New projections from the International Energy Agency suggest global oil demand will peak this decade.
In a column for the Financial Times, the head of the IEA broke down the latest readings from the energy group.
“This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people had anticipated.”
The International Energy Agency’s latest projections suggest global demand for the three primary energy sources — oil, gas, and coal — will peak this decade.
In a Tuesday column published in the Financial Times, Fatih Birol, the executive director for the IEA, posited that “the age of seemingly relentless growth” for fossil fuel demand is at the beginning of the end. The energy group’s World Energy Outlook, to be released in October, points to an impending, historic turning point.
“Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years,” Birol wrote. “This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated.”
A peak in energy demand also means a peak in greenhouse gas emissions, the executive explained. The boom in clean energy technologies, including electric vehicles, will usher in a more energy-efficient era.
China, for one, has undergone structural shifts, with policymakers dedicating more resources to renewable and nuclear power. That, in addition to a slowing economy, point to softer coal demand for the world’s largest coal consumer, according to the IEA.
“The ‘Golden Age of Gas,’ which we called in 2011, is nearing an end, with demand in advanced economies set to fall away later this decade,” Birol said. “This is the result of renewables increasingly outmatching gas for producing electricity, the rise of heat pumps and Europe’s accelerated shift away from gas following Russia’s invasion of Ukraine.”
To be sure, the forecasted declines in oil, gas, and coal demand still won’t be enough to limit global warming to 1.5 degrees Celsius, in the IEA’s view. Obstacles remain, and governments will still have to push for more energy policy interventions.
Additionally, the declines in demand won’t be linear. Demand for fossil fuels could peak, structurally speaking, but there will still be spikes and plateaus on the way down, Birol said.
Meanwhile, last week Brent crude, the international oil benchmark, soared above $90 a barrel for the first time in 10 months. On Tuesday, it inched above $91 a barrel.