Some industry leaders say it’s possible that growing climate change concerns could lead to flattening oil demand in this decade. That’s as alternative energy sources become popular and more fuel-efficient vehicles roll off the assembly lines.
Of course, this comes on the heels of a decade when the opposite was true, as a shale drilling revolution has transformed the U.S. into the world’s biggest oil and gas producer.
Just how quickly demand peaks and to what extent depends upon the worldwide response to climate change. A report issued by the International Energy Agency in Paris predicts oil demand will slow to a crawl after 2025, but won’t peak until the 2030s. In that scenario, decreases in global fuel demand for passenger vehicles would be largely offset by demand increases in shipping, aviation and petrochemicals.
David Dismukes, executive director of LSU’s Center for Energy Studies, agrees that there will be a push toward greater fuel efficiencies and environmentally friendly fuels in some countries, but it’s not clear whether it will lead to a worldwide shift in demand. There are too many other factors, he says, to consider.
“I don’t know about demand going down, but we could certainly see the percentage rate of growth start to flatten out over time,” Dismukes notes.
Gifford Briggs, president of the Louisiana Oil & Gas Association, says he’s not worried about demand shrinking. Naysayers have predicted doom and gloom for the last 40 years, even as oil and gas demand reaches unprecedented levels, he says. As recently as 2008, analysts and investors argued over the timing of “peak oil,” when the world would begin to exhaust its reserves of crude. Read the full story from 10/12 Industry Report. Subscribe to the free 10/12 Weekly e-newsletter here for regional industry news.