In its annual World Oil Outlook, OPEC acknowledged that more electric vehicles on the road and the promotion of alternative and renewable energy will indeed usher in an era of declining oil demand in rich countries.
But the energy needs of expanding economies in other parts of the world mean that oil will be the world’s largest source of energy until 2045, OPEC said Tuesday.
OPEC’s long-term report comes as economies emerge from the most severe economic shocks of the global pandemic, booming supply lines and creating tight supplies of almost everything, including oil.
Brent crude hit $ 80 a barrel on Tuesday, while benchmark U.S. oil crude was not far behind, both hitting three-year highs. Hurricane Ida struck a critical port that serves as the primary support center for the deepwater oil and gas industry in the Gulf of Mexico in the United States, worsening the supply situation, at least temporarily.
The average U.S. gasoline price rose again over the weekend, according to Lundberg’s survey, and now costs $ 1 more per gallon than around this time last year.
After being stung by deep cuts in production in 2020 at the height of the pandemic, OPEC has slowly increased production.
“What is clear from this year’s WOO is that the demand for energy and oil increased dramatically in 2021, after the massive drop in 2020, and continued expansion is expected in the longer term,” he said. declared OPEC. “Global primary energy demand is expected to increase by 28% between 2020 and 2045, with all the energies needed, driven by an expected doubling in the size of the global economy and the addition of around 1.7 billion people in the world by 2045. ”
Only coal will be used less, while other energy sources will see increasing demand, although the share will shift to include a larger proportion for renewables, nuclear and natural gas, according to the group.
The 340-page report sketches a future of declining demand for oil in wealthier countries that belong to the 38-member Organization for Economic Development and Cooperation, as efforts to tackle climate change take shape renewable energies and alternative fuels in cars, planes and boats. It predicts that the global car fleet will grow from 1.1 billion to 2.6 billion by the end of the reporting period in 2045 – and that 500 million of them would be electric, or 20% of all vehicles.
But population growth and the expansion of the middle classes across the rest of the world, including China and India, will lead to an increase in oil demand between 2020 and 2045, although much of that increase takes place in the region. beginning of this period, according to the report, produced by OPEC. secretariat in Vienna, said.
Oil will meet 28.1% of global energy demand by 2045, against 30% in 2020, but ahead of natural gas with 24.4% and coal with 17.4%. Hydroelectric, nuclear and biomass energy sources and other renewable energies such as wind and solar make up the rest.
One of the main reasons given for the decline in energy consumption in more developed countries was demographics: shrinking and aging populations that lead to lower economic growth.
The report notes that growing awareness of the need to accelerate actions to tackle climate change has led to ambitious new policy intentions to achieve net zero emissions by 2050. European Union, United States, Japan, UK, Canada and Brazil have proposed roadmaps to achieve new goals.
This month, US President Joe Biden signed an executive order setting a zero-emission vehicle target to account for half of all automobiles sold in the United States by 2030.
OPEC, however, noted “considerable doubts as to whether all of these ambitious climate mitigation commitments will be met within the proposed time frame.” For example, the European Union announced in July its Fit for 55 package, in which the bloc of 27 countries pledged to reduce emissions by 55% from 1990 levels by 2030. OPEC has said the plan “remains exactly that for now, a plan, which has yet to be negotiated and approved by all EU member states, leaving plenty of room for exceptions and dilution.”
The UK will host the 26th United Nations Climate Change Conference from October 31 to November 31. 12 in Glasgow, Scotland, where national leaders will look for ways to cut greenhouse gas emissions and limit the rise in global temperatures.