For many years there has been talk of “peak oil”, the point at which rising world oil consumption would peak and then start declining. Some analysts have been predicting that this could happen by the 2030s. But the coronavirus pandemic drove a 9% slump in oil demand in 2020 that some economists are saying might never be entirely reversed.
There are three major forces driving down the world’s appetite for oil: decarbonization of economies to meet the goals of the Paris climate agreement, declining demand for oil as renewable energy sources and electric vehicles are increasingly adopted, and detoxification as cities act to curb particulates and emissions from burning petroleum.
The largest single factor is electric vehicles. Automobiles currently consume almost half of the world’s oil. As of the end of 2020, there were an estimated 10 million electric cars as well as more than 600,000 electric buses and trucks. This is still less than 1% of all vehicles, but 5% of all new cars being bought are now electric and the number is growing rapidly. Experts estimate that nearly a quarter of global car sales will be electric vehicles by 2025 and many car manufacturers are promising to sell only electric cars within the next 10 years.
The decline in oil demand is pretty much inevitable at this point. The main question is how quickly it will happen. Road transport makes up 48% of global oil demand, petrochemicals account for 14%, aviation 7%, and shipping 6%. Ultimately all these things are likely to diminish over time.
Only time will tell, but the long-awaited arrival of peak oil may already have happened.
Amid Troubles for Fossil Fuels, Has the Era of ‘Peak Oil’ Arrived?
Photo, posted April 14, 2019, courtesy of Tony Webster via Flickr.
Earth Wise is a production of WAMC Northeast Public Radio.
Leave a Reply