Peak crude demand is fueling anger and argument in the world of oil
An off-shore oil platform off the coast in Huntington Beach, California on April 5, 2020.
Leonard Ortiz | MediaNews Group | Orange County Register | Getty Images
It’s been a war of words and numbers between two major players in the energy industry – the International Energy Agency and OPEC – as they spar over the future of something crucial to crude producers’ survival: peak oil demand.
Peak oil demand refers to the point in time when the highest level of global crude demand is reached, which will be immediately followed by a permanent decline. This would theoretically decrease the need for investments in crude oil projects and make them less economical as other energy sources take over.
For oil producing countries and companies, it’s existential.
That’s why when the chief of the IEA, an intergovernmental organization that advocates for oil consuming countries, predicted that peak oil demand would be reached by 2030 and hailed the decline of crude as a “welcome sight,” OPEC was furious.
“Such narratives only set the global energy system up to fail spectacularly,” OPEC Secretary General Haitham al-Ghais said in a Sept. 14 statement. “It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world.” He accused the agency of fear-mongering and risking the destabilization of the global economy.
More broadly, the spat reflects the ongoing clash between climate change concerns and the need for energy security. That juxtaposition was on full display at ADIPEC – the annual gathering whose name stood for Abu Dhabi International Petroleum Exhibition Conference until this year, when it was quietly changed to Abu Dhabi International Progressive Energy Conference.
The United Arab Emirates will be hosting the COP28 climate summit in November and has been marketing its sustainability campaigns, all the while ramping up its crude production capacity in preparation for what it expects to be a growth in future demand. The UAE is OPEC’s third-largest oil producer.
CEOs of oil majors and state oil producers stressed the need for a dual approach, insisting their companies were part of the solution, not the problem, and that an energy transition is not possible without the security and economic support of the hydrocarbons sector.
“I don’t know if we’re going to have peak oil in 2030. But it’s very dangerous to say that we have to reduce investment because that is against the transition,” Claudio Descalzi, CEO of Italian multinational energy company Eni, said Monday during a panel hosted by CNBC’s Steve Sedgwick.
He warned that if oil investment – and therefore supply – drops and fails to meet demand, prices will surge, crippling the economy.
Descalzi acknowledged that burning fossil fuels “is producing lots of CO2,” but added “we cannot shut down everything and rely just on renewables and that is the future, no. It’s not like that. We have infrastructure, we have investment that we have to recover and we have the demand that is still there.”
The IEA wrote in its Aug. 2023 report that “world oil demand is scaling record highs” and is set to expand this year, but added that faster adoption of electric vehicles and renewable power, as well as the West’s decoupling from Russian gas, will hasten peak demand before 2030.
“Based on current government policies and market trends, global oil demand will rise by 6% between 2022 and 2028 to reach 105.7 million barrels per day (mb/d) … Despite this cumulative increase, annual demand growth is expected to shrivel from 2.4 mb/d this year to just 0.4 mb/d in 2028, putting a peak in demand in sight,” the agency wrote in a June 2023 report.
The IEA also outlined its roadmap for Net Zero by 2050, calculating that worldwide oil demand would need to fall to 77 million barrels per day by 2030 and 24 million barrels per day by 2050.
But those figures are staggering when confronted in real-world terms: during the most intense global lockdown period of the Covid-19 pandemic, in March and April of 2020, worldwide daily oil demand was slashed by 20% – something only possible because the economy came to a near-complete standstill. The IEA’s roadmap calls for daily oil demand to be slashed by 25% in seven years’ time.
‘We all strive for the same thing’
OPEC leaders, meanwhile, point to continuing yearly increases in oil demand, particularly from major emerging markets like China and India.
But such a challenge shouldn’t distract from the immense damage to come if no action is taken, climate scientists warn. The U.N. Intergovernmental Panel on Climate Change concludes that fossil fuel emissions must halve within the next decade if global warming is to be contained to 1.5 degrees Celsius above pre-industrial levels. And according to the panel, roughly 90% of global CO2 emissions come from fossil fuels and the heavy industry.
Thus continues the tug-of-war between climate action advocates and the hydrocarbons industry, despite some calls by the latter that they should work together. Oil companies have also been accused of dialing back their climate pledges in recent months following record annual profits.
Speaking to CNBC’s Dan Murphy at ADIPEC, OPEC’s al-Ghais appeared to temper his response to the IEA’s latest forecast figures.
“We respect the IEA fully, of course,” he said Monday. “What we believe in is that we cannot just replace the energy system that has existed for so many years, over a decade or even two. And that’s why we continue to emphasize the importance of investing in oil, as well as investing in renewable energy, hydrogen.”
“And the important thing is the technologies,” al-Ghais added, “because ultimately, we all strive for the same thing, which is meeting the Paris Agreement objectives” of limiting the Earth’s temperature increase to 1.5 degrees Celsius.
That desire is likely to be tested at COP28 when world leaders again convene in the UAE in November to publish a joint communique on climate action.
British Columbia got its first 400 kW DC fast charger last week at Canadian C-store chain On The Run, but that’s not the good part. As part of a limited time offer, these chargers are FREE!
The Canadian convenience store chain just took the wraps off its new, ABB-developed, 400 kW chargers earlier this month, but they’re already planning to bring the ultra-fast 400 kW dispensers to at least four more locations in BC this spring, and have them online just in time for the summer road trip season – something On The Run hopes its customers will appreciate.
“The A400 charger delivers an enhanced customer experience, with reliability and performance from a 32-inch screen to higher power charging sessions and power sharing,” reads the company’s official announcement, via LinkedIn. “Download the Journie Rewards app to start the charge – free for a limited time.”
On The Run’s new 400 kW ABB DC fast chargers are compatible with CCS and CHAdeMO plugs, and can accommodate Tesla and other NACS-equipped vehicles with an adapter. That said, the company seems to imply that Tesla drivers in particular will have a maximum charging speed of “just” 50 kW, which feel hilarious (given the current state of affairs between Tesla and the Canadian government), but probably isn’t.
In addition to the ABB A400 400 kW units shown here, On The Run locations also employ the ABB Terra 184 dispensers rated at 180 kW. On The Run plans similar deployments at the four BC locations mentioned above, as well as two more each in Quebec and Ontario slated to go live towards the end of this year.
Electrek’s Take
Tesla’s controversial CEO Elon Musk once mocked 350 kW charging speed as being “for a child’s toy,” despite the fact that, nearly nine years later, his own cars and Superchargers can barely make it to 325 kW while others have sailed right on past. I made fun of that fact on the Quick Charge episode shown, above – and, while I do think it’s funny and relevant, the much more relevant piece of news here is that companies like BP Pulse, Revel, and Wallbox are actively deploying 400 kW solutions, today (while others hit the same mark as far back as 2017).
It’s just a fact: Tesla has fallen way behind.
SOURCE | IMAGES: On The Run, via Electric Autonomy.
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Terawatt Infrastructure‘s first medium- and heavy-duty electric charging truck stop in California is now online, in Rancho Dominguez.
Located 12 miles north of the ports of Long Beach and Los Angeles, the private Rancho Dominguez site, which is shared among multiple fleets, will support electric trucking fleet operations in and out of the largest container ports in the US.
First customers include Dreaded Trucking, Hight Logistics, PepsiCo, Quick Container Drayage, Southern Counties Express, Tradelink Transport, and WestCoast Trucking & Warehousing.
Terawatt’s electric charging truck stop features 20 pull-through and bobtail DC fast charging stalls with a capacity of 7 megawatts (MW), enabling charging for up to 125 trucks per day using a simple reservations system. Terawatt’s site features a proprietary charge management system, in-house technicians, 24/7 customer service, and onsite parts management.
“This launch underscores growing collaboration between enterprises, shippers, carriers, and charging infrastructure providers to advance sustainable technologies across logistics and transportation operations, especially in the medium and heavy-duty sectors,” said Neha Palmer, CEO and cofounder of Terawatt. Palmer added that the company will bring another charging site online in Rialto, California, in June.
Terawatt joined some of the world’s largest shippers and carriers in September 2024 to launch the I-10 Consortium heavy-duty EV operations pilot, the “first-ever US over-the-road electrified corridor.” Terawatt is providing charging infrastructure, including software, operations, and maintenance support at six of its owned charging hubs along the I-10 corridor.
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
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In its most aggressive attack against offshore wind yet, the Trump administration halted the $5 billion Empire Wind 1, already under construction off New York’s coast.
Norwegian developer Equinor announced yesterday that it received notice from the Bureau of Ocean Energy Management (BOEM) ordering Empire Wind 1 to halt all activities on the outer continental shelf until BOEM has completed its review. Interior Secretary Doug Burgum posted this tweet yesterday:
Burgum gave no indication of what insufficiencies there were in the approval process for the fully permitted offshore wind project, despite Trump’s recent declaration of a national energy emergency that speeds up permitting processes.
The commercial lease for the 810-megawatt (MW) Empire Wind 1’s federal offshore wind area was signed in March 2017 during the first Trump administration. It was approved by the Biden administration in November 2023 and began construction in 2024.
The project is being developed under contract with the New York State Energy Research and Development Authority (NYSERDA). Empire Wind 1, which was due to come online in 2027, has the potential to power 500,000 New York homes.
“Halting construction of fully permitted energy projects is the literal opposite of an energy abundance agenda,” said American Clean Power Association CEO Jason Grumet in a statement. “We encourage the administration to quickly address perceived inadequacies in the prior permit approvals so that this project can complete construction and bring much-needed power to the grid.”
As Electrek reported, Equinor secured $3 billion to finance Empire Wind 1 in January. The total amount drawn under the project finance term loan facility as of March 31 was around $1.5 billion.
As of March 31, Empire Wind has a gross book value of around $2.5 billion, including South Brooklyn Marine Terminal (pictured above), which was expected to become the US’s largest dedicated port facility for offshore wind.
In response to BOEM’s stop work order, New York Governor Kathy Hochul issued the following statement:
Every single day, I’m working to make energy more affordable, reliable and abundant in New York and the federal government should be supporting those efforts rather than undermining them. Empire Wind 1 is already employing hundreds of New Yorkers, including 1,000 good-paying union jobs as part of a growing sector that has already spurred significant economic development and private investment throughout the state and beyond.
As Governor, I will not allow this federal overreach to stand. I will fight this every step of the way to protect union jobs, affordable energy and New York’s economic future.
Equinor says it’s considering appealing BOEM’s order.
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Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
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