Donald Trump has just left Saudi Arabia for Israel with a $350 billion worth of contracts under his arm. One wonders if he would gather as much in the latter country. In any case, the president of the USA seems to have tabled a lot of his plans if not all on getting America’s manufacturing, etc. back to where it stood years past. Doing so would mean as before, heavy reliance on the easy resource that is fossil fuel in whatever form be it conventional and / or Shale. But he seems to ignore that there’s a growing consensus that the end of ever-rising consumption of Oil is in sight.
OPEC and Russia as world greatest producers have helped a great deal in the past but recently antagonised the US by literally cutting back their production. As it happens they only helped the US emerging Shale sector to come back in force and recapture its share of the world market.
At this conjecture, an enlightening article of Wall Street Journal written by Lynn Cook and Elena Cherney was published on May 21, 2017 on perhaps the most critical aspect of the fossil oils industry that is of their natural reserves as combined with all related industries peaking shortly any time. We would of course reiterate our wish to cover for as much as we can all matters that relate to the MENA region. The Peak Oil hatchet hanging over the heads of all oil producing countries and by extension on all non-petro economies has long been in the air. “All good things must come to an end” has been a refrain since the advent of oil and its follow up early harvests of green backs.
We extracted some excerpts especially that concerning the developing world and republished here for purposes of widening the circles of discussions.
We would however advise to address any comments on the article proper directly to the authors whereas any discussions within our membership on the phenomenon itself is as always welcome here.
The developing world
Another crucial variable to consider is the developing world. Any levelling of driver demand for gasoline in rich countries could be offset by growing demand among new middle-class drivers in developing nations.
Part of BP’s forecast of a mid-2040s peak rides on continued growth in developing nations. As China, India and other nations get wealthier over the next two decades, another two billion people—about a quarter of the world’s population—will move from low to middle incomes.
Trucks in a container port area in Shanghai. The rate of economic growth in developing countries is one of the variables that make predicting peak oil demand a challenge. PHOTO: KEVIN LEE/BLOOMBERG NEWS
“When that happens, your demand for oil increases,” says BP’s Mr. Dale. “You stop riding on overcrowded buses and trains, and you buy your first motorbike. And then you buy a car.”
To come up with Statoil’s 2030 peak-demand forecast, Mr. Wærness, the company’s chief economist, says he thinks a lot about what life will be like 20 years from now for much of the world’s population—especially in India, which will emerge to lead global energy-demand growth in the 2020s, taking the mantle from China.
“I’m not talking about people in New York and San Francisco but kids of the current poor people in Calcutta, Chennai and Mumbai,” Mr. Wærness says. “They will become global middle-class consumers by 2040.”
Consider this jet-fuel math: Seven times as many Chinese are flying now as in 2000, and six times as many Indians, he says. “When they get rich, they’ll want to travel to exciting places.”
Why, then, does Statoil expect an early peak? The company sees increased demand balanced out by efforts in some developing countries to reduce greenhouse-gas emissions and limit climate change. In China, for instance, the government is subsidizing electric vehicles, and in cities, only EVs are allowed on the road on days when air quality is bad.
Such policies around the world stand to have a major impact on the fuel mix. Globally, carbon intensity and energy intensity have already peaked and will trend down through 2035, according to a Wood Mackenzie analysis. But many analysts say the Paris Agreement to limit global warming is just the beginning. And some companies are starting to plan accordingly.
“To us, it’s real,” says Statoil’s Mr. Sætre. “The future has to be low carbon.”