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 Wed, 29th May 2024 7:02 pm
Look this is Miami the place where it is full of high rise condos and invaders. Maybe you should go home while you still can.
https://www.youtube.com/watch?v=PmXPvSpz3nk
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 7:09 pm
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
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 THEY are for SUPREMACIST MUZZIES prove me wrong on Wed, 29th May 2024 9:04 pm
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 Thu, 30th May 2024 2:20 pm
If you look at the sun long enough, 3 to 4 sec, the sun will turn black, as if there were nothing behind the sun.
ee on Thu, 30th May 2024 2:32 pm
Maybe the real sun as shutdown, and someone put a fake sun up in the sky so the planet does not go into a new ice age. Sun seems to be a pure radiation heat source.
ee on Thu, 30th May 2024 2:36 pm
Al the seeds in small envelopes were coming from Manitoba. I was not expecting that. I thought Manitoba with is small population was not producing anything much of value.
https://www.seedmb.ca/
ee on Thu, 30th May 2024 4:16 pm
I always get a strong headache after I looked at the sun directly.
ee on Thu, 30th May 2024 4:21 pm
Here we go again, my head is being bombarded by some kind of energy rays or fields.
ee on Thu, 30th May 2024 4:24 pm
https://www.youtube.com/shorts/v-KlmuF9bZk
Is this real or fake CGI
ee on Thu, 30th May 2024 4:31 pm
https://www.youtube.com/shorts/Uls0KYLB6NI
Real or CGI ????????????????
ee on Thu, 30th May 2024 4:46 pm
In theory if it is a backward entropic degradation clock, entropy applied to everything including the human forms. What we see above is what we should expect. Either people become infertile or we will se big degradation of the biological forms before total infertility.
ee on Thu, 30th May 2024 4:50 pm
A entropic backward degradation clock probably means that the sun will shutdown. The sun will become weak and weak and will shutdown eventually.
ee on Thu, 30th May 2024 4:52 pm
If you did maintenance on a 16 year old rusty car, you know what I mean.
ee on Thu, 30th May 2024 5:00 pm
I told you earth is an execution chamber. The day you came down on earth is the day you lost the war.
ee on Thu, 30th May 2024 5:07 pm
The global entropic degradation speed is a variable that could be modified by GOD and nobody would never know unless you pay close attention to detail such as human beings becoming weaker, steel rusting faster then before.
I told you that we are really intelligent.
ee on Thu, 30th May 2024 5:11 pm
I will repeat that. Never put any kind of laws of handguns and firearms ownership.
dd on Thu, 30th May 2024 5:45 pm
https://www.youtube.com/shorts/a7u281x0Da8
ee on Thu, 30th May 2024 6:02 pm
We could kill all the population of earth right now if we really wanted too.
ee on Thu, 30th May 2024 6:08 pm
We could changed the energy framework of earth in such a way that you flesh body would not be able to able to connect to it, and you would die right there. You are just fucking losers.
ee on Thu, 30th May 2024 8:35 pm
11:02 is how you would designed a red light district inside a C40 city. The purpose of this is to release aggressive energies from more masculine men. C40 cities are fragile and you cannot allow any kind of aggressive behaviors to get out of hands. They are using this as a testing ground. You put uneducated girl there that are willing to have their vaginas grab in exchange for money.
https://www.youtube.com/watch?v=sFGJTzqfRpk
ee on Thu, 30th May 2024 8:49 pm
Go watch Judge Dreed movie. You will understand what I mean.
https://bflix.to/movie/watch-online-dredd-z8w2/1-1
https://bflix.to/movie/watch-online-judge-dredd-y7j/1-1
ee on Thu, 30th May 2024 9:00 pm
Go look at London UK versus Pattaya Thailand.
Look at Judge Dredd movies and compare that to London UK. You see what I mean.
https://bflix.to/movie/watch-online-dredd-z8w2/1-1
https://bflix.to/movie/watch-online-judge-dredd-y7j/1-1
ee on Thu, 30th May 2024 9:06 pm
London gangs. See what I mean
https://www.youtube.com/shorts/3tEhDdHkwsc
ee on Thu, 30th May 2024 9:09 pm
I told you they will let the West die and moved natural resources toward South East Asia. I told you, you lost the West.
ee on Thu, 30th May 2024 9:10 pm
Are you still in love with the Jews and Israel.
ee on Thu, 30th May 2024 9:30 pm
Do you still think that the communists leaderships from UK, Israel and Europe are your friends?
ee on Thu, 30th May 2024 9:34 pm
US has inherited the British law system. Do you still think that the communists leaderships from UK, Israel and Europe are your friends?
ee on Thu, 30th May 2024 9:38 pm
When you look at it, North America isolating itself from the rest of the world makes sense now.
ee on Thu, 30th May 2024 9:48 pm
None of this matter. I have not seen one failure of the principle of conservation of mass. Revelation 19 will happen as we planned moons ago. I am here to collect earth’s cadavers. A failure of the principale of conservation of mass means that all the chemical reactions will not be balanced stoichiometrically, leading to the lost of the chemical manufacturing industries through the whole world.
The day you came down on earth, is the day you lost the war and the day we won the war. Revenge time is about to start.
ee on Thu, 30th May 2024 9:49 pm
Stoichiometry rests upon the very basic laws that help to understand it better, i.e., law of conservation of mass, the law of definite proportions (i.e., the law of constant composition), the law of multiple proportions and the law of reciprocal proportions. In general, chemical reactions combine in definite ratios of chemicals. Since chemical reactions can neither create nor destroy matter, nor transmute one element into another, the amount of each element must be the same throughout the overall reaction. For example, the number of atoms of a given element X on the reactant side must equal the number of atoms of that element on the product side, whether or not all of those atoms are actually involved in a reaction.
https://en.wikipedia.org/wiki/Stoichiometry#Etymology
ee on Thu, 30th May 2024 9:52 pm
Never put any kind of ownership laws on handguns and firearms.
ee on Thu, 30th May 2024 10:24 pm
You know what is funny, none of the big religions or sects, such as the Free Masons or the catholic church can give any mathematical details about how planet is built. Apparently I am the only one that can explain how earth reality is built using mathematical principals. You are all fucking frauds, liars, deceivers and manipulators.
Revelation 19;
ee on Thu, 30th May 2024 10:50 pm
Fucking women have has a smelly vagina, just saying. How come planet worship so much woman.
https://www.youtube.com/watch?v=mZlQeCFv5Lo
ee on Thu, 30th May 2024 11:02 pm
Ask the EPA to talk about the DEF fluid (Diesel exhaust fluid). Ask them if the real purpose of this DEF is to increase truck maintenance cost and push people into C40 cities.
https://www.youtube.com/watch?v=q9ev9qR7dHs
ee on Thu, 30th May 2024 11:04 pm
Ask the EPA to talk about the DEF fluid (Diesel exhaust fluid). Ask them if the real purpose of this DEF is to increase truck maintenance cost and push people into C40 cities.
https://www.youtube.com/results?search_query=DEF+fluild+problem
ee on Thu, 30th May 2024 11:11 pm
Before removing out of the road semi trailer trucks, ask the EPA what is their plans to keep the supply chain alive without semi trailer trucks.
ee on Fri, 31st May 2024 12:46 am
Des fois le spirit viens et me fait turner sur moi meme.Des fois a je tourne vers la gauche, des fois je tourne vers la droite. Qu’est ce que tu veux que je fasse, je suis obligé de partager mon corps avec mon spirit. C’est tu bon stock que tu as man.
ee on Fri, 31st May 2024 12:48 am
Mon spirit m’a fait baiser mon oreiller contre le mur. Apparament, je suis encore capable de faire les mouvement de hanches nécessaire pour fourrer un pute. Tu es un grosse cochone. Sommes-nous encore sur la planet terre.
ee on Fri, 31st May 2024 12:59 am
La grosse cochone arrête pas de me doner des orgasmes. je vais etre obligé de me masturber si cela n’arrete pas.
ee on Fri, 31st May 2024 1:33 am
Fucking losers. We are about to kill all of you. Show me one time the principale of conservaton of mass failed. You cannot, therefore natural ressouces depletion will happen. We already own your souls and cadavers.
https://www.youtube.com/watch?v=PSkQ51e_N68
ee on Fri, 31st May 2024 1:36 am
Show me one time where a chemical reaction failed because the principle of conservation of mass failed.. You cannot, therefore natural resources depletion will happen. We already own your souls and cadavers.
ee on Fri, 31st May 2024 1:40 am
Show me a piece of steel left outside that did not rust. You cannot there the entropic degradation algorithm is still active.
ee on Fri, 31st May 2024 1:40 am
We have already won the war.
ee on Fri, 31st May 2024 1:53 am
The day you decided to fight me, is the day you lost.
ee on Fri, 31st May 2024 5:56 am
Ask the EPA what happen when a truck run out of DEF fluid. Does the truck goes into limp mode or continue to run as normal. Ask the EPA if the goal of the DEF fluid is to force people living in the small cities to move into C40 cities.
Ask the the EPA if the goal of DEF fluid is to stop farming by increasing the cost of farming equipments such as tractors.
ee on Fri, 31st May 2024 6:25 am
Do you still want to be friends with UK, Europe and Israel?
ee on Fri, 31st May 2024 7:08 am
Ask the EPA if they know where the DEF fluid is manufactured? Ask the EPA if the DEF fluid is manufactured in USA ?
ee on Fri, 31st May 2024 7:14 am
What is the purpose of sex, some might ask?
To keep me highly physically aggressive.
https://www.youtube.com/watch?v=mZlQeCFv5Lo
dd on Fri, 31st May 2024 7:35 am
The problem with sex, is that depending how it is done it can make men more aggressive or be used as a way release aggressiveness.
ee on Fri, 31st May 2024 7:42 am
What is the purpose of sex, some might ask?
To keep the King highly physically aggressive.
Sex On Fire ( Kings Of Leon ) Marcus Nimble
https://www.youtube.com/watch?v=ms_N5Y9js4s