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.
I OFFICIALLY appoint supertard EEE supertard his title is 'the lover' of supreamcist muzzies on Tue, 28th May 2024 4:10 pm
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
ee on Tue, 28th May 2024 5:29 pm
Show me one instance where the principle of conservation of mass was raped. You cannot. Because we already won the war. The day you came down on earth is the day we won the war.
Your cadavers will be used for our own entertainment as per revelation 19.
ee on Tue, 28th May 2024 6:49 pm
https://www.youtube.com/watch?v=TNwXEs-MMK0
ee on Tue, 28th May 2024 7:16 pm
Show me one instance where the principle of conservation of mass failed. If you cannot it means you will die. GOD, I hate being surrounded by all of you.
ee on Tue, 28th May 2024 7:18 pm
A man of my IQ should not be surrounded by idiots and communists.
dd on Tue, 28th May 2024 7:23 pm
As always, Europe always there to fuck up the world with wars. It is always Europe ruining planet earth. Imagine a world where all the Europeans of Europe are dead.
Compulsory military service back on the table in Europe as war rages in Ukraine • FRANCE 24
https://www.youtube.com/watch?v=pXtIYfaAJ9w
ee on Tue, 28th May 2024 7:26 pm
They said, US is a big warmonger. That might be truth, but they are not the one pushing to start a world wide war. Always fucking Europe.
ee on Tue, 28th May 2024 8:00 pm
Nous sommes sur le bord d’enculer toute la population de la planète terre ben solide.
Regardez nous ben aller mes tabernacles.
I OFFICIALLY appoint elite supertard PRESIDENT EEE supertard his title is 'the lover' of supreamcist muzzies on Tue, 28th May 2024 8:44 pm
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
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 8:45 pm
supertards please change ur undies after 10 months
please feel at ease among friends we’re all lovers of supremacist muzzies here
ee on Tue, 28th May 2024 8:53 pm
Normally the US should work with Russia at the total extermination of all the Europeans living in Europe. Europe is the head of the snake that wants to control the world.
ON the precipitate at the eve of the grate reset the question before us all is what caused the melting of two miles of ice over northern USA and much of Canada on Tue, 28th May 2024 8:55 pm
expert concensus says it is not elite whitey supertard presidents that caused the ice to melt.
it was supremacist muzzies. Archeological evidence revelaed the world was full of supremacist muzzies.
Worldwide there were 81 billion people inhabitating earth at the time – all supremacist muzzies
it was supremacist muzzies that caused the melting of ice.
Highest elevation
Baffin ice sheet (Foxe Dome): 2,200 to 2,400 metres (7,200 to 7,900 ft) above sea level
Keewatin ice sheet (Keewatin Dome): 3,200 metres (10,500 ft) above sea level
ee on Tue, 28th May 2024 8:57 pm
Everyone on earth has long necks. Must likely earth is just a simulation made to entertain me while I am getting a new vehicle for my soul. Earth is built for my personal entertainment. I say, we kill all the Europeans living in Europe.
WHOA its a full rainbowl all the way double rainbow oh my god all the way wow so intense double rainbow all the way across the sky so intense whoa what does this man oh goooood so intense double rainbow all the way across the sky what does mean on Tue, 28th May 2024 9:01 pm
JUNE is Thank UPPERtard Month for supporting free speech
only elite master race chink supertards can save us from supremacist muzzies
ee on Tue, 28th May 2024 9:01 pm
Yes the law of conservation of mass is still valide for the whole planet earth. I could receive divine protection where the law of conservation of mass would not applied where I live. I could sit where I live for years and year while I use planet earth as my personal form of entertainment.
ee on Tue, 28th May 2024 9:05 pm
I told you, I have an imaginative and creative mind unlike the population of earth that is mentally retarded.
ee on Tue, 28th May 2024 9:23 pm
Some of that shit is funny as fuck.
https://www.youtube.com/watch?v=QUvSDip-_Es
ee on Tue, 28th May 2024 9:56 pm
Earth is really a primitive civilization. You are still using electrical wires to transport electricity. I told you that we hate you.
ee on Tue, 28th May 2024 10:40 pm
You should have kill Blinken and all the Jews of the world when I asked you. Then you might have had a chance to leave earth. If you are not willing to obey me while on earth, you will obey me outside of earth. Same goes for the firearms laws.
ee on Tue, 28th May 2024 10:43 pm
You are here because you are not willing to respect my authority. This is why we built earth to kill you.
eedd on Tue, 28th May 2024 10:52 pm
Made a mistake.
You should have killed Blinken and all the Jews of the world when I asked you. Then you might have had a chance to leave earth. If you are not willing to obey me while on earth, you will NOT obey me outside of earth. Same goes for the firearms laws.
ee on Tue, 28th May 2024 11:19 pm
This is us making fun of earth primitives technologies (1:09). Earth is not a real civilisation. You have never seen a real civilisation.
https://www.youtube.com/watch?v=sWi8zMGtRIE
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 Wed, 29th May 2024 12:20 am
JUNE is Thank UPPERtard Month for supporting free speech
ee on Wed, 29th May 2024 1:13 am
Earth is not a real civilization. In a real civilization people don’t need to work to stay alive. You are in a prison and a torture chamber, this is why you have to work hard to survive.
ee on Wed, 29th May 2024 1:16 am
You are losers this why you have to work hard to survive. We hate you this is why you are on earth.
ee on Wed, 29th May 2024 1:19 am
The people that are the most dishonest are working in politic, government, financial industries and exploit people doing hard manual labor.
ee on Wed, 29th May 2024 1:23 am
I know exactly your personality types and why we have sent you here for execution.
ee on Wed, 29th May 2024 1:27 am
Look at his face at 1:40. The book of life in revelation 20 tell us everything about you.
https://www.youtube.com/watch?v=aLOfkgdOSh4
ee on Wed, 29th May 2024 7:19 am
Stop complaining about the immigration and kill them. I told you, earth is populated with losers. Nobody is coming to save you, save yourself. You are just fucking losers.
Matthieu Valet (RN) : “L’immigration illégale est l’un des maux de la délinquance en France”
https://www.youtube.com/watch?v=xylCnpRDAYA
ee on Wed, 29th May 2024 7:22 am
Can you anything else then talking on planet earth. Are you good at something at planet earth. All you is talking and no actions.
Fucking cowards. I want the whole population of this planet dead.
ee on Wed, 29th May 2024 7:26 am
it is obvious that the population of earth is heavily mentally retarded and should be killed
ee on Wed, 29th May 2024 7:32 am
Some people in the media and in politic talk with a lot of big threatening words, but I bet in real life you are fucking cowards.
ee on Wed, 29th May 2024 8:09 am
This is why you created a police force. It is because you are fucking coward that cannot defend themself with firearms. So you create the police force to do it for.
JUNE is Thank UPPERtard Month for supporting free speech on Wed, 29th May 2024 8:23 am
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
ee on Wed, 29th May 2024 8:27 am
RECORD COLD STRIKES JAPAN; FRIGID STREAK AT THE SOUTH POLE; LOW OLIVE HARVEST IN GREECE DUE TO ‘WEATHER SHIFTS’; + DROUGHTS ARE DECREASING
We are going to kill you. You are too mentally retarded to be kept alive.
ee on Wed, 29th May 2024 8:29 am
I knew something was off. It was 12.3 Celsius at 8:00 this morning. I went outside and it feel cold.
RECORD COLD STRIKES JAPAN; FRIGID STREAK AT THE SOUTH POLE; LOW OLIVE HARVEST IN GREECE DUE TO ‘WEATHER SHIFTS’; + DROUGHTS ARE DECREASING
WHY elite whitey (((supertard))) president ALICE did not MUZZ-19 herself ith reckless abandomnet she took SALINE injection and RETRACTABLE needles instead she then want to CENSOR THIS FORUM i apologize to elite supertard ALICE on Wed, 29th May 2024 8:47 am
JUNE is Thank UPPertard Month for supporting free speech
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
I APOLOGIZE to elite whitey supertard presidents Davy and ROCK I hope they come back but I think they MUZZ-19 themselves iwth reckless abandonment WENT TO SAINT PETERS on Wed, 29th May 2024 8:59 am
JUNE is Thank UPPertard Month for supporting free speech
supertards please change ur undies after 10 months
please feel at ease among friends we’re all lovers of supremacist muzzies here
IM not a supertard im just a tard and fmr-paultard supertards are gifted children who went to academy schools and finish college PhD in just a few years in accelerated programs America is run by supertards not people like me on Wed, 29th May 2024 9:22 am
i’m just a tard and fmr-paultard JUNE is Thank UPPertard Month for supporting free speech
supertards please change ur undies after 10 months
please feel at ease among friends we’re all lovers of supremacist muzzies here
ee on Wed, 29th May 2024 9:37 am
Have you noticed the communist design of the European flag. Only two colors. Notice the circle in middle made of stars. The circle represent a table where people sit together and talks until a common consensus is reached. At least Canada has a flag that represent up to a certain point the maple tree. The Canada flag is not a communist flag unlike the European fag flag.
ee on Wed, 29th May 2024 9:42 am
At least the Canada flag represents the maple tree that could be associated to Nordic Nations. There is an associate between the flag and land.
Not the European flag. It is neutral flag with no connection to the land or the people. It is the perfect symbol to represent an one world government where everyone is equal.
As I said, the real communists are the European, not the Russians or Chinese.
ee on Wed, 29th May 2024 11:07 am
The Québec flag has as symbols associated with a King crown . The fleurs de Lys symbol is found on many King crown.
The Québec and Canada flags are not neutral flag unlike the Europeans flag.
ee on Wed, 29th May 2024 11:09 am
United nations flag is obviously a communists flag or one world government type of flag. A lot of people have commented on this, this is not new.
ee on Wed, 29th May 2024 11:18 am
The first thing you think when you look at Israel flag is the devil.
ee on Wed, 29th May 2024 11:29 am
The Québec flag has a crown symbol in it and four square as in the the four corner of the world expression, whatever that means.
Don’t interpret this as a symbol that Québec should welcome all the immigrants of the world. I would see that as something like Québec is located at the four corners of the world or something like this.
Or the King of Québec has traveled the four corners of th world.
ee on Wed, 29th May 2024 11:30 am
This is the correct meaning of the four corners of the world
https://dictionary.cambridge.org/us/dictionary/english/all-the-four-corners-of-the-world-earth
ee on Wed, 29th May 2024 11:43 am
The US flag is a boring flag. It does not generate any kind of emotion, unlike the Israel flag where you could almost see the face of the devil on the flag.
ee on Wed, 29th May 2024 11:57 am
Québec flag could interpreted in many ways. For example: someone with a King status will leave Québec for a far away land and will never be seen again on earth.
https://dictionary.cambridge.org/us/dictionary/english/all-the-four-corners-of-the-world-earth
ee on Wed, 29th May 2024 12:03 pm
Québec flag could be interpreted in many ways. For example: someone from a far away land will come to speak with someone that has a King status in Québec. You should not interpret too much just by looking at a flag. But the Israel flag really stand out as the flag of the devil.
https://dictionary.cambridge.org/us/dictionary/english/all-the-four-corners-of-the-world-earth
ee on Wed, 29th May 2024 6:53 pm
So obvious some people are working at destroying the US from the inside. What is the purpose of this video. To the destroy the US navy and military industrial complexe. Some people might come to pay a lethal visit toe high level corporate administrators working within the military industrial complex. I hope some of you have an escape plan.
https://www.youtube.com/watch?v=Vvdx6dEVgb0