Our directory of things of interest

University Directory

Twin Peaks: could demand for oil fall?

  • Written by  Marco Magrini
  • Published in Energy
Twin Peaks: could demand for oil fall? Jan Faukner
26 Nov
2016
Geographical’s regular look at the world of climate change. This month, Marco Magrini looks back at ‘Peak Oil’

Do you remember Peak Oil? The theory maintained that oil production was about to reach a plateau followed by a permanent state of decline, with spiralling barrel prices and frightening shortages at the pump. The idea had geological and statistical foundations, yet failed to take technological evolution into account, as oil companies managed to tap into shale oil, tar sands and ultra-deepwater oil fields. Now, there is some evidence that the world may be heading in the opposite direction, towards a ‘reverse Peak Oil’. Not a plateauing in supply, but rather a tapering off in demand. ‘Demand for oil in the early 2020s,’ Statoil’s CEO Eldar Sætre said a few weeks ago, ‘can reach a peak and start to slow down. After that we will see a shrinking oil industry.’ Why? Because the electric car revolution is about to take off.

With 1.2 million electric vehicles roaming the planet’s roads, being just 0.1 per cent of the world’s fleet and displacing a mere 0.01 per cent of oil consumption, the forecast may seem a tad bold. Yet, something is happening. According to the International Energy Agency, an impressive 153 gigawatts of clean electricity was installed in 2015, with 500,000 solar panels deployed every day and two wind turbines coming online every hour.

The journey from a scary supply-side Peak Oil to a greener demand-driven Peak Oil has begun

In the same year, regardless of the low price of oil, electric car sales rose by a solid 60 per cent. Assuming such a growth rate goes on unabated for another eight years, at that point it could displace two million barrels of oil per day. The latest oil glut, with prices falling as low as $30, was triggered by a two million barrel surplus. Only time could prove Mr Sætre right. In the next two years Tesla, Chevrolet and Nissan are all expected to debut $30,000 electric cars. Many others will follow.

This is not to say the planet is about to stop relying on oil; our desperate need for energy will make hydrocarbons crucial for decades to come. Worth $1,720billion, the crude market is bigger than all raw metal markets combined. Oil makes the world go round (and the atmosphere hot), yet its geopolitical entanglements, and its dependency on the speculative futures markets’ gyrations, make room for plenty of surprises. The journey from a scary supply-side Peak Oil to a greener demand-driven Peak Oil, has begun.

This was published in the December 2016 edition of Geographical magazine.

Related items

Subscribe and Save!

geo line break v3

Free eBooks - Geographical Newsletter

Sign up for our weekly newsletter today and get a FREE eBook collection!

geo line break v3

University of Winchester

geo line break v3

EDUCATION PARTNERS

Aberystwyth University University of Greenwich The University of Derby

TRAVEL PARTNERS

Ponant

Silversea

Travel the Unknown

NEVER MISS A STORY - Follow Geographical on Social

Want to stay up to date with breaking Geographical stories? Join the thousands following us on Twitter, Facebook and Instagram and stay informed about the world.

More articles in NATURE...

Geophoto

The prestigious photography awards to go on display in some…

Tectonics

The discovery of a slow-motion earthquake near Istanbul, which took…

Oceans

The 2014 to 2016 marine heatwave, which took place off…

Climate

Marco Magrini discovers that hydrogen is back, but hopefully not…

Wildlife

 A ten-year analysis of chimpanzees has revealed that the presence…

Wildlife

The return of the pine marten to UK forests has…

Energy

A project in Orkney is converting excess wind energy into…

Geophoto

Mountains provide a dramatic sight at the best of times,…

Wildlife

A surge in reports of dead hares has resulted in…

Oceans

Four scientists have banded together to make the case against the farming of octopuses, arguing…

Climate

As planetary oil consumption hits the 100-million-barrel mark Marco Magrini…

Oceans

A ship that ran aground early in February has been…

Wildlife

Two whale populations on either side of the African continent…

Geophoto

March traditionally heralds the beginning of spring, a time of…

Wildlife

An innovative project to utilise Laos’ elephant experts in service…

Polar

Despite common belief that Antarctica is vastly uninhabited, humans are…

Wildlife

Javan rhinos survived the recent Krakatoa tsunami, but the species…

Energy

As the world turns away from fossil fuels, one question…

Geophoto

The winners of the Outdoor Photographer of the Year 2018…

Climate

New legislation in Florida aims to solve various environmental issues,…