<p><em>August 2018</em></p>

<p>The subject of peak oil and gas demand has recently risen to prominence. &nbsp;From concerns over &lsquo;peak supply&rsquo; in the early 2000s, there is now debate over whether the demand for oil and gas is set to decline and, if so, when and how quickly. &nbsp;&nbsp;&nbsp;In its latest research report, the Abdullah bin Hamad Al-Attiyah International Foundation for Energy and Sustainable Development looked at a number of major forecasts that assumed there will be a slowing of demand growth, and a shift away from coal and oil towards gas and renewables, driven by demographic change, economic maturity, and environmental concerns.</p>

<p>Most forecasts generally show rising but slowing oil demand up to 2050, but there are credible scenarios with a peak in the mid-2030s, driven particularly by electric vehicles (EV).&nbsp; &nbsp;Currently, passenger vehicles make up the single largest category of oil use, with road freight second. &nbsp;The IEA&rsquo;s forecasts show that this remains true to up to 2040, in their New Policies scenario, but that the focus of growth shifts.</p>

<p>The decline in energy demand could be driven by the adoption of electric vehicles, improvements in efficiency, and the substitution of gas by renewable energy. &nbsp;Underlying these trends is the connection between technological advances and a policy push from governments to reduce oil use, primarily because of concerns over climate change. &nbsp;If energy consumption was to peak, it would have major investment consequences for oil and gas producing countries and require urgent efforts at<em> diversification.</em></p>

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<p><img alt="" src="https://gallery.mailchimp.com/777a1a371fec392e7c287f6a8/images/517a5a2f-4139-49cf-ace9-e72d95d53d15.jpg" style="height:359px; width:600px" /></p>

<p><strong>(Figure 4: taken from full Al-Attiyah Foundation Research Paper:&nbsp; Peak Oil and Gas Demand)</strong></p>

<p>In the report, the Al-Attiyah Foundation analysed a number of leading energy organizations&rsquo; forecasts for future oil and gas demand including oil companies: &nbsp;BP, ExxonMobil and Statoil; governmental agencies: International Energy Agency, Energy Information Administration (US), and OPEC; environmental NGOs (Greenpeace); and consultancies and think-tanks: Wood Mackenzie and RethinX.</p>

<p>All major forecasts show energy demand growth slowing down over time, as economies mature and become more oriented to services, population growth slows, and efficiency improves. &nbsp;However, none apart from Greenpeace and Statoil&rsquo;s &lsquo;Renewal&rsquo; case has an actual fall in primary energy demand by 2050.</p>

<p>The main forecasts suggest about a 40% increase in primary energy demand by 2050, or around 1% per year from now on. &nbsp;In contrast, primary energy demand grew 2.2% per year on average during 2000-2016, despite the global financial crisis.&nbsp; No forecast identified show the opposite is possible, but demonstrated a continuation or even acceleration of energy demand growth, which might come from new technologies, namely: &nbsp;robotics, hypersonic flight, space travel, etc.&nbsp;</p>

<p>Nevertheless, within a general trend of increasing energy demand, the distribution between the three fossil fuels and renewables can vary greatly depending on the scenario with nuclear energy&rsquo;s share remaining at a fairly low and flat level in most scenarios researched. &nbsp;</p>

<p>Except in very aggressive scenarios of environmental policy, oil demand is predicted to peak in the mid-2030s at the earliest, or more likely the 2040s or beyond. Petrochemicals, aviation and shipping, and road freight will support demand, while use in power and industry falls. &nbsp;The key uncertainty is the speed and size of deployment of electric vehicles (EVs).&nbsp; The share of EVs today is so small that predictions are very difficult. It should become clearer in the early 2020s; EVs will anyway take a significant time to penetrate the existing vehicle fleet.</p>

<p>In summary, major oil producers and companies must watch carefully the competitiveness and deployment of non-oil technologies, including EVs but also battery trucks, LNG shipping and non-oil petrochemical feedstocks. Gas demand is more confidently predicted to continue rising, but it faces competition from cheap coal and cleaner renewables. &nbsp;Thus, it remains essential for major gas producers to continue improving the environmental performance of their fuel, and develop new markets.</p>

<p><strong>READ THE FULL REPORT: <a href="https://www.abhafoundation.org/energy_html">https://www.abhafoundation.org/energy_html</a></strong></p>
