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article imageGlobal oil demand only to decline slowly despite more EVs

By Ken Hanly     Nov 14, 2017 in Environment
Paris - In a new report the Paris-based International Energy Agency (IEA) says that the demand for oil will decline only modestly in spite of the increasing use of electric vehicles (EVs) over the next two decades.
The IEA report "World Energy Outlook 2017" claims the global energy scene is in a state of flux. There is a rapid deployment of renewable technologies as there is a steep decline in their costs. Electricity is of growing importance as electric vehicles become more common.
The report notes that there are profound changes taking place in China's economy and energy policy with moves away from the use of coal. In the US there is a continued surge in shale gas and light oil production.
A recent update report released just this week points out that consumption of petrochemicals is still growing even as oil is facing competition from cheaper and more environmentally friendly energy sources.
Oil prices will continue to rise over next decade
Although the IEA has cut its longer term projection for oil prices, due to lower costs of renewable and conventional sources of energy as well as global attempts to mitigate climate warming, the price of oil is predicted to continue to rise toward $83 a barrel by the mid-2020s.
Over the longer term the IEA expect oil prices to settle within a range of $50 to $70 a barrel.
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A huge increase in number of EV's
By 2025 the IEA estimates that there will be about 50 million EV's in use. By 2040 this should climb to 300 million.
As of now there are only close to 2 million EVs on the road.
However even by 2040, EV use will cut only 2.5 million bpd or a mere 2 percent of global oil demand.
Laura Cozzi head of the Energy Demand Outlook division of the IEA said: "It's quite spectacular, because you're going to see the number of cars on the road (globally) double from 1 billion to 2 billion, thanks to electric vehicles and fuel economy standards. Many commentators say we are writing the obituary for oil demand ... it is certainly true in the passenger car segment and in power generation, but it is not true in the other two elements of oil demand: transportation and petrochemicals."
More power generation to come from renewables
Power generation will increasingly rely on renewables rather than on coal and oil.
The IEA estimates that more solar power capacity will be added each year than any other energy source, with an annual average increase of almost 70 gigawatts.
The IEA claims: "There are many possible pathways ahead and many potential pitfalls if governments or industry misread the signs of change."
United States appears poised to become leader in oil and gas production
The U.S. may become the most disruptive force on the supply of fossil fuels with its huge growth in shale oil production. By 2040 it may be the clear leader in oil and gas production.
Tim Gould head of the Energy Supply Outlook division of IEA said: "We are now witnessing a period of expansion in U.S. oil and gas production that matches or exceeds any historical records ever achieved by the oil and gas industry."
The IEA estimates the peak of US oil production will reach about 17 million bpd and will be reached during the 2020's.
The military as energy consumer
The U.S. Department of Defense (DoD) is one of the largest energy consumers on the globe and is responsible for 93 percent of all U.S. government fuel consumption.
In 2006 the DoD used almost 30,000 gigawatt hours of electricity at a cost of close to $2.2 billion. This would be enough to supply about 2.6 million average US homes.
If the DoD were a country it uses slightly less than Denmark and a bit more than Syria.
Annually the DoD uses a humongous 4,600,000,000 of fuel annually. This is an average of 12,600,000 gallons or 48,000,000 liters a day. As a country the DoD would come just ahead of Sweden in daily oil usage.
The U.S. armed forces are making some attempts to become more green. The U.S. Air Force in particular is changing its planes to run on liquid synthetic fuel blends and also to use Hydrotreated Renewable jet fuel.
More about Global oil demand, International energy agencies, electric vehicles
 
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