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Demand for fossil fuels may not ever return to 2019 peak levels


New Analysis by Boston Consulting Group Reveals That the COVID-19 Crisis May Have Brought Forward an Expected Decline in Demand for Fossil Fuels by More Than a Decade, Making a Return to the 2019 Peak Unlikely

While the short-term economic fallout of the global COVID-19 pandemic has already become visible, the crisis may have a significant long-term impact on global energy markets. recent research by Boston Consulting Group (BCG) suggests. Most notably, it may have brought forward an expected decline in demand for fossil fuels versus its peak last year, BCG’s report, titled Have We Passed Peak Demand for Fossil Fuels? says.

BCG analyses future energy demand and energy mix along three economic scenarios, representing V-, U-, and L-shaped recoveries. It sees it highly likely that the current crisis will significantly slow down the rise in global fossil fuel demand over the coming decade. Should slower economic recovery be accompanied with even a moderate acceleration in the transition from fossil fuels to renewables, as suggested by the “green recovery” measures currently introduced in many countries, demand would never recover to beyond 2019 levels.

In such a scenario, the impact would differ by commodity and by region. Coal is the fossil fuel least likely to recover, BCG expects. Meanwhile, demand for natural gas is likely to resume its growth path, and the trajectory for oil will put it somewhere between the other two.

“We may have reached a critical turning point for energy markets. The economic impact of the coronavirus pandemic, decreasingly energy-intensive economic growth, and continued investments in sustainable energy, all three taken into account together, are hitting fossil fuel demand hard,” said Bogdan Belciu, Partner at BCG. “This would fundamentally change the reality for many energy companies much earlier than they expected,” added Belciu.

Depending on the recovery scenario, energy companies’ margins and capital market standing will come under pressure. They will need to reduce costs and increase resilience against a longer-term environment of low prices. At the same time, they will need to accelerate efforts to transform their business portfolios, operations, and investment.

In the fight against climate change, reaching the end of “peak fossil fuel” demand is no reason for complacency. “Peak demand for fossil fuels may be behind us, but not necessarily for the right reasons,” Mr. Belciu said. “If we do not fundamentally transform our economy, projected emissions will remain incompatible with a 1.5°C or 2°C global warming reduction path. A low-price environment for fossil fuels, meanwhile, will not make this transformation easier either.”

11 Comments on "Demand for fossil fuels may not ever return to 2019 peak levels"

  1. makati1 on Wed, 24th Jun 2020 5:37 pm 

    I hope they never return. The new travel rules, contracting economies and shrinking incomes will limit consumers consumption. Waste will regress back to necessities. The world can get along with much less oil/coal/NG.

  2. SocialRevolutionComing on Thu, 25th Jun 2020 8:08 am 

    That will be my comment for today regarding Whites Western nations and DIVERSITY.


  3. Mr Confused Potato Head of Western Civilisation on Thu, 25th Jun 2020 8:46 am 

    Yeh maybe but not sure really, yeh but nah. Yeh I dunno really.

  4. Cloggie on Fri, 26th Jun 2020 4:40 am 

    Fossil fuels yawn.
    Fusion? What fusion?

    GE-France has the Haliade-X of 12 MW.

    Now Siemens-Gamesa comes up with a 14 MW model and they are going to use it for a 1.4 GW North Sea project of merely 100 towers:

    Three years ago the Netherlands completed a state-of-the-art offshore wind farm of 600 MW with 4 MW turbines. Now, merely 3 years later we are at 14 MW!

    Theoretical maximum turbine size 15-20 MW.

    One such a turbine at sea is worth something like 500,000 solar panels in energy terms on land or 1 km2. The sea comes free and we have endless supply of shallow water (600,000 km2) in Europe, sufficient for 1500 GW, where the entire EU uses 300 GW on average.

    Solar panels on roofs, yes.
    On land? Hmmm.

  5. Davy on Fri, 26th Jun 2020 4:47 am 

    “One such a turbine at sea is worth something like 500,000 solar panels in energy terms on land or 1 km2. The sea comes free and we have endless supply of shallow water (600,000 km2) in Europe, sufficient for 1500 GW, where the entire EU uses 300 GW on average. Solar panels on roofs, yes. On land? Hmmm.”

    The cloggo is not good with perspective or scale. He is horrendous with economics and embellishes physics. cloggo, Your wind power bonanza has not solved the part with intermittency on a continental scale. You are just pissing in the wind with your constant wind hype. It is a great resource that will do much but not save your ass. Besides your postage stamp country will get smaller by the year as the ice melts.

  6. Davy on Fri, 26th Jun 2020 4:52 am 

    But but, the cloggo has forecast a Chinese invasion with china dropping in 100,000 troops by passenger jets. LMFAO

    “How To Deal With China – “Made In America”

    “Australia is now ready to be a full partner in the Quadrilateral Security Dialogue (QUAD), a cooperative defense information dialogue consisting of the U.S., Japan, India, and Australia. Australia will likely also participate in the Indian-sponsored Malabar military exercise, which focuses on how India and Australia might better patrol international straits vital to commerce in the region by using military facilities on Indian and Australian off-shore islands and atolls.”

  7. Davy on Fri, 26th Jun 2020 5:01 am 

    Delusions of the extremist progressive left:

    “MMT: Not Modern, Not Monetary, Not A Theory”

    “Modern monetary theory (MMT) has a new champion, and a new bible. Stephanie Kelton, economics professor at SUNY Stony Brook, is the author of The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. Professor Kelton was an advisor to the Bernie Sanders presidential campaigns, and her ideas increasingly find purchase with left progressives. It is certainly possible that she has a future either in a Biden administration or even on the Federal Reserve Board, which is a testament to how quickly our political and cultural landscape has shifted toward left progressivism. And left progressivism requires a “New Economics” to provide intellectual cover for what is essentially a political argument for painless free stuff from government. Kelton’s essential argument, first advanced by MMT guru Warren Mosler in the 1990s, is quite simple: federal spending is unconstrained by revenue. Taxes function only to regulate demand and hence inflation; federal borrowing functions only to regulate interest rates. Sovereign government treasuries can create and spend as much money as they like to stimulate growth, especially when the economy is underperforming. If inflation spikes, taxes can be imposed to take money out of the economy. Thus the only constraints on unlimited government spending are political. Unleashing ourselves from these “self-imposed” constraints, as Mosler puts it, is purely a matter of political will. Revenue is irrelevant to how you fund a government, so why not use government to fund the economy as a whole?”

  8. Abraham van Helsing on Fri, 26th Jun 2020 5:35 am 

    “Your wind power bonanza has not solved the part with intermittency on a continental scale.”

    We are working on it, now that energy generation has been solved with wind and solar. Storage is next. Everywhere in Europe there are hydrogen projects and multiple other storage methods in development.

    At least we have a strategy, where you are merely flirting with collapse. You have nothing because you are too lazy, too desperate, too unimaginative to even face your situation and do something about it.

  9. Davy on Sat, 27th Jun 2020 4:22 am 

    “Global oil discovered 7.7 times less than consumption in 2019”

    “FYI from Peak Oil Review Feb 10, 2020: worldwide production of oil was 60.27% sourced from conventional on-shore oil, 21.59% conventional offshore shallow-water oil, 8.1% conventional offshore deep water, 6.93% U.S. Tight Oil (Fracking), and 3.10% Canadian Oil Sands oil extraction 3.10%.”

  10. Abraham van Helsing on Sat, 27th Jun 2020 5:25 am 

    “Global oil discovered 7.7 times less than consumption in 2019”

    Perhaps second thoughts about that windfarm, solar park? No?

    Ah wait, you people believe in Jesus, “diversity is our strength”, renewable energy is “not dense enough” and can’t exist without fossil fuel anyway due to notorious kwh-racism. Got it.

  11. Davy on Sat, 27th Jun 2020 10:09 am 

    “You Want To Talk Privilege? Ok, Let’s Talk Privilege…”

    “I dare say that most of you don’t recognize the exact nature of the kind of privilege that is ending, and I think once you do understand the epochal change that is underway, you aren’t going to like it. It means the vast majority of Americans are going to have to endure a massive reduction in their standard of living. At the same time, as long as “The Establishment” holds together, they will continue their breakaway trajectory of opulence, and wealth accumulation, plundering the last of the privilege to go around. Eventually it will break, but it won’t be just, it won’t be fair, it won’t be inclusive or equitable. It’ll just be ugly.”

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