…Peak Oil Demand is Bogus and Meaningless…
For decades, Malthusian economists and others have predicted the world would run out of oil. They used Hubbert’s Curve to establish when the world would reach peak oil, from which point the world’s oil supply would begin to decline. Hubbert’s Peak represented when half the world’s oil supply would have been consumed.
It was debunked, as all Malthusian principles about resources being finite are eventually debunked, this time by the shale revolution.
Now, proponents of battery-powered vehicles (BEVs) are predicting a new peak for oil: Peak Demand, the point at which the number of BEVs using electricity for their fuel rather than oil, offsets the annual increase in the demand for oil from light vehicles.
Recently the WSJ published an article, New Fuels Spur End Of Oil Era, which included projections as to when Peak Oil Demand would arrive.
DNV and Shell have predicted peak demand for oil will occur in 2023, five years from now, with Equinor (formerly the Norwegian company Statoil) not far behind.
“DNV GL is an international accredited registrar and classification society headquartered in Høvik, Norway.”
Peak Demand raises three issues:
- Is the End of the Oil Era upon us?
- Is it possible for BEVs to eliminate the need for oil for light vehicles?
- What are the motives of those promoting Peak Demand?
Assumptions used for this and the next two articles:
- Light vehicle (four-wheel passenger car and pickup truck) sold (worldwide) in 2016: 72,105,000 vehicles
- Total light vehicles worldwide in 2018: 950 million
- Ten-year average (2007-2017) growth rate of light vehicle sales worldwide: 4%
- Average miles per year driven, per light vehicle, worldwide: 9,300 miles (This represents the approximate midpoint between US and European miles driven, with data from China being inconclusive, but credibly near 9,300 miles.)
- Fuel efficiency of light vehicles: 26 mpg in 2018; and alternatively the proposed EPA requirements of 37 mpg
(Note: These assumptions are based on available data, which has been cross-checked to assure their credibility.)
Issue #1: Is the End of the Oil Era upon us?
The basic fact is: Only a portion of the oil used worldwide is for light vehicles.
ExxonMobile’s, Outlook for Energy, depicts this graphically.
- Total demand for oil is approximately 98 million barrels per day (MMb/d) in 2018, while oil used for light duty transportation, including motorcycles and mopeds, etc., is around 24 MMb/d. Leaving around 74 MMb/d for other uses.
- While the adoption of BEVs could result in a reduction of oil used for light duty transportation (dotted line in figure), demand for oil for other uses will continue to grow.
- Some heavy duty trucks might also convert to battery power or LNG, but demand for jet fuel and other uses will grow.
Even if the need for oil for light-duty vehicles disappears, there will still be a need for large quantities of oil.
Peak Demand is intended to establish the End of the Oil Era, as headlined in the WSJ article.
But, at least 70% of the oil used today will continue to be needed in the future.
Peak Demand for oil is a bogus depiction of the future, that is intended to mislead people into thinking oil won’t be needed and should be kept in the ground.
The truth is:
Large quantities of oil will be needed in the future and new oil supplies will have to be found and exploited.
It’s possible for demand to once again go above 98 MMb/d during this century.
Peak Demand is bogus and misleading, but, will BEVs be able to eliminate increased use of oil for gasoline or diesel fuel by 2023?
The next article will address that issue.
. . .