When the last global pandemic spread worldwide, people everywhere bunkered down at home to ride out the virus. The use of petroleum products dropped drastically as a result, with global oil consumption bottoming out at about 70% of pre-pandemic levels in what has become known as the "Black April" of 2020 [1].
Surely, this was it. Environmentalists and non-governmental organizations everywhere claimed that 'peak' global oil demand had finally arrived. Even British Petroleum (BP), a huge multinational energy company whose business is heavily reliant on oil and gas production, stated in its 2020 industry outlook that 'peak oil' was here [2].
Many were doubtful if global oil demand could ever recover. After all those years of premature predictions on 'peak' demand, was it finally here?
Fast forward nearly three years, and global oil consumption levels are back to where they were pre-2020 and more robust than ever before – in a similar fashion to when they have dropped every time in the past. In fact, the International Energy Agency's (IEA) latest projection sees global oil demand rising 6% between 2022 to 2028 to reach a new record high of 105.7 million barrels per day (bpd) – driven by robust demand from the aviation and petrochemical industries [3].
'Peak' oil demand is now in sight says the IEA.
"Growth in the world's oil demand for oil is set to slow almost to a halt in the coming years…" according to the Paris-based organization. The world's leading energy monitor predicts growth to slow to 0.4 million bpd in 2028.
Some analysts say the IEA consistently underestimates global oil demand [4]. On the opposite end of the spectrum is the Organization of the Petroleum Exporting Countries (OPEC), predicting that global energy demand will rise 23% by 2045, with oil demand increasing to 110 million bpd [5].
Will any of these predictions come true?
If history is any indication of the future, I won't go betting on any 'peak' oil scenario just yet.
According to the industry's latest Statistical Review of World Energy, fossil fuels still accounted for 82% of global energy supply despite record renewables growth in 2022 [6].
It turns out that switching away from fossil fuels towards renewables for our energy needs is extremely difficult for societies that use thousands of products made possible by coal, oil and natural gas in every which way – in particular, to manufacture the building blocks of the modern world (cement, concrete, steel, plastic), all made possible in commercially viable quantities by the high energy intensity of fossil fuels.
These latest figures from EI's report are incredible, but not surprising. Anyone with a basic understanding of how reliant the world is on fossil fuels and what future global energy demand looks like as the population approaches 9.7 billion by 2050 won't be shocked that we will need an "all-of-the-above" solution to meet our future energy needs.
While the exact date of 'peak' oil continues to elude us all, one thing has been made abundantly clear: global oil and gas demand is growing, and the world will need both these commodities for a very long time. And whether we finally and truly see 'peak' oil in 2028, or after 2045, consumption will slowly decrease for decades thereafter.
As long as the world needs these energy sources, it only makes sense that they come from the most stable, responsible and reliable producers around --- from sources like Canada, global bastions of democracy that uphold environmental protections and human rights, and are in continual pursuit of lowering emissions.
Peak oil is not here, and it remains quite unclear exactly when it will finally come around. But what should be crystal clear to us all after more than a century of false 'peak' oil predictions is that consumption is here to stay, and the world needs more responsibly produced Canadian energy for decades.
SOURCES:
1. Bloomberg. (2022, February 16). Oil Prices Near $100 as Global Economy Struggles to Balance Post-Covid Crash. Retrieved June 28, 2023, from https://www.bloomberg.com/news/articles/2022-02-16/oil-prices-near-100-as-global-economy-struggles-to-balance-post-covid-crash
2. Energy Post. (2022, April 9). BP Outlook 2020: Peak Oil Has Already Happened. Retrieved June 28, 2023, from https://energypost.eu/bp-outlook-2020-peak-oil-has-already-happened/
3. International Energy Agency. (2023, June 14). Growth in Global Oil Demand is Set to Slow Significantly by 2028. Retrieved June 28, 2023, from https://www.iea.org/news/growth-in-global-oil-demand-is-set-to-slow-significantly-by-2028
4. CNBC. (2023, June 14). The IEA Consistently Underestimates Global Oil Demand: Paul Sankey on IEA’s Latest Prediction. Retrieved June 28, 2023, from https://www.cnbc.com/video/2023/06/14/the-iea-consistently-underestimates-global-oil-demand-paul-sankey-on-ieas-latest-prediction.html
5. CNBC. (2023, June 26). OPEC Says Oil Demand Will Hit 110 Million Barrels Per Day in 2045. Retrieved June 28, 2023, from https://www.cnbc.com/2023/06/26/opec-says-oil-demand-will-hit-110-million-barrels-per-day-in-2045.html
6. Energy Institute. (2023). Statistical Review. Retrieved June 28, 2023, from https://www.energyinst.org/statistical-review