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Oil demand could keep growing until 2050 in conflict-ridden world


Global oil demand could peak in the early 2020s if countries pull together to hit climate goals, or keep growing until 2050 in a conflict-ridden world, according to Norwegian oil and gas firm Equinor <EQNR.OL>. Expectations for when oil demand will peak could change the supply dynamics, as investors weigh up whether to back long-term projects or to reduce their risks by focusing on investments with more rapid returns, such as shale oil, it said.

“An oil market in potential decline increases the uncertainty the producers face, reduces their investment horizon, and increases the focus on short payback periods for investments,” Equinor said in its new energy outlook.

Equinor, formerly known as Statoil, changed its name on May 15 to reflect its strategy of becoming a “broad energy” company. It plans to increase investments in renewable energy to 15-20 percent of its total capital expenditure by 2030.

Oil demand in 2050 varies between 59 million and 122 million barrels per day (bpd) in its three scenarios called Renewal, Reform and Rivalry, compared with 97.8 million bpd in 2017.

The Renewal scenario is consistent with the goal of the Paris climate agreement to limit a rise in the world’s average surface temperatures to below 2 degrees Celsius above pre-industrial times.

The Reform scenario, based on a continuation of existing policy and technology trends, sees oil demand peaking at 111 million bpd around 2030, and declining to 105 million bpd in 2050.

The geopolitical backdrop in Rivalry is “a fluid, volatile and conflict-ridden world”, where a lack of trust prevents countries from addressing climate change effectively.

“The value proposition of democracy declines, with many parts of the world now ruled by dictators and autocrats, some of whom are intent on exporting their authoritarian political models. Other issues than climate dominate the energy policy agendas,” Equinor said of this scenario.

The pace of transport electrification, energy efficiency, and “black swan” events – such as a commercial breakthrough in nuclear fusion technology, a potential source of safe and green energy – could also impact demand, Equinor added. However, as the natural decline in existing production will likely be faster than the decline in oil demand, new investments will be need to close the gap.

Even under the Renewal scenario, some 480 billion barrels of oil will be needed by 2050 from new sources, more than the total supply from OPEC countries over the last 35 years, Equinor said.


6 Comments on "Oil demand could keep growing until 2050 in conflict-ridden world"

  1. Plantagenet on Thu, 7th Jun 2018 8:52 am 

    The world has already agreed——by treaty——to continue to use oil and FF and to continue to release more and more CO2. That’s what the Paris climate accords signed in 2016 mandate. Keeping T increases below 2 degrees C? That’s supposed to happen by magic it seems


  2. JuanP on Thu, 7th Jun 2018 9:01 am 

    When I first started analyzing large amounts of oil extraction data around 2005 I reached the conclusion that oil production would peak at less than 100 mbpd. We are there now so I was wrong. Future demand is irrelevant because the supply won’t be there, that is unless you believe in Peak Oil Demand, which I never did. The Oil Peak is very near now, but I may have been a little short on my original estimate because I did not include the shale oil boom in it.

  3. Sissyfuss on Thu, 7th Jun 2018 9:50 am 

    Limits to Growth is only a fantasy in the minds of the crony capitalists. To all others it is the reality of our present day struggles. It is a bipolar world consisting of a small number of elites vs the huddled masses.

  4. Pat on Thu, 7th Jun 2018 10:59 am 

    Oil is on fire, oil is racing away to 100$ and heading to new high 150$. Oil shortages by 2020, soon oil will be new gold and many world nations will not afford and see quick collapse and die..prepare..

  5. Revi on Thu, 7th Jun 2018 1:18 pm 

    Wouldn’t it be nice if we could use what we have left to do important things, like agriculture and fisheries? Unfortunately I think it will be used for nonsense by some people while others don’t have enough to cook with. It will be used by us for wave runners and burning man while the rest of the world gets a little kerosene once in a while to cook their rice…

  6. Free Speech Forum on Thu, 7th Jun 2018 8:00 pm 

    Future generations will ask why Americans didn’t resist when the US became a police state.

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