mand is actually possible. Granted, three millennia after the
end of the Bronze Age, we still use large amounts of copper
(not so much for weapons anymore), but coal is rarely used to
heat homes in developed nations despite its abundance.
On the other hand, there is no doubt but that many of those
touting peak oil demand do so because it suits their particular
ideology. It is amusing to see Thinkprogress.org’s Joseph Romm
confidently argue for an early peak for oil demand, since a few
short years ago he was similarly secure in the belief that peak
oil supply was imminent, as witness his 2009 comments “…I
have blogged endlessly on the painfully obvious reality that we
are at or near the peak oil supply.” Now, he admits, “The idea
of peak oil supply…is dead.”
This demonstrates once again how many pundits adopt a
stance and cherry pick some data or citations to support their
views without actually knowing much about the situation.
Consumer (of punditry) beware.
The primary two arguments supporting the case of peak oil
demand are that climate change policies and the technological
revolution in transportation will act to suppress demand. There
is an obvious overlap between the two.
The Carbon Tracker Initiative has argued that, generally speaking, 80% of current fossil fuel reserves cannot be consumed
between now and 2050 if the world is to meet the 2 degrees
Celsius increase ceiling. Clearly, this is aspirational rather than
analytical. The Kyoto Accords were greeted with great fanfare,
yet only 50% of the targets have been met.
And the presumption restricting fossil fuel consumption
will be the only policy is obviously flawed. Although most forms
of carbon sequestration are currently uneconomic, in the future
it might prove as viable as, say, electric vehicles. Similarly,
geoengineering holds significant potential, with some approaches already appearing to be economically viable.
And the impact on oil demand appears to be exaggerated.
Studies of necessary GHG reductions such as the IEA’s see as
little as 18% coming from the transportation sector, with 53%
from power generation and buildings, where oil is not usually
a major component of demand. And finally, since electric vehicles are a particularly expensive way of reducing GHG emissions, a reduction in support for electric vehicles is quite likely,
rather as Spain, Germany, Japan and others have curtailed financial support for expensive renewable energy.
Technology clearly appears to be advancing rapidly, particularly
in the fields of electronics, and many activists others are embracing it as the solution to climate change. The main impact
on oil demand would be from lithium-ion battery progress, but
ride-sharing and biofuels appeal to some as potential
game-changes that could affect oil demand.
For biofuels, it is simply enough to note that for 20 years,
promises of imminent breakthroughs have not been fulfilled,
and while some great advance could occur at any time, the
odds suggest that there will be no major change in production
costs in the next decade. Indeed, as a Newsweek article put it,
“several major companies including Shell and ExxonMobil are
seemingly abandoning their investments in this environmen-
tally friendly fuel.” Jatropha, seen a decade ago as a source of
biodiesel, has been largely abandoned and U.S. cellulosic ethanol
production, hailed as a savior by Richard Lugar James Woolsley
two decades ago, remains at roughly 1 tb/d or 0.1% of ethanol
Autonomous vehicles could progress rapidly into the market,
but are more likely to increase vehicle-miles-traveled rather
decrease them. Ride-sharing has great appeal for technophiles,
but the evidence that it will change vehicle ownership, let alone
the type of propulsion, is minimal. Groups like Re ThinkX, who
argue that private vehicle ownership will plummet in the next
decade, sales falling to zero by 2024, appear to be wildly opti-
mistic given that large cities like New York and Tokyo with
expensive parking and insurance and dense mass transit and
taxi systems still have high levels of car ownership, roughly
one per two households, demonstrating there is a significant
consumer demand for the convenience of car ownership.
While ride-sharing of autonomous battery electric vehicles
will probably grow in major urban centers, the market pene-
tration in the US as a whole seems unlikely to be significant
for at least a decade. Further, the more ready availability of
transport might mean an increase in miles traveled, rather
than a decrease.
Battery electric vehicles (BEVs) get the most attention as a
technology with the potential to suppress petroleum demand.
Already, there are roughly two million BEVs in use and sales
have been growing exponentially. As Table 1 shows, a number
of groups have projected that BEVs will be competitive with
conventional vehicles within the next decade, based on their
projections of falling costs for lithium-ion batteries.
Of course, there have been many previous instances where
electric vehicles were touted as on the verge of acceptance
T1: PREDICTIONS OF PARITY BETWEEN BEVS AND ICES
reached Published Source Where
2012 McKinsey 250 <2020 —
2015 Nyqvist 150 2025-2030 —
2016 UBS 160 2021 Europe
2016 UBS 160 2025 China
2017 UBS — 2018 Europe
2017 UBS — 2021 China
2017 UBS — 2025 US
2017 BP 50-150 2025-2035 —
2017 Carbon-Tracker 150-300 2020 —
2017 BNEF — 2025 —
2017 Statoil — 2025 —