Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on April 17, 2021

Bookmark and Share

Goldman Sees Oil Demand Peak in Transportation 5 Years Out


Add Goldman Sachs Group Inc. to the list of forecasters calling for oil demand to peak sooner rather than later.

The bank brought forward its forecast for peak oil demand in the transportation sector by one year to 2026, if not sooner, largely due to the accelerating adoption of electric vehicles. Overall crude consumption will keep expanding this decade due to jet fuel and petrochemicals, but growth will be at an “anemic” pace past 2025.

Goldman is the latest to reevaluate what the end of demand growth will look like for oil. Among the most aggressive calls is that from BP Plc, which said last year that the era of oil demand growth may already be over, while the International Energy Agency has taken a more conservative view than BP, seeing demand plateau from around 2030.

Most recently, Wood Mackenzie Ltd. warned of the “severe” risks for oil companies not preparing for an accelerated energy transition. If governments move aggressively to cut greenhouse emissions in line with the Paris Climate Accord, oil consumption would start to decline as early as 2023

“Government policies driving higher efficiency gains and lower emissions have had the strongest bearing on road transport demand,” Goldman analysts including Nikhil Bhandari and Damien Courvalin said in a report. “Petrochemicals will become the new baseload for oil demand, driven by economic growth and rising consumption, especially in emerging markets.”

See also: Woodmac Sees ‘Severe’ Impact for Oil & Gas in 2-Degree World

Avoiding peak oil this decade largely comes as economic growth continues in emerging markets, while for developed markets, Goldman sees overall oil demand never returning to 2019 levels. The decrease in road transport demand, which accounts for 43% of overall oil consumption, is also being exacerbated by a shift toward permanent work-from-home behaviors in the wake of the pandemic, the report said.

Tightening emission targets in the U.S. and Europe are spurring the outlook for rising electric vehicle penetration, which if adopted at an even faster pace, could drive road transport demand to peak one year earlier than the bank’s base-case scenario. Meanwhile, significantly higher oil prices could also bring forward the peak for overall oil demand, the bank said.

For others in the oil and gas industry, the end of oil demand growth is still some ways off and fossil fuel will still be needed as countries work toward their environmental goals. Pioneer Natural Resources Co. Chief Executive Officer Scott Sheffield pegged peak consumption at 2035 during the BloombergNEF summit earlier this week.

While the future is one of lower carbon, oil continues to help fill the world’s robust energy needs and has remained essential even as the pandemic ravaged economies globally, said Bruce Niemeyer, vice president of strategy and sustainability at Chevron Corp.

“It’s a very big planet, with lots of needs around the world,” Niemeyer said at the summit on Wednesday. “As we work toward that lower carbon future, we have to be very thoughtful about the energy system today, its size and how it can evolve to be lower carbon and lower carbon for everybody.”


4 Comments on "Goldman Sees Oil Demand Peak in Transportation 5 Years Out"

  1. Cloggie on Sun, 18th Apr 2021 4:42 am 

    European wind energy companies conquering North-American markets, after the end of the oil age:—which-public-companies-could-power-a-boom/?sh=146829092c40

    (scroll down)

    Names like Ørsted, Equinor, Shell, EDF and most of all Iberdrola are dividing the North-American electricity generation market among themselves.

    It’s the least we can do for Americans, after the latter served us so well with their oil since WW2.

  2. Cloggie on Sun, 18th Apr 2021 5:37 am 

    Eastern Europe (Ukraine, Bulgaria, Romania) has 444 GW offshore wind potential:

    Average EU electricity consumption 24/7/365: 300 GW.

  3. Cloggie on Sun, 18th Apr 2021 6:47 am 

    The Chinese are following the good European example (what else is new?) and will also build offshore wind installer ships, able to install up to 20 MW turbines:

  4. Cloggie on Mon, 19th Apr 2021 5:30 am 

    Not everybody in America is a short-sighted collapsenik, like most uninformed laymen here are. Take Berkeley for instance:

    “Cost Wind Energy Could be Halved by 2050”

    Note that renewable electricity is already the cheapest by far, if you ignore storage cost.

    Whatever the reason the world may go under some day, it won’t be because of a lack of energy.×581.png

Leave a Reply

Your email address will not be published. Required fields are marked *