A new study into ‘peak oil’ will question whether the theory should really be about ‘peak oil demand’ rather than supply. As concerns about climate change, energy security and oil price volatility coupled with advances in low carbon technology could mean that demand for oil peaks before the world’s capacity to supply it does.
In a landmark multi-client research study, Ricardo Strategic Consulting and Kevin J. Lindemer LLC aim to assess the impact of these factors on the future trajectory of oil demand, to identify the likely tipping point when demand will start to turn down, and address the implications for energy producers, users, regulators and governments as the world starts beating its addiction to oil.
Proponents of the peak oil demand theory may well point to a rising global population and the increasing wealth and industrialisation of nations such as India and China to support the idea that the world faces a situation – possibly very soon – in which its capacity to produce oil hits a ceiling, demand subsequently having to adjust as supply begins to decline and alternatives to oil move into the market to fill the gap.
However driven by a number of growing concerns including the increasingly worrying geopolitics of oil, governments and industry are investing heavily to accelerate the development of low carbon technologies that aim to reduce, replace or obviate the use of fossil fuels in the energy mix.
With around half of global oil demand dependent on the internal combustion engine, radical technology changes in the automotive sector, an area in which engineering consultancy, Ricardo possesses world-renowned expertise, will be of particular significance.
Commenting on the announcement of this landmark project, Peter Hughes, Ricardo Strategic Consulting director and head of the Energy Practice, said: “Over the last few years a near ‘perfect storm’ for peak oil demand has been forming and gathering strength.
“The drivers working against oil demand growth are increasing in number and intensity while those drivers supporting future oil demand growth are either stable or declining in influence. With a peak in oil demand now in real prospect within the longer-term planning horizons of many organizations, we would suggest that there is an increasingly compelling case for the implications of such a scenario to be incorporated into strategic thought processes.”
The significance of this study is reflected in the list of highly influential companies and organizations that are already enrolled as participants, including OPEC, BHP Billiton, Statoil, Maersk, Lubrizol, Infineum and Fluor Corporation. The ground-breaking analysis and results of the study, expected to conclude later this year, will be shared with all such participants in a series of interactive workshops.
Ralph
The IEA has reported that global crude oil production peaked, permanently, in 2006. Peak (conventional) crude oil was 5 years ago.
The only increase in fuel since than has come from natural gas liquids , tar sands, coal to liquids, gas to liquids, and biofuels.
Even with this substitute supply, the world is burning a million barrels of oil more each day than is being pumped out the ground. The IEA is releasing oil and products from the OECD strategic reserves at the rate of 2 million barrels per day. The headline price of oil is $116 /barrel and showing no sign of falling (up from $20 in 10 years).
Increasing demand in China, India etc. has more than offset falling demand in OECD countries. Demand is exploding.
This report is not worth the electrons it was written with,
July 15, 2011
Spec
I hate, hate, HATE this stupid 'peak demand' meme. "Peak demand" is an inherent part of peak oil! Yes, if we had magical infinite money we could just throw more and more resources at drilling for oil even though it gets harder and harder to access. But we don't have magical infinite money. As oil gets harder and harder to access, the price goes up and that kills demand such that production peaks.
The only reason oil peaked in the USA back in the 70's is because people were not willing to pay $300/barrel for pure domestic oil. Instead, they (quite rationally) preferred $20/barrel imported oil. So should we say 'peak demand' caused the USA to hit peak oil.
"Peak demand" is merely sophistry used by people that can't admit they got the peak oil story wrong and thus are trying to say uh . . . see . . . peak oil didn't happen because we hit peak demand first. BUT THEY ARE THE SAME THING!
July 19, 2011