Oil demand could peak by 2025 and fall more than 30% by 2050 if countries take aggressive steps to hold the long-term global temperature rise to under 2°C, Barclays analysts say in a new report.
But, but, but: That's nowhere near the trajectory things are pointing to now (seen as "development" in chart), which leads to a peak in the 2030–2035 range, but then a "long plateau" to mid-century that keeps demand at roughly today's levels.
Threat level: A 3rd scenario modeled — "deadlock" in the chart above — shows much higher demand if the world is mired in trade wars, tech uptake is hindered, and there's little focus on climate.
Why it matters: The report is a major new entry into attempts by forecasting bodies, consultancies and major energy companies to get their arms around how the global energy system will — and won't — transform in the decades ahead.
The big picture: The report's climate-friendly "dynamism" scenario would require circumstances to line up in a very particular way — and not just for oil — to keep things under 2°C.
Of note: That break with current trends would involve an array of big steps such as...
- Larger industry and national investments in efficiency and technology.
- Even faster growth and deployment of renewables, which are 40% of the global energy mix mid-century.
- Greater electrification of energy demand, rising to 35% by 2050.
- Greater recycling, cutting single-use plastics and other steps to slow the growth rate of oil used in petrochemicals.
- Significant adoption of carbon capture and storage from 2040 onwards, more than twice as much as in their business-as-usual "development" scenario.
By the numbers: Getting back the main focus of the report — oil — here's a look at where Barclays sees things heading in "development."
Overall, it sees demand just slightly higher at 105 million barrels per day (mbd) in 2050, which is roughly 5 mbd above current levels. But the uses of that oil change. Per the report:
- Oil use in passenger cars falls from roughly 22 mbd right now to slightly under 20 mbd as efficiency gains (the biggest factor) and EVs offset the huge rise of cars on the world's roads.
- Growth of the global trucking fleet means that its oil consumption rises from 24.5 mbd to nearly 30, despite gains in efficiency and electrification.
- Oil needed for jet fuel rises from 6.2 mbd to 9.2 mbd in 2050.
- Growth in petrochemicals nearly doubles that sector's demand to 18.6 mbd in 2050.
The intrigue: Speaking of petrochemicals, the report has some interesting data and projections about single-use plastics. They matter a lot!
- "A complete ban on single use plastics would reduce our estimate of oil demand in the development scenario by 6mb/d in 2050," it notes.