[lknaik]

Only fitting to have a "Peak Demand" thread as there is already a Peak Oil thread here on this forum.

Demand for oil will peak by 2030 – BP chief

GLOBAL demand for oil will peak within the next two decades, the chief executive of Europe's largest oil company has said.
Tony Hayward of BP said the plateau would be reached between 2020 and 2030 as falling demand from developed countries balanced growing demand from developing nations.

BP said it was the first time Mr Hayward had put a date on peak demand, following a range of predictions from other bodies.

His comments also suggest Mr Hayward now thinks the peak will come earlier than he had previously thought.

Mr Hayward was reported last summer as saying: "I don't see it coming anytime in the near future. One day the world will stop demanding oil, but it is decades away in all likelihood.

"More than 60 per cent of the world's energy needs in 2050 will still come from fossil fuels."

BP said Mr Hayward's latest prediction of lower demand from western nations was based on further energy efficiency measures and greater use of renewable sources such as wind farms.

Mr Hayward said government policies in the developed world were eroding demand at the rate of 1 per cent per year.

He said this was contributing to an oversupply of refineries, which was prompting BP's rivals to close and sell their facilities.

Energy experts said the current decline echoed the downturn in the 1970s, but environmental groups said it must be curbed faster to combat global warming.

Dr Peter Cameron, director of the Centre for Energy, Petroleum and Mineral Law, at Dundee University, said: "The oil crises of 1973-4 and 1979 saw a massive reaction against oil use and a rapid reduction in western consumption. What we are seeing now are government policies to promote renewable energy and energy efficiency which are creating another decline in oil demand.

"It is a bit like a wave, almost co-ordinated by western governments."

Dr Cameron added that much of the increased demand for oil among economically expanding countries such as China was fuelled by the production of exports for the West.

However, Friends of the Earth Scotland said faster action was required to curb demand earlier.

Chief executive Duncan McLaren said: "If peak oil demand is still that far off, we must constrain fossil fuel production because of climate change."

BP's prediction for demand peaking comes months after Deutsche Bank forecast it would peak in six years' time.

The German bank said the greater use and efficiency of electric vehicles would be a major factor, along with other energy efficiency improvements.

But the International Energy Agency has predicted demand will resume its long-term upward trend once global economic recovery gathers pace, although it said demand would peak before supplies peaked.

[Peter2004]

But the International Energy Agency has predicted demand will resume its long-term upward trend once global >economic recovery gathers pace, although it said demand would peak before supplies peaked.

IEA recently said oil use in rich industrialized countries will never return to its 2006 and 2007 levels, suggesting more fuel efficiency and the use of alternatives.

“When we look at the OECD countries; the US, Europe and Japan, I think that the level of demand that we have seen in 2006 and 2007, we will never see again”.

The IEA’s predictions have historically been notorious for forecasting demand and assuming that supply will always be available to meet that demand. Now they are doing exactly the opposite.

We know that crude oil production already peaked and that other liquids have had to make up a growing proportion of the mix, so realistically the IEA’s (and others) forecast is simply a spin on the peak oil story.

[19me74]

We know that demand destruction happens when the economy tanks. -- And the economy is encouraged into tanking if oil prices rise too high. -- I hope supply is able to be kept high enough to keep the fragile global economy stable. Peak demand is ultimately driven by price. --And the drive toward alternative energy is ultimately driven by price.

[a]

Yes, much of the demand estimates are linked to price.

From the start of the bull market in oil back in 2002 when the price went thru $25 a barrel, demand growth was being held back by price.

If prices had stayed under $25 a barrel for the last 8 years, demand would have been a lot higher than today.

What was happening was the price gains was limiting demand growth to more or less match the limited ability to grow supply.

To figure out what demand will be for the next 20 years (IMO completely impossible to do) you need to first figure out what oil prices will do. From past history it is next to impossible to GUESS prices 2 years out let alone 20 years out.

[hani]

To figure out what demand will be for the next 20 years (IMO completely impossible to do) you need to first figure out what oil prices will do. From past history it is next to impossible to GUESS prices 2 years out let alone 20 years out.

Exactly. That's why I don't think oil prices can be sustained much above current prices (certainly not above $100 inflation adjusted). If oil prices rise much higher, the alternatives are viable and will make inroads into the supply chain (as ethanol already has to the dismay of the refiners).

The longer oil remains close to $100, the more switching that will occur. Eventually the benefits of clean(er) energy will outweigh oil and oil will have to trade at a discount to attract buyers. Once that happens, we will be beyond the Oil Age.

[19me74]

No question the transition to alternatives will happen, but the question is how quickly.

For example the govt's goal is to have 1 million hybrid cars on the road bt 2015. That sounds like a lot, but it is only 1/2 of 1% of the number of cars on the road. The population is growing faster than that.

The rate of growth of oil demand in both the oil producing countries where prices are kept low, and add to this China and India's demand.

For example the Nano get at leats 75 mpg, so gas prices is not as important, but it may not use much per car but add in millions of new cars and that is higher demand.

[19me74]

America’s hunger for gasoline falls and is unlikely to return

By STEVE EVERLY
The Kansas City Star


The United States used more gasoline than ever in 2007 and far more than any other country. It seemed as if America’s growing appetite for gas would go on forever.


Well, it won’t — and things may never be the same.

Gasoline consumption has been down the last two years, in part because of the recession. Even when the economy picks up, three underlying trends mean the U.S. might never use as much gas again:

•New standards for cars and light trucks, including SUVs, will make U.S. vehicles more fuel-efficient.

•The growth in the number of U.S. vehicles, after surging the last 30 years, is likely to plateau. The country now has more than four vehicles for every five people, including children.

•Alternative fuels will grow enough to cover increased fuel needs.

As a result, the federal Energy Information Administration predicts that 2007 was the peak year for U.S. gasoline demand. Even in 2035, the last year of the latest long-term projections, motorists are expected to use less gasoline than they are now.

As unexpected as this trend was, there is widespread agreement that it is right.

“We’re on a slow but inexorable path away from petroleum. This is a big deal,” said James Williams, an analyst with WTRG Economics, an oil and gas consultancy.

In a recent speech in Washington, Rex Tillerson agreed.

“Motor vehicle gasoline demand is down, is headed down and is going to continue to head down,” said Tillerson, the CEO of Exxon Mobil Corp., the world’s largest oil company.

That decline is reverberating through the oil industry. Refineries now use only 78.5 percent of their capacity, the lowest level since the federal government began routinely collecting the information in 1990. Valero Energy, which once bought refineries enthusiastically, now snaps up ethanol plants instead.

And Chevron Corp. recently announced it was reorganizing its U.S. refining business, which could include selling or closing refineries.

One variable will be how quickly consumers take to alternatives and more-efficient vehicles.

When the new fuel-economy standards were being considered, a Gallup poll found 80 percent of respondents supported the idea, even though it could make vehicles smaller and more expensive. A Pew Research Center poll released last week found only 49 percent of respondents said they favored making energy a top priority, down from 60 percent a year ago.

Mike Omotoso, an analyst for the marketing firm J.D. Power & Associates, said many consumers are reluctant to pay more for alternatives such as electric hybrids, especially when gas costs less than $3 a gallon.

“People can have short memories,” Omotoso said.

Other analysts say $4 gasoline left a lasting impression. Mike Right, a spokesman for AAA, said consumers understand things have changed and higher energy prices weren’t a temporary situation.

“Everyone knows the era of $2 gas is over,” he said.

Paul Gilbert, a former area resident who is now retired in southern Missouri, makes regular trips to Kansas City in his pickup truck — trips that became especially pricey when gas prices spiked in 2008. Though gas prices have settled, Gilbert said they’re still too high, and he plans to buy a Honda Accord or Toyota Corolla.

“You either do what is right or keep on going down the path we’re going down,” he said. “People are starting to wise up.”

Americans have tried this before. In the 1970s after the OPEC oil embargo, the government imposed fuel-efficiency standards and other measures to slash fuel and oil consumption. The effort eventually was undone by plummeting oil prices and the popularity of thirsty SUVs.

The experience left a lesson that is playing out again. Forward-looking policies require patience and can be difficult politically, but they pay off, said Jay Hakes, a former head of the Energy Information Administration and the author of “A Declaration of Energy Independence.”

“It’s a gradual thing,” Hakes said. “The really good policies are the ones that look five to 10 years ahead.”

A similar approach is showing results. Federal tax incentives for ethanol, though widely criticized, have helped increase production from less than 1 billion gallons in 1992 to 10.5 billion last year. That reduces by 5 percent the amount of gas the country needs.

The new fuel-efficiency standards won’t be fully felt for years.

Congress approved the measure in 2007, and the Obama administration toughened it by saying the standard must be fully in force by 2016 instead of 2020. Fuel efficiency must start climbing in the 2011 model year, and by 2016, cars are to average 39 miles per gallon and light trucks, including SUVs, must average 30 miles per gallon. The current requirements are 27.5 mpg for cars and 23.1 for light trucks.

How much fuel will that save? The 2011 models, according to federal estimates, will save 900 million gallons over their lifetimes. That’s not bad, but it amounts to only a day’s worth of U.S. oil consumption.

By 2016, the results are more impressive. All the vehicles produced under the new standards are expected to save 76 billion gallons of gas. That impact will build for a few more years, because it takes about 20 years to completely replace the nation’s vehicles.

Meanwhile, a decline in the number of vehicles owned by U.S. households will have an impact. From 1980 to 2007, 100 million vehicles were registered in the U.S., giving the country 844 vehicles for every 1,000 people. As a result, car travel nearly doubled to 3 trillion miles a year.

Last year, the number of vehicles in the U.S. dipped slightly, J.D. Power said, and just slowing the growth in vehicles should help prevent a surge in gasoline demand.

All of that doesn’t mean gasoline will stay cheap, because growing demand in countries such as China and India eventually will send prices back up.

And it doesn’t mean gas will disappear. The Energy Information Administration predicts that by 2035, petroleum still will provide 88 percent of the fuel for cars and light trucks.

The rest will come from alternative fuels — mainly ethanol, followed by electricity, natural gas, hydrogen and propane. Many analysts say alternatives will grow much faster than federal officials expect. That will depend in part on developing infrastructure such as stations to charge electric cars or dispense compressed natural gas.

Several alternate fuels could enjoy some growth, said Mary Beth Stanek, the director of environment, energy and safety policy for General Motors Corp. GM expects hydrogen to play a bigger role and has a second generation of hydrogen cars in the field.

However quickly alternatives are adopted, they mean less gasoline use — and a reshuffling of past expectations.

In 2005, the chief executive of the largest independent U.S. refining company, Valero, declared a “Golden Age of refining” and said the best was yet to come. Less than five years later, Valero has a new CEO — who says that age is over.

When Valero spokesman Bill Day was asked last week whether his company agreed that demand for gas will drop, he put it this way:

[NUTRINO]

It is hard to believe we will use less gasoline given the fact that we just spent the last decade urban sprawling all over the place.

[bellevue]

From a gasoline consumption standpoint, the Nano is a small motorcycle.

They already sell 8 million motorcycles a year.

The Chinese motorbike market is around 18mm, but they're having a tough time

competing with cheaper electric bikes, which now have sales of 21mm/yr.

Gasoline costs around $3 in China and $3.50 in India, and that's a big deal

when your p/c income is $4k and $1k, respectively.

[hankv]

Saudi Arabia, Other Oil Producers Brace for Peak Oil Demand in Developed Nations

Posted by Josh Garrett on February 16, 2010 at 12:39 pm

Saudi oil adviser Mohammad al-Sabban called falling oil demand in the developed world an “alarm.” (image: iisd.ca)

Saudi oil adviser Mohammad al-Sabban called falling oil demand in the developed world an “alarm.” (image: iisd.ca)

Bloomberg News reported on Monday that a Saudi oil adviser called declining oil demand in developed nations a serious “alarm” that should push Saudi Arabia to diversify its economy and reduce its reliance on oil exports.

Oil demand has been on the decline in some industrialized nations since before 2008, when a sharp downturn first gripped the global economy. Since then, the downturn has continued and the trend of falling oil demand has expanded to the US, the world’s top oil consumer. Currently, the economic crisis is seen as the foremost driver of declining oil demand. But some expect longer-lasting influences, such as a new emphasis on conserving fuel and energy in the US, to carry the downward trend decades into the future.

In its monthly report released on Thursday, the International Energy Agency noted that the economic recovery could very well come without a recovery in oil demand in the OECD (the Organization for Economic Cooperation and Development, a group of wealthy nations that includes the US) nations, and warned it could “potentially [support] the argument that OECD demand has peaked.” If oil demand has peaked in the developed world, oil producers have a lot to worry about—OECD nations will account for 53 percent of world demand in 2010, according to EIA estimates reported by Reuters on Thursday. Although the OECD will account for more than half of the world’s crude demand this year, the IEA estimate also notes a full 1 percent decline in that demand since last year—a substantial drop.

Outside the OECD, oil demand in developing nations is still showing robust growth. In the medium- to long-term, oil producers will have no shortage of customers. But the effect of plunging OECD demand is basically a postponement of strains on oil supplies for a few years. In the meantime, however, as French oil giant Total’s CEO Christophe de Margerie told Reuters, “some tough decisions will have to be made.” One of those tough decisions, the scaling back or shutting down of refineries, has already been made many times over. Squeezed by high crude prices and extremely weak demand for refined products, the refining sector has been forced to scale back operations significantly in the last year, but still reported massive losses in the fourth quarter of 2009.

For oil producers, the question remains: how long until demand from developing nations outweighs falling demand from OECD countries? Until that time, Saudi Arabia, the rest of OPEC, and the large multinationals will continue to weather the storm of a fragile economic recovery, related demand weakness, and unstable and unpredictable crude prices. Looking beyond the moment that the developing world’s demand overtakes that of the OECD, some believe that energy conservation programs and development of alternative energy sources could expand to the developing world more quickly than expected, bringing about sinking oil demand worldwide. When that eventuality is combined with the controversial specter of peak oil production, oil producers face a rather bleak long-term outlook.

For its part, it appears that Saudi Arabia has already begun to heed the “alarm” of OECD demand decline, and “is making a push into renewable energy and is starting its first carbon-capture project,” the Saudi oil adviser told Bloomberg.

For consumers of heating oil and other petroleum products, the future of prices is uncertain. Falling demand in the US, for example, has managed to keep heating oil and gasoline prices relatively steady for the last year or so, but when demand for crude ramps up in developing nations, the resulting spike in crude oil prices could make for some huge increases in retail fuel prices. The best protection for consumers against those increases is to seek out and being using alternative fuels like biofuel heating oil as soon as possible. The more renewable fuel in your gas tank or heating oil tank, the less you will be subject to the movements of global crude prices.