Predictions vary by decades, but most agree it is coming, with major implications.
In the first decade of the 2000s, there was growing concern about so-called “Peak Oil,” based on a theory developed by Shell oil engineer M. King Hubbert, who in the 1940s predicted that output of oil in the lower 48 states in the US would peak in the 1970s, a projection that turned out to be spot on 30 years later – for a time.
Others jumped on the concept to predict a top for global oil output, with many in the 1990s saying that world oil production would peak about 2008. That turned out not to be true, as fracking and other unconventional techniques greatly added to oil output, pushing prices way down.
Now, rather than concerns about Peak Oil supply sending prices way up, as we saw for a while in 2008, now the oil patch is more focused on Peak Demand – the point at which world consumption of oil reaches its inevitable peak.
A combination of more efficient car engines, a trend towards electric vehicles, rising using of solar and wind power and more have many convince Peak Demand is near – with a huge impact on society, the supply chain, the global warming discussion and more.
The Wall Street Journal reports that forecasts for peak oil demand diverge by decades. For example, the Paris-based International Energy Agency predicts that demand will grow, though slowly, past 2040. Meanwhile, the two biggest US oil companies, Exxon Mobil and Chevron, say peak demand isn’t in sight, while some big European producers predict that a peak could emerge as soon as 2025 or 2030.
Of note is the fact that the consumption of oil in developed economies has been declining for many years.
TheGreenSupplyChain.com covers that report each year, noting last year BP’s analysis showed that oil’s share of world energy consumption in 2015 increased modestly for the first time since 1999, driven by dramatically falling prices.
Source: Green Supply Chain