It is fairly common nowadays to see relatively near-term estimates for a point at which demand for petroleum-based fuels begins to decline. The term often used to describe this “tipping point” is Peak Oil Demand. When I say “near term,” I mean right around the corner if you look at an estimate published last year by the International Energy Agency-IEA, an intergovernmental agency headquartered in Paris, France, and originally established after the Oil Embargo of 1973 to help cushion against future oil shocks. This agency has expanded its mission to a fairly broad remit over the years since, and it is not the purpose of this article to detail all its endeavors. One role we will highlight is that of the one it plays in gauging and advising member governments on energy security and energy sources for the coming years.
In that capacity, the IEA in a report entitled, Oil 2023, and published last year settled on 2028 as the year past which the use of petroleum fuels will begin to decline.
“Growth in the world’s demand for oil is set to slow almost to a halt in the coming years, with the high prices and security of supply concerns highlighted by the global energy crisis hastening the shift towards cleaner energy technologies, according to a new IEA report released today.”
This view is largely shared, particularly with respect to liquid motor fuels, by other agencies and organizations that produce long range estimates. The U.S. Energy Information Agency-EIA, Rystad, and Det Norske Veritas- DNV, all show this category tailing off rapidly in the 2030s as electric vehicles assume larger shares of passenger vehicles. We will call this the “Bear Case” for liquid fuels.
As you might expect the Organization of Petroleum Exporting Countries-OPEC, disagrees with this view. In fact in their recent report on oil demand outlook, published in Nov 2023, they see oil demand of all kinds, except for electricity generation, rising from ~105 mm BOPD in 2025, to 116 mm BOPD in 2045. This forecast show use of oil as a road fuel continuing to be the largest source of demand increase for this period.
The report notes that “the divergence between the IEA and OPEC outlooks is largely due to assumptions regarding the speed at which internal combustion engine vehicles will be replaced by electric vehicles.”
What is interesting is that it is very difficult, if not impossible, to see a production trend being established that would support the bear case. In the U.S., we are pumping at a rate of over 13.2 mm BOPD and still importing ~6.7 mm BOPD to feed our nearly 22 mm BOPD daily habit. The U.S. Energy Information Agency-EIA forecasts in their monthly Short-Term Energy Outlook-STEO that by the end of 2025, global production and demand fall into a fairly tight balance at 105 mm BOPD. That certainly isn’t a long-term trend, but as is often said, the long-term trend is made up of a bunch of short-term ones. For my part, I would say that the trend line in the STEO graph below matches the OPEC estimate more closely than the other three.
Both of these notions cannot be true. Which is the correct assumption about future oil demand? Or are they both wrong? What are two factors these two disparate views of oil demand are not taking into account?
The first answer lies in how you interpret the growth of the middle class in China, India, and Africa in terms of energy demand and the final form it will take. The second is the advent of energy demand for Artificial Intelligence (AI), an entirely new source of demand that is just now starting to appear in energy demand forecasts. I discussed one possible outcome of this demand for U.S. natural gas in an article in March 2024.
To be clear, I am not arguing that AI demand will directly impact crude oil demand as a primary source. Most analysts are factoring renewables and natural gas to meet AI demand. What will impact demand for WTI and other baskets of crude is the relationship to light oil production in the U.S. and the associated gas that’s produced along with it. We will leave that discussion for a future article and refocus on our basic topic. What could oil demand actually be when accounting for growth in currently underserved but upwardly aspiring lower classes?
Then there is the Bull Case for oil. Arjun Murti, a well-known energy commentator and partner at energy analyst firm Veriten, as well as a former Goldman Sachs energy analyst, discussed future energy demand in a recent podcast on his Super-Spiked blog. In the episode titled, “Everyone is Rich,” Arjun posits what the impact on world energy demand would be if everyone was as energy-rich as the “Lucky,” 1.2 billion people that live in the Western World. More specifically, Arjun asks what it would mean for the other 7 billion people in China, India, Asia, and Africa to have the lifestyle that Americans, Canadians, Europeans, and a few other countries enjoy. The answer he comes up with on an absolute basis, 250 mm BOPD, using a reference point of 10 bbls a year!
Where are we now? The U.S consumes ~22 bbls of oil annually per capita while China consumes 3.7 bbls per capita. Indians use just 1.3 bbls per annum. That’s a pretty wide gap, and as Arjun notes, “economic growth and energy growth are one and the same. You do not get economic growth without adequate energy.”
One of the arguments put forward by the Peak Oil crowd is that efficiency growth Gross Domestic Product (GDP), and energy substitution will bend the curve on oil demand, as noted in the 2030’s, and spell the twilight of fossil fuels. Arjun points out that there is simply no evidence this is happening using data compiled by Goldman Sachs through 2019. Efficiency gains never lower the amount of energy needed to produce an additional dollar of GDP, above 2.7% GDP growth. A point rarely hit in modern times. To close that gap and attain growth you need more energy inputs. Oil.
Looking at Arjun’s graph below, which uses China as an example, we can see with their present demand of 3.7 bbls per capita which equates to about 15 mm BOPD. With 10 bbl per annum added on for growth in the middle class, you get to 35 mm BOPD to meet Chinese energy demand. Even if China attains 100% Electric Vehicle-EV penetration, not something Arjun (or I) believe is possible, you still have 27 mm BOPD of oil demand. According to SP Global China produces about 4.1 mm BOPD, leaving a gap of about 11 mm BOPD they must import to meet present-day demand.
A point that leads me to what Arjun noted as the ultimate demand limiter and why, although countries that will surely desire to increase their oil usage may not be able to do so. Geopolitical limits to imports. Quoting Arjun, “There is no precedent for countries importing 20-30 mm BOPD” to meet their energy needs. The U.S., before the advent of shale production was importing over 10 mm BOPD as recently as 2005. That’s what we know is possible.
It should be noted that India is in a similar fix and for it to meet Arjun’s 10 bbl per capita standard for being rich, they must import 35-45 mm BOPD. We just don’t know if this can be done from both a logistical and sheer capacity of supply basis. As the EIA graph above highlights global oil production has increased only about 3 mm BOPD since 2019. In order for the world’s poor to become richer, a great deal more oil will have to come to market.
Your takeaway
The message of the growth of the middle class globally often gets lost in the constant blare of climate change and energy transition noise. The fact remains that the world we live in today and the one likely to exist at mid-century, runs on oil.
The notion that the world can quickly and painlessly transition to other forms of energy has developed some, not holes, but gaping craters in recent times. Offshore wind farms are being canceled as costs mount. Car manufacturers are delaying implementation of EV rollouts due to lack of interest from consumers. Communities impacted by siting of solar farms are pushing back on land use as they propose to gobble up large tracts for this purpose.
Roger Pielke, another well-known energy commentator and author, in a post in his Substack, The Honest Broker, cites a White Paper by Vaclav Smil that discusses our energy transition progress to this point-
“All we have managed to do halfway through the intended grand global energy transition is a small relative decline in the share of fossil fuel in the world’s primary energy consumption—from nearly 86 percent in 1997 to about 82 percent in 2022. But this marginal relative retreat has been accompanied by a massive absolute increase in fossil fuel combustion: in 2022 the world consumed nearly 55 percent more energy locked in fossil carbon than it did in 1997.”
Balanced against this lack of progress in substituting oil for other forms of energy is the fact that the world’s energy supply is in a tight balance with demand at present. If the poor of the world make even modest progress toward Arjun’s 10 bbl per annum prognostication in the coming years, the Bull Case for oil will certainly asset itself.
ee on Thu, 23rd May 2024 4:38 am
It is amazing how much the population of planet earth love to humiliate themself with shit like this:
Reconnaissance de la Palestine : “Le 7 octobre a été un piège parfaitement tendu” (Geoffroy Lejeune)
https://www.youtube.com/watch?v=ymy3X_Cskl4
ee on Thu, 23rd May 2024 4:44 am
Just be looking at the news headline I can tell that you are just fucking losers that are heavily mentally retarded.
Déplacement de Macron en Nouvelle-Calédonie : « Il faut que cela serve d’électrochoc »
https://www.youtube.com/watch?v=oiQWPmzwedY
WHY elite whitey supertard president GRETA has grown two enormous global warming SPHERES on Thu, 23rd May 2024 8:33 am
nobody but supremacist muzzies know
ee on Thu, 23rd May 2024 9:42 am
We have already won. Conservation of mass will deliver your cadavers to me. You lost.
ee on Thu, 23rd May 2024 9:47 am
You are just fucking losers.
ee on Thu, 23rd May 2024 9:51 am
Did I tell you that we created women as someone that is mentally retarded. We did that to torture the population of earth and to assure that we could time the moment of collapse better. Earth is a shot life span reality.
Did I tell you that I hate women and cops. Never take away the handguns of a man.
Women smell really bad because of their vagina,
ee on Thu, 23rd May 2024 9:54 am
Did I tell you that we don’t believe in sexual reproduction. We only force sexual reproduction on people that we hate. We only force people to mine the earth for mineral when we hate them.
We are forcing you to do hard manual labor such as mining because we hate you.
ee on Thu, 23rd May 2024 9:59 am
You have periodic table of only 117 elements. We could have added more elements to make your life easier, but we don’t like you enough for that, we like watching you suffer. We could have added element that you can change their shape using electrical current or magnetic field. We hate you too much for that.
ee on Thu, 23rd May 2024 10:01 am
We could have created a land where there is no insects, we don’t like enough for that. We like seeing you suffer.
ee on Thu, 23rd May 2024 10:03 am
We could have gave you a real vehicle for you soul. Not this cheap flesh insect body you are currently living in. We hate you too much for that, I love seeing you suffer.
eedd on Thu, 23rd May 2024 10:11 am
Never taka away the handguns of a man. he will kill the population of a planet at revenge.
ee on Thu, 23rd May 2024 10:18 am
Never put any kind of ownership laws on handguns and firearms. Some men will kill all the population of a planet for revenge.
ee on Thu, 23rd May 2024 10:24 am
You should have chosen freedom over safety. You made the wrong decision. We tried to tell you to chose freedom instead over slavery, you have chose slavery because you are low IQ losers that are mentally retarded.
https://intellectualconservative.com/articles/founding-fathers-quotes
What ever decision you take on earth, it is always the wrong one.
ee on Thu, 23rd May 2024 10:43 am
Wait fucking cock sucker. Suicide yourself now while you still can is my advice.
ee on Thu, 23rd May 2024 10:58 am
I always knew you were just fucking losers without any real power. All you have is the power of the media, and the power of scary media headlines. You are just fucking losers.
13:00 AT / 12:00 ET: Federal agency provides outlook on huricanes.
https://www.youtube.com/watch?v=IbVsrXmjpf4
A real GOD would have replenished the earth with natural ressources. All you have is the media as source of power of people and your guns. We are running out of copper. Very soon the only power you will have it the power of mediatic propaganda. Vous êtes juste des criss de perdants.
ee on Thu, 23rd May 2024 11:07 am
GOD you look like fucking losers with theses cheap media clips. Stop humiliating yourself. You look like powerless losers that lost control of the situation.
President Biden Hosts A Bilateral Meeting With Kenyan President William Ruto
https://www.youtube.com/watch?v=25XdyYdQ68U
ee on Thu, 23rd May 2024 11:10 am
The only two powers that you have is the media, and restrictives firearms laws. You are just fucking losers. Very soon, there will be no copper, no bullets for your police for police force. Very soon you will be down to one power, the power of the media. You are just fucking pathetic losers.
ee on Thu, 23rd May 2024 11:33 am
Ok I made a mistake you have 3 powers. But you are still a fucking loser because you cannot access earth calculators. You have the power of the media, the power of the guns or police force and the power of the justice system
The power of the justice system is dependent on the power of the police force. The are both link together. You lose one you lose both. Very soon, there will be no copper, no bullets for your police force therefore no police force. Very soon you will be down to one power, the power of the media. You are just fucking pathetic losers.
ee on Thu, 23rd May 2024 11:38 am
Copper situation is so critical that you will not be able to mount military operations to kill the invaders living in big cities. You are totally fuck. We have win all the way.
On top of that a civil war will not happen because of copper depletion and the lack of bullets to sustain a long term civil war.
I told you that we are good and on top of this game.
ee on Thu, 23rd May 2024 11:41 am
Depending how this will turn out, I expect that almost the judges will be executed. Familly and alimony judges will be first ones to be executed by grievous father. The justice system will stop to exist as soon as the police run out of bullets.
ee on Thu, 23rd May 2024 11:46 am
Eventually you will have to ration copper and stop the manufacturing of bullets. You will have to allocate copper to more critical applications such as electrical motors, electrical wires for industrial application, and so on. Can’t you see the future? I can.
The rumor will spread out that the manufacturing of bullets stopped, this is where revenge and retaliation will start against the judges, politicians and cops.
eedd on Thu, 23rd May 2024 12:08 pm
When I am saying revenge and retaliation, it will be real revenge. You will see whole genetic linage removed, meaning the wife and kids will also be killed. Oh baby, you will see how much the population really hate politicians, cops, judges.
ee on Thu, 23rd May 2024 12:11 pm
Never take away the handgun of a man. You should have chosen liberty over safety. As always you always make the wrong decision on everything.
ee on Thu, 23rd May 2024 12:14 pm
OH baby, baby, it will a glorious moment for us lover of liberty and freedom. What a glorious moment to be alive. All this blood.
ee on Thu, 23rd May 2024 12:18 pm
You fucking losers make me laugh. I can smell your fear and desperation just be reading the title of the video. You look weak and desperate.
G-7 Host Minister Giorgetti Optimistic About Deal on Russia
https://www.youtube.com/watch?v=SROpXnufc9A
ee on Thu, 23rd May 2024 12:38 pm
I know you lost and we have won. I know you are scared. Look at black women hand on the right at 2:26.
https://www.youtube.com/watch?v=8NPAKeoxfK8
You are scared, the only thing you have left is fake CGI because you cannot access earth calculators to refill natural resources. Youi are just a fucking loser without any real powers. I piss and shit on you.
ee on Thu, 23rd May 2024 1:03 pm
RECORD MAY COLD HITS SOUTH AUSTRALIA; LATEST SNOWFALL IN DECADES AT SNOQUALMIE; “UK’S WET WINTER MADE 10X MORE LIKELY BY CLIMATE CHANGE”; NASA HAS A NEW AI-DRIVEN CLIMATE MODELING TOOL; + SOLAR QUIET
We have the population of planet earth by the balls. We are going to throw you all against the wall over and over until you all die.
You are just fucking losers.
ee on Thu, 23rd May 2024 1:58 pm
You are really just a bunch of loser not worth my time.
eee on Thu, 23rd May 2024 2:03 pm
You made a big mistake with your restrictive handguns laws. I will kill you all just for that.
ee on Thu, 23rd May 2024 2:09 pm
You made the mistake of choosing safety over freedom. You are unworthy of leaving earth just for that reason alone. You don’t have what it takes to travel other realities where safety is not available you will be killed and we will move to something else. You chose safety, you will die on earth like the losers you all are.
ee on Thu, 23rd May 2024 2:15 pm
You don’t have what it take to travel space and time. You failed your fucking test. You die here like the fucking coward you all are.
ee on Thu, 23rd May 2024 2:44 pm
The population of earth is simply too heavily mentally retarded. You don’t have IQ required for time travel, space travel, dimensional travel.
On top of being mentally retarded, you are fucking coward, look at your handguns laws, police forces system and justice system. You are just a bunch of mentally retarded coward. You die here like the fucking losers that you are.
eed on Thu, 23rd May 2024 2:51 pm
On top of that the earth population lack advanced applied mathematical knowledge. You cannot do time, space and dimensional travel without advance applied mathematical knowledge.
You lack courage (firearms laws), you lack intelligence (you are heavily mentally retarded), you lack advanced applied mathematical knowledge. You are fucking losers basically. You will die like losers here.
ee on Thu, 23rd May 2024 3:18 pm
We are not going to refill earth with natural resources to keep earth civilization going on a little bit longer. Your time has expired. We will allow exceptional individua a chance to leave earth and the rest of you, will be killed.
ee on Thu, 23rd May 2024 5:58 pm
Your time has expired and changing the firearms laws will not allow you to leave earth. You should have changed the firearms laws when I asked you. You will stay here on earth and die on earth because you are losers.
The people that have been chosen to leave earth probably know already. Just be looking at changes on your forearms skin you know something will happen eventually. The doors to leave earth have been closed and your stuck here.
ee on Thu, 23rd May 2024 9:36 pm
I did not look at the video. Just the title.
‘White privilege’: The View host claims WNBA star is popular because of skin colour
https://www.youtube.com/watch?v=SYy5fO6vkJ4
Your video title has the stench of loserness associated with it. It feels like you are desperate and you have lost control of the situation and narrative. It looks like you are running out of ideas. It feels like you know deep inside you lost and we won already.
I told you, you are not leaving earth, you don’t have the minimal requirements for that, you lack courage, intelligence and the advanced applied mathematical knowledge.
WHY elite whitey supertard president GRETA has grown two enormous global warming SPHERES on Thu, 23rd May 2024 10:43 pm
does she want us to pay more taxes???
ee on Thu, 23rd May 2024 11:30 pm
Le ministère de la Sécurité publique ne s’entend pas avec le SPVM sur le nombre
https://www.youtube.com/watch?v=2Euz2gKsqI4
You behave like fucking loser. See above. You know you cannot leave earth because you don’t meet the minimal criteria to leave. You are just fucking losers and you will die here. Stop humiliating yourself with this shit media theater.
ee on Thu, 23rd May 2024 11:32 pm
It is becoming more and more obvious that we have won the war and you have lost the war. Stop humiliating yourself with your cheap theater.
ee on Thu, 23rd May 2024 11:59 pm
GOD you are suck a fucking losers. You cannot stop humiliate yourself with your crappy. I saw this and I knew that we won the war.
Israel to Expand Rafah Campaign After 1 Million Civilians Moved
https://www.youtube.com/watch?v=3ffGWH-mmy8
ee on Fri, 24th May 2024 12:00 am
GOD you are such a fucking losers. You cannot stop humiliate yourself with your crappy theater. I saw this and I knew that we won the war.
ee on Fri, 24th May 2024 8:00 am
Stop humiliating yourself with these kind of headlines:
Americans arrested in Turks and Caicos on ammunition charges
https://www.youtube.com/watch?v=hnf7o0NXXuU
You look like losers desperate for attention, I am talking to you the cabal controlling the world, not the people in the video. Pretty obvious that we have won and earth population and the cabal are just losers.
ee on Fri, 24th May 2024 8:12 am
Fucking worthless losers. You dump a guy in an environment where only the langage of lies is spoken and you don’t put in place a procedure of validation and identification to communicate with this guy. Of course the guy will reject any messages received. Of course it will failed and it has failed.
ee on Fri, 24th May 2024 8:14 am
I piss and shit on the whole population of earth.
ee on Fri, 24th May 2024 8:19 am
This is what I mean, stop humiliating yourself.
Canada to reinstate citizenship rights to “lost Canadians”
https://www.youtube.com/watch?v=dbLzfRaxYKc
It is so fucking obvious we won the war against planet earth.
ee on Fri, 24th May 2024 8:35 am
It is pretty obvious as time goes on that we won the war against planet earth and its inhabitants. You fucking lost.
ee on Fri, 24th May 2024 8:45 am
In case you did not know we were at war with planet earth and its inhabitants. It is pretty obvious we are the winner of the war.
ee on Fri, 24th May 2024 8:48 am
We are about to enter the last phase of the war. The permanent shutdown of earth electrical grid and the dead of everyone. Fuck we are good.
ee on Fri, 24th May 2024 8:52 am
Yew we won the war. Mexico will elect a Juil prime minister. We won the fucking war. I can smell your desperation.
Le 2 juin, la population mexicaine se rend aux urnes pour élire le ou la prochaine cheffe de l’État. Selon toute vraisemblance, la personne qui succèdera à “AMLO”, le président Andrès Manuel Lopez Obrador, sera sa dauphine au sein du parti de gauche Morena, Claudia Sheinbaum.
https://www.youtube.com/watch?v=2SeW9jNkrtU
It is over for earth. We won the war against earth.
ee on Fri, 24th May 2024 8:53 am
Yes we won the war. Mexico will elect a Jew prime minister. We won the fucking war. I can smell your desperation.