Nov 13, 2018

The IEA's case against peak oil demand

Data: International Energy Agency, World Energy Outlook 2018; Chart: Harry Stevens/Axios

The International Energy Agency's newly released World Energy Outlook finds that oil demand for passenger vehicles is slated to peak in the mid-2020s due to more efficiency, biofuels, and electric vehicles. That's according to their "new policies" scenario, which models not only existing policies but also countries' announced plans and emissions targets.

But, but, but: That projected mid-2020s peak doesn't mean that overall global demand for crude oil is reaching an inflection point anytime soon. That's because other uses — petrochemicals, heavy freight, shipping and planes — remain robust.

  • Add it all up and the report sees global crude oil demand rising slightly to reach 106 million barrels per day in 2040 (it's roughly 100 mbd right now).

Why it matters: The findings underscore that despite heavy and justified attention to electric cars, passenger transport is just one part of the wider equation when it comes to oil.

By the numbers: As the Financial Times flagged here, the report projects that while the numbers of cars in the global fleet would soar 80% by 2040, oil demand for passenger cars, which is over 21 mbd right now, would be around 23 mbd in the late 2020s. But, elsewhere...

  • "Oil demand for trucks grows by 4 mb/d over the period to 2040, even though vehicle and logistical efficiencies avoid nearly 5.5 mb/d additional demand growth in 2040. Oil use in petrochemicals sees the largest growth (5 mb/d) of any sector," the IEA states.

Yes, but: The annual report also models a "sustainable development" scenario — a wholly upended global energy system where policy and investment trends are bent to be consistent with the goals of the Paris climate agreement. On the oil side, that means overall demand peaks in almost all nations by 2030. Per an IEA summary...

  • "By 2040, cars that rely solely on gasoline and diesel are 40% more efficient than today; there are 930 million electric cars on the road (50% of the global car fleet); a quarter of buses are electric; and nearly 20% of fuels used by trucks are low or zero carbon."
  • "There are also major changes in most other sectors and as a result, total oil demand in 2040 in this scenario is 25 mb/d lower than today."

Go deeper:

Go deeper

Electric vehicles are coming, but no one is sure how fast

Data: Columbia Center on Global Energy Policy; Chart: Axios Visuals

A new study helps to show that experts are all over the map when it comes to gaming out the rise of electric vehicles in the global marketplace.

Why it matters: The speed at which EVs become truly mainstream is one variable affecting the future of oil demand and carbon emissions. Passenger cars account for roughly a fourth of world oil demand.

10 energy and climate issues to watch in 2020

Illustration: Sarah Grillo/Axios

From presidential politics to China to oil prices, here’s what I’m watching this year.

The big picture: A few key decisive moments this year will help determine whether concerns over climate change — rising since my last two annual outlook columns — will translate into action that would transform our global energy system.

Go deeperArrowJan 6, 2020

Electric school buses are batteries for the grid

Illustration: Sarah Grillo/Axios

Utility companies are helping cash-strapped school districts replace diesel buses with electric ones that have a secondary purpose: helping to manage electricity demand.

Why it matters: Electric buses are cleaner, but cost about three times more. Using them for energy storage can help close that cost gap and smooth out energy demand on the electric grid.

Go deeperArrowJan 10, 2020