To set us on a trajectory aligned with zero net emissions, global demand for oil must fall by 70% by half a century. The peak will come soon and also with the current policies, driven mainly by the transformation of the transport sector. But the difference between a business as usual scenario and a more ambitious one is significant
BP’s Energy Outlook predicts oil peak for China only after 2030
The peak of oil will already reach 2025, 102 million barrels of oil a day. Both in a scenario based on today’s policies, and in one that includes further measures to cut emissions. In the first case, however, in half a century, we will fall just below the 80 million barrels of oil. In the second, which reflects the net zero emission trajectory, world demand for crude will drop below 30 million barrels of oil, a decrease of more than 70% from today. However, oil will continue to play a central role in the global energy landscape, at least until 2035. This is stated in British Petroleum’s annual Energy Outlook report (BP).
The factors behind the peak of oil
What will bend the oil curve down? The oil company argues that the main factor for reducing consumption will be the decline in the use of crude in road transport. That, in turn, is driven by improvements in fleet efficiency, the progressive penetration of alternative fuels, and the electrification of private and heavy vehicles.
One of the discriminatory factors, in determining the trajectory, would be the global ban on single-use plastics and the increase in recycling rates. The peak of oil, in fact, will be accompanied by an increase in the use of crude oil in the petrochemical sector. The transformation of transport alone will, therefore, not be enough for substantial reductions.
However, what BP predicts as the date of the global peak of oil is an average value that hides profound differences between countries. The advanced economies will continue the trend of rapid decline, moving from the current 45 mnl barrels of oil to 20/7mrd barrels of oil in 2050, depending on the scenario. On the contrary, China will continue to increase crude consumption until the early 1930s. For Beijing, too, the turning point will come mainly thanks to the expansion of electric cars. For other major emerging economies, on the other hand, the curve will rise until the middle of the next decade and then become flat, without substantially falling.
Gas will expand again
On the contrary, the gas curve is expected to be in full expansion, at least with current policies: By 2050, global volumes will be 20% higher than in 2022, especially for demand generated in emerging economies, on which 50% of this growth depends. For China, the trajectory is expected to rise but only until 2040, when it will reach a plateau. However, volumes are about 30% higher than today.
On the contrary, a scenario aligned with zero net emissions requires gas to reach its global peak by the middle of this decade and decline decisively. By 2050, global gas volumes will be 50% lower than today. And 80% of the consumption should include CO2 capture and storage technologies.
The curve of liquefied natural gas (GNL) is constantly expanding in every scenario. The boost of these years will continue for at least the entire decade. With a similar trend, the current policies will grow by 40% from the levels of 2022, and appropriate net zero policies will increase by 30%.
Read here BP’s Energy Outlook 2024
