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Why the World’s Appetite for Oil Will Peak Soon
Amy Myers Jaffe, Wall Street Journal
The conventional wisdom about steadily rising demand is wrong. Within two decades, global oil use will start to fall.
When it comes to oil demand, the conventional wisdom is clear: Population growth and a rising global middle class guarantee that demand—and prices—will rise over the coming decades. It is a story line that is almost universally accepted by investors, governments and industry alike.
But like many such consensus views, it is one that should be treated with caution.
The world’s economy is experiencing transformational changes that, I believe, will dramatically alter patterns of energy use over the next 20 years. Exponential gains in industrial productivity, software-assisted logistics, rapid urbanization, increased political turmoil in key regions of the developing world, and large bets on renewable energy are among the many factors that will combine to slow the previous breakneck growth for oil.
The result, in my opinion, is as startling as it is world-changing: Global oil demand will peak within the next two decades.
… Signs of change are already apparent. Most everyone agrees, for instance, that a combination of policy inducements, energy taxes and technological breakthroughs has resulted in a peak in oil demand in the largest industrialized economies.
… ([The author] Ms. Jaffe is executive director of energy and sustainability at the University of California, Davis, and chairwoman of the Future of Oil and Gas for the World Economic Forum.)
(5 May 2015)
Tis an outcome devoutly to be wished. You might want to read this article before it goes behind the WSJ paywall. -BA
Oil Nations See Chance to Reduce Domestic Fuel Subsidies
Benoît Faucon and Summer Said, Wall Street Journal
The extended decline in oil prices makes cuts in aid more politically palatable
… In the Middle East, the United Arab Emirates is considering reducing its fuel subsidies, much of which benefit the country’s massive expatriate population.
“Subsidies encourage the waste of energy, and we [Gulf countries] need to work on that,” Suhail al-Mazrouei, the U.A.E. oil minister, said in Bahrain in March.
According to the U.S. Energy Information Administration, the UAE’s oil consumption has risen nearly 10 times over the past three decades—and now stands at 20% of its output.
(5 May 2015)
Also in the WSJ: Saudis Take Steps to Curb Oil Consumption.
Photo: Aerial view of Energiepark Morbach (photovoltaics and wind turbines), near Morbach, Bernkastel-Wittlich, Rhineland-Palatinate, Germany. Photo by Toksave. Source: Wikimedia Commons.