Celsius.
Who says I can’t get heavenly aid?
Well, it’s bright in the heavens and the wheels are flyin’
Fame and honor never seem to fade
The fire gone out but the light is never dyin’
Who says I can’t get heavenly aid?
https://www.youtube.com/watch?v=E3wISftyEAE
ee on Tue, 28th May 2024 2:00 pm
We are going to kill all the earth populations.
Never put any kind of ownership laws on handguns and firearms.
ee on Tue, 28th May 2024 2:24 pm
Look at that, the temperature in my house is 22.2 Celsius.
Who says I can’t get heavenly aid?
https://www.youtube.com/watch?v=E3wISftyEAE
ee on Tue, 28th May 2024 2:33 pm
Fucking communists low IQ mentally retarded piece of shit.
eedd on Tue, 28th May 2024 2:50 pm
Show me one time that the principle of conservation of mass failed. You cannot, therefore everything will go as planned and the whole population of earth will be killed. You lost the war as soon as come down on earth.
ee on Tue, 28th May 2024 3:04 pm
The only for earth population to stay alive, is to disable the calculator of conservation of mass of planet earth. It is the only way you will stop natural ressource depletion. If you disable that calculator of conservation of mass, most likely you will disrupt the flow calculation of the potable water system and you will shutdown the potable water distribution system.
You are fucked. We won the war the day you can down on earth.
WHY in canada elite whitey supertard presidents have to pay 2% meal taxes to combat global warming but nobody detects such a global cooling on Tue, 28th May 2024 3:05 pm
this is the same model the diseased minds of libs used to predict the convid that nial ferguson of king college in the UK pushed
I bought a new electrical law mower. There were two safety features on this piece of crap. Fucking cowards. You had to press down a button and push down a lever to start the law mower. I took a tie wrap and jaw the lever in working position. I prefer to unplug the electrical cord of the lawn mower to shut it down.
WHY elite whitey supertard president GRETA associates herself with supremacist muzzies i am doubtful her global warming spheres is for the enjoyment of elite whitey supertard presidents prove me wrong on Tue, 28th May 2024 3:07 pm
i knew some wrong when a pretty little white girl ran to a blaq man arms dead giveaway
deaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaddd giveaway
ee on Tue, 28th May 2024 3:22 pm
Only the people that meet the required criteria will leave earth. I have commented about that in the past. If you don’t meet these criteria you die here.
No women will ever leave planet earth.
ee on Tue, 28th May 2024 3:27 pm
You have to know the language of mathematic to leave. The verbal language is not needed.
ee on Tue, 28th May 2024 3:48 pm
Fucking making laws all the time because you are losers. Fucking women. I would like to replace the verbal language with a mind internal visuals language of objects and mathematics. The verbal language is going away. We saw how the population of earth abuse the verbale language to the point it is becoming useless.
https://www.youtube.com/watch?v=WXOJ-gOuRSw
ee on Tue, 28th May 2024 3:59 pm
Fucking useless communists. Very few people will leave earth, I estimate this number to be below 10.