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, 15th May 2024 12:25 am
What if the long neck and face moved forward does not stop the invasion. What is the backup plan.
ee on Wed, 15th May 2024 12:35 am
You better to have a backup plan because what you are doing is not working.
ee on Wed, 15th May 2024 8:26 am
Try do restart the housing market by manipulating the 10 year treasure yields lower. Trying to use the last copper available of earth to build electrical wires for your new houses.
Do it, the police force will be left without bullets and easy to kill bare hands. Please Do it for and lets consumes all the copper left for shit like big houses.
I hates cops and I consider them as enemies of freedom. I would have no problem killing them in the name of freedom.
ee on Wed, 15th May 2024 8:30 am
I hate the cops. I will kill them if I become a King.
ee on Wed, 15th May 2024 8:47 am
Every enemy of freedom is my enemy, this makes the cops my enemy.
ee on Wed, 15th May 2024 8:49 am
Every person that has voted and help at the creation firearms laws will be killed as enemy of freedom.
ee on Wed, 15th May 2024 8:57 am
There should be at least one piece of land on planet earth where real freedom exist. Not fake freedom, real freedom. That piece of land shall be North America.
ee on Wed, 15th May 2024 9:00 am
If you don’t like freedom, you can go live with fucking Europeans, they love submission to the authority. They love the rule of law.
I just want to repeat that, UK, Europe, Israel, South Korea and Japan can go fuck themself.
ee on Wed, 15th May 2024 9:23 am
I see no problems with people killing each other with firearms. It cleans up the nation and keep only the strong and intelligent alive. I see no problems to have nation where there is no firearms laws at all. Go live to Europe if you love slavery.
ee on Wed, 15th May 2024 9:28 am
If you don’t like freedom, go live in Europe with the communists.
ee on Wed, 15th May 2024 9:33 am
I have no problem to live in a nations where women don’t have special privileges such alimony courts and divorces courts. Go live in Europe if yo worship women that much.
ee on Wed, 15th May 2024 9:42 am
I am also in favor of rape and against rape laws. If you dress like a slut expect to be raped.
You will have so much freedom with me, that a women that wants to be raped will get its desires meet.
ee on Wed, 15th May 2024 9:43 am
Go to Europe is you support the worshipping of women and féminité.
ee on Wed, 15th May 2024 9:45 am
Go to Europe if you love females lead nations.; Get the fuck out of my playground
ee on Wed, 15th May 2024 10:10 am
I am against any kind of building code for residential housing . it is real freedom or it is nothing.
ee on Wed, 15th May 2024 10:13 am
I am against mariage and I support polygamy.
ee on Wed, 15th May 2024 10:17 am
Go live to Europe if as a men you love to enslave yourself to a women
ee on Wed, 15th May 2024 10:26 am
I believe that marriage has been weaponized against masculine men using the divorce and alimony court system. Fuck marriage. Still love your fucking Jews
ee on Wed, 15th May 2024 10:29 am
Dont interpret these comments as I want to be your savior. I am still here to collect your blood and the execution of the population of earth will go as planned.
ee on Wed, 15th May 2024 10:30 am
See my comments above as revelations before we execute earth population.
ee on Wed, 15th May 2024 10:32 am
You are incapable of self governance, you are mentally retarded, this is why you need a polices fores, divorce courts. You are too heavily mentally retarded for self governance. We will kill earth population and move to something else.
ee on Wed, 15th May 2024 10:34 am
You are too heavily mentally retarded for self governance. We will kill earth population and move to something else.
HEAVY MID-MAY SNOW HITS TURKEY; SLOVAKIA’S RECORD MAY COLD; IT’S A CULT; + THE SUN UNLEASHES AN X8.7…
ee on Wed, 15th May 2024 10:42 am
Oh, let the sun beat down upon my face, with stars to fill my dream.
I am a traveler of both time and space to be where I have been.
To sit with elders of a gentle race this world has seldom seen.
Who talk of days for which they sit and wait
When all will be revealed.
Oh, all I see turns to brown
As the sun burns the ground.
——————————————
To sit with elders of a gentle race this world has seldom seen = I came from a place where intelligence exist but earth has never been seen intelligence earth because we send the trash here.
https://www.youtube.com/watch?v=y_6M254L0XU
ee on Wed, 15th May 2024 10:43 am
To sit with elders of a gentle race this world has seldom seen = I came from a place where intelligence exist but earth has never seen intelligence because we send the trash here.
https://www.youtube.com/watch?v=y_6M254L0XU
WHY elite whitey supertard president GRETA leader of extinction movement no CO2 equals extinction has grown two enormous GLOBAL WARMING SPHERES on Wed, 15th May 2024 10:54 am
why elite supertard president EEE not interested in said global warming spheres
he is the GHEY
ee on Wed, 15th May 2024 10:57 am
Oh, when I’m on, when I’m on my way, yeah
When I see, when I see the way you stay, yeah-eah = very few people will leave earth and all the population of earth will killed.
It is a way to tell you that you live in a execution chamber.
ee on Wed, 15th May 2024 12:32 pm
Go look at the 10 year treasuries yield. They will get what they want, total destruction of North America with no rebuilding possible. They are trying to restart the housing market. They want to consume the last copper left to make electrical wire for residential housing.
It is so fucking funny how mentally retarded is the population of earth. The population of earth has never seen real intelligence.
ee on Wed, 15th May 2024 12:47 pm
Depending how the scenario will unfold, if there is no global cooling in Africa, Africans of Africa will inherit the earth. They understand exactly how this planet is designed, unlike the stupid white people.
https://www.youtube.com/watch?v=Nr_uGk1VUV8
ee on Wed, 15th May 2024 12:50 pm
It is not a sarcasm when I am saying that depending how the scenario will unfold, if there is no global cooling in Africa, Africans of Africa will inherit the earth. They understand exactly how this planet is designed, unlike the stupid white people. They are the superior race, they understand how this planet is designed. They understand how stupid the white man is and they show n no mercy at using Whites men stupidity against at their advantage.
ee on Wed, 15th May 2024 12:53 pm
It is an inverted world. The real order of thing is the necro is the superior race the whites are the inferior race. Who inherit the earth is the superior race, what happen in middle does not matter.
ee on Wed, 15th May 2024 1:06 pm
Fucking pieces of shit low IQ white people.
ee on Wed, 15th May 2024 1:09 pm
The black line is a perfect exponential curve.
https://cms.zerohedge.com/s3/files/inline-images/federal-debt-growth.jpg?itok=IDmJhxkN
https://www.zerohedge.com/economics/stimulus-today-costs-dearly-tomorrow
ee on Wed, 15th May 2024 1:14 pm
Debt exponential curve probably match the natural ressources depletions exponential curve but inverted and going down instead of up.
ee on Wed, 15th May 2024 1:34 pm
Fucking whore, fuck I hate women. look at how big is the iris of her eyes. turn the whole fuckin eye black at this point. 2:01
https://www.youtube.com/watch?v=RNLdty5KqoY
WHY elite whitey supertard president GRETA leader of extinction movement no CO2 equals extinction has grown two enormous GLOBAL WARMING SPHERES on Wed, 15th May 2024 2:04 pm
supertards please feel ease
we’re lovers of supremacist muzz
eee on Wed, 15th May 2024 2:12 pm
I personally believe in female rape. If a female wear a tiny bathing suit, it is ok to rape her. It is pretty obvious these female want to be raped and gang bang.
https://www.youtube.com/watch?v=znfLxzx0lNM
ee on Wed, 15th May 2024 2:34 pm
I support female rape, degradation and humiliaton. Ostie que c’est. La matric holographic se met a jour en temps reel. Qualisse que c’est drole
https://fr.xhamster.com/videos/creampie-slut-melissa-moore-is-cum-feaded-by-hook-up-cock-xhQw4q3
ee on Wed, 15th May 2024 3:49 pm
Just kill them. Kill all people in higher administrative position of BLM, ATF, EPA. Don’t negotiate with them kill them in a brutal manner.
https://www.youtube.com/watch?v=lnlaxYSAJAc
ee on Wed, 15th May 2024 4:58 pm
We are all about to die, they still cannot tell the truth about anything, like we heavily depleted on copper. You send someone that knows what he is talking to ask questions. If they refuse to speak you torture them, then you kill them if you are not happy with the answers.
ee on Wed, 15th May 2024 5:18 pm
Send someone that knows what he is talking about to any big university medical school. Go to the department of anatomy ask to speak to the director of the department. Ask him why nobody has noticed that people necks got longer and why are they not press conferences about that. Ask them to explain that to you. You are not happy with the explanations, torture them immediately.
ee on Wed, 15th May 2024 5:29 pm
And then you send someone to talk with the director of gender and race theory department in big Western university. Ask them if they are trying to destroy the Western nations with these programs.
You don’t like the answers, torture them immediately. You are able to do a lot more of things with a monarchy governance type that you cannot do in democratic governance system.
ss on Wed, 15th May 2024 5:37 pm
And then you send someone to talk with the director of gender and race theory department in big Western university. Ask them why they are no courses about Whites accomplishments and contributions to modern civilization. You dont like the answer, you shoot the bitch in the face and you film everything.
WHY elite whitey supertard president GRETA leader of extinction movement no CO2 equals extinction has grown two enormous GLOBAL WARMING SPHERES on Wed, 15th May 2024 9:05 pm
I knew some wrong when a pretty little white girl ran to a black man arms
dead giveaway
deeadddddddddddddddddd giveaway
ee on Thu, 16th May 2024 8:26 am
Mutual funds and financial industry in the US should be careful. One day a King might show up with a the army and surround some of their headquarers such as BlackRock, Vanguard, State Street, Cargill and start asking questions. You might even hear shooting while the employees in these hearquaters are gun down.
It is not in the best interests of the elites to lower the interest rate and crash the US dollars. It might kill you and your whole family if you are called Cargill.
ee on Thu, 16th May 2024 8:33 am
Ma theory is that some people are using the financial system and stock market to finance the invasion of earth and build condos for invaders and provide a income stream for the invaders. Invaders are using the finacial system to provide them a income to live on earth without having to work. Cargill owners should get a visit from the army and be forced to show their accounting books.
ee on Thu, 16th May 2024 8:37 am
Some of you are about to learn that there is two world at least, the visible world that you can touch with your fingers, and the invisible that you cannot touch with your fingers but with the right body can feel their energy field of these beings. Some of you living on earth are not that powerful.
ee on Thu, 16th May 2024 8:40 am
The Jews are only alive because we are keeping them alive for now.
ee on Thu, 16th May 2024 8:43 am
You are alive because we are keeping you alive for now.
ee on Thu, 16th May 2024 8:52 am
You are not that powerful compare to us.
CHILE’S CAPITAL IN THE MIDST OF “LONGEST COLD SPELL EVER RECORDED” AS SOUTH AMERICA BRACES FOR ANTARCTIC OUTBREAK; AUSTRALIA’S COLDEST APRIL SINCE 2015; NO CLIMATE EMERGENCY; + THE X-FLARES CONTINUE
eedd on Thu, 16th May 2024 9:12 am
Ma venir te chercher personnellement my grosse chienne a Martineau, y compris that criss de femme.
https://www.youtube.com/watch?v=wT-IHLnkb6Q