OIL HALT: Demand for oil in developed countries could be passed its prime.
Image: WIKIMEDIA COMMONS/FLCELLOGUY
-
The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
Read More »
Demand for oil in developed nations peaked in 2005, and changing demographics and improved motor-vehicle efficiency guarantee that it won't hit those heights again, IHS Cambridge Energy Research Associates says in a new report.
Reduced petroleum demand in developed nations could make their economic growth less vulnerable to oil price shocks, the report states.
Nonetheless, global oil demand is still expected to grow, overall, driven by China and other developing nations as the world economy recovers.
But demand for oil that has fallen in recent years in Organisation for Economic Co-operation and Development, or OECD, nations won't be made up, the analysts say.
"The economic downturn has been masking a larger trend in the oil demand of developed countries," said Daniel Yergin, the company's chairman. "The fact is that OECD oil demand has been falling since late 2005, well before the Great Recession began."
The biggest reason, the group says, is that oil demand in the transportation sector -- which is the United States' dominant use of oil and accounts for 60 percent of OECD petroleum demand -- is flattening.
The trend has been noticed elsewhere, as well. Exxon Mobil Corp. CEO Rex Tillerson said this month that U.S. gasoline demand peaked in 2007.
The Cambridge Energy Research Associates, or CERA, analysis cites several reasons why demand in developed nations -- which accounts for slightly more than half the world's total -- won't recover. Among them: Car ownership rates have reached "saturation," while populations are aging and population growth ranges from low to negative.
Also, OECD governments, driven by global warming and energy security worries, have tightened fuel efficiency standards, while high prices in recent years have also pushed consumers away from gas guzzlers.
In the United States, the Obama administration plans to implement rules that push corporate average fuel economy, or CAFE, standards to a fleetwide average of 35.5 miles per gallon by 2016, four years ahead of the schedule Congress laid out in a 2007 energy law.
Use of alternative fuels like ethanol has also grown.
"New technologies such as plug-in hybrid electric vehicles and next-generation biofuels could also have a greater impact in the future," the report states.
Global demand will nonetheless grow, fueled mostly by developing nations, CERA finds. The company forecasts world demand to increase from 83.8 million barrels per day this year to 89.1 mbd in 2014.
"Just 900,000 bpd [barrels per day] of growth is expected to come from OECD countries, just a fraction of the 3.7 million bpd of demand lost over the course of 2005 to 2009," the report states.
But CERA cautions that developed nations will hardly be through with oil anytime soon. The demand reduction in OECD countries between the 2005 peak and 2030 is expected to be "fairly modest," it states.
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500
See what we're tweeting about
8 Comments
Add CommentThe quick and easy answer to peak oil is compressed natural gas as a vehicle fuel supplemented by a conversion of fossil fuels to cheap mass produced nuclear. Call it the Nuclear Picken's Plan.
Reply | Report Abuse | Link to thisRipoff priced natural gas to my home cost about $1.15 a gallon equivalent. The gas stations in town sell it for $3 a gallon - the difference a huge profit to a giant corporation made possible with large campaign donations to the right politicians.
The home Phill station unfortunately is another ripoff at $7000. Its really no more than a scuba tank compressor. Could be mass produced for a few hundred bucks. Unfortunately, the rights to the Phill are now owned by the same giant corporation that sells the ripoff CNG at the pump. They are not in a hurry to ramp up production.
Utah does it right selling natural gas at the gas station for $1.00 a gallon same as at home. Must be Morman morality restraining corporate greed and political corruption for the public good. Who knew it could happen in America.
The cost to produce a flex fuel cng vehicle or convert and existing is a lot less than the cost of the battery for an electric vehicle. Even more so, if there was mass production of cng vehicles, conversion kits and home compressors.
As we convert to mass produced nuclear power at $1000 a kw, home heating and power generation natural gas will add to the current glut of natural gas on the market, allowing us save trillions by ending domestic use of oil and paying for the nuclear transition.
Unfortunately politicians (outside of Utah) are bought and paid for by Big Oil, so unless gas utilities and smaller producers start buying their own politico's nothing will happen.
How can they guarantee that gas and oil prices will not hit this peak again as long as we have people like George W. Bush out there?
Reply | Report Abuse | Link to thisJamesDavis:
Reply | Report Abuse | Link to thisGet over the Dub thing; that's sooo 2000's.
The new threat to your world is the Copenhagen Summit. Imagine signing over the control of your government and corporations to the UN under the stalking horse of CO2 controls. No wonder the UN loves the IPCC and will brook no criticism.
That is what the Copenhagen Summit is all about, and Barack Obama wants to sign up.
Jamesdavis,
Reply | Report Abuse | Link to thisDid W require that US consumers use the maximum amount of oil possible? I think not. We are free to decide for ourselves. And, we like large vehicles. W didn't decide that. We did as free people.
Your hero Obama will soon take that choice away and Americans, when they wake up from their dreams of O-topia, will not be very happy about that.
And by the way, the claim was that demand won't hit the peaks again, not prices. Soon your man Obama will make the dollar so worthless that a higher price peak is virtually certain.
Gluttons. I look forward to watching you choke on your own excess.
Reply | Report Abuse | Link to thisSoccerdad is right. Nobody forces anyone to use more oil. Did anyone force the majority of US citizens to purchase larger and larger automobiles. No, it was there choice.
Reply | Report Abuse | Link to thisPeople do what they want as long as they can afford it. When they no longer can, they blame someone.
Sadly, it seems most people beleive the solution is an external tax to "force" a certain market.
Reply | Report Abuse | Link to thisNG is not going to work in cars because it takes up too much space, fear and it can't go through tunnels. It will be great in hybrid trucks, Semi's.
Nukes is too costly as, far above Sethdayal's quote. Latest US nuke bids was $8.5k/kw. RE or NG is far cheaper to charge EV's. NG making cogen electric for charging EV's will go 6x's farther than using NG in an ICE.
What W and repub did and still are doing is subsidizing oil by about $1.50/gal according to the WSJ, CIA, Economist Mag. That caused our consumption, national dent, trade deficit to be far larger and lead to this recession.
But starting in 06 oil prices started rising, cutting fuel consumption. If we are smart we will tax oil $1.50/gal to pay it's full cost of the pollution, Persian gulf military, oil wars, trade deficit costs plus depletion allowances, tax breaks, that our in our income taxes, health care costs, etc. The beauty of this is most of it will be paid by Iran, Russia, oil dictators, big oil by lower oil prices.
With PHEV's, EV's especially light, aero ones and more eff ICE cars and NG trucks, trains we could cut imported oil completely in 7 yrs. It will happen whether we tax it or not, the only difference is who will get the money, our gov or the above sources. Best the gov get it and equally divide the revenue to a tax cut, help switching to alt fuels, more eff cars and balancing the budget. But repubs, oil, coal state dems won't let that happen, they rather our enemies make the money.
I disagree that oil production will grow as we hit peak oil in 2008 and the cut of oil rigs since, won't allow enough replacement oil to keep up with old fields drying out. We are only producing 1bbl for every 3bbls used in the world.
Luckily we have Obama, dems in charge that as oil hits $150/bbl late next yr, will finally have enough votes to pass a oil tax and make us energy independent. To bad they won't be able to do it now and start us back to economic recovery, balance the budget and make millions of jobs. But we can thank the repubs for stopping that, supporting our enemies..
Students aspiring to be petroleum engineers should pay attention to the demand for crude oil and other petrochemicals.unlike agro-allied industries,demand for petroleum products is very unstable and with improving technology ,it will soon become neglible.the demand for petroleum products skyrocked in 2005 and its is said that it will not be that way anymore.the recession in the world has caused demand to fall and will continue to.take your time and retrace your steps,I advice that you make a career choice that is not so much at the mercies of market forces.Olive Emmanuel Ekanem.
Reply | Report Abuse | Link to this