Global gasoline demand set to peak in 2030 as more EVs take to the road, says Wood Mackenzie
Energize Weekly, October 25, 2017
Global demand for gasoline will peak in 2030, followed five years later by oil reaching its maximum worldwide consumption, according to an analysis by Wood Mackenzie, the global energy and commodities consultant.
Peak oil demand has been a rolling phenomenon in the developed world with Japanese consumption topping out in 2000, followed by Germany, Italy and France. The United States reached its peak in 2005.
Low oil prices have stimulated demand. Nevertheless, Wood Mackenzie projects that by 2035, the 35 developed countries in the Organization of Economic Cooperation and Development (OECD) will be consuming four million fewer barrels of oil a day than today.
The OECD countries use about 53 percent of the 96 million barrels consumed daily across the world, according to the International Energy Agency.
“Overall, the signs of peak oil demand are really there into the future. It is a question of when, not if,” Ed Rawles, head of Wood Mackenzie oil research, said in a video interview. “So the oil industry as a whole has a right to be concerned.”
Gasoline consumption is set to peak in 2030 largely due to the growth in electric vehicles (EVs). There are two to three million EVs on the roads, Wood Mackenzie projects that growing to 115 million vehicles by 2035.
More than 60 percent of the 96 million barrels of oil consumed globally each day are used in transport. While gasoline demand will decline, that will be offset to some extent by an increase in fuel demand from freight and air travel.
Rawles said that EVs would reduce oil demand globally by less than two million barrels a day, but this will be coupled with increasing mileage efficiency of internal-combustion-engine vehicles.
Europe, China and the U.S. will remain the largest markets for EVs, with each American EV having a bigger impact on oil demand since Americans drive longer distances and have less fuel-efficient cars, according to Woods Mackenzie.
Over the next 20 years, there will be growing oil demand in the developing world. Wood Mackenzie puts it at an additional 16 million barrels a day by 2035.
There will also be growth in the petrochemical sector. Petrochemical feedstocks make up about 12 percent of the barrel, and Woods Mackenzie projects “significant growth,” reaching an additional six million barrels a day by 2035.
After 2035, the chances for growth are limited. “The prospect of peak oil demand is very real,” according to the Wood Mackenzie analysis. “The industry needs to start planning now if it is to be prepared for what lies ahead.”
Not everyone agrees.
On Oct. 19, Mohammed Sanusi Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC), in a speech in London, said the group’s projections for oil consumption are for it to pass 110 million barrels a day in 2020 and reach 111 million barrels a day in 2040. “There is no peak oil demand for the foreseeable future,” Barkindo said.