Saturday, August 10, 2013

Peak Oil Demand: Near or Far?

An article from yesterday's Washington Post "Is peak oil demand just around the corner?" is, in part, a summary of an article that appeared recently in The Economist ("Yesterday's Fuel").

Citi recently predicted that world oil demand may peak by 2013 because of increased transport efficiency among other factors.



The Washington Post piece features a discussion with Stanford's Adam Brandt who is skeptical about predictions of oil demand peak.


Brandt thinks the demand story is more complex because of the rise in unconventional sources for transport fuel including natural gas, biofuels and oil from tar sands, not to mention electric vehicles.

Brandt doubts that auto fuel efficiency will continue to increase has it has in the recent past and sees a potential explosion of transport demand from Asia.  

He further invokes Jevon's Paradox to suggest that easier and more pleasant driving from Google autonmous vehicles and driving errand outsourcing may in fact increase transport fuel demand.  The past is not necessarily the key to the future.

18 comments:

Zeke said...

I was a therapist for 25 yrs. One thing I learned early on is when a client didn't want to answer a question he/she switched the subject. So we switch from peak production to peak demand and a whole new conversation starts which will entail endless debates about the validity of the concept. Meanwhile, reality plugs along. How easily distracted we are by senseless debates about which neither participant knows much.

Arthur E. Berman said...

Zeke,

I think the new debate about peak demand is largely irrelevant since we will hit peak production long before these projections of peak demand.

The U.S. has been cutting back on consumption by 1.5%/year since early 2005 not because we are becoming either more efficent or more environmentally conscious; we are using less oil because our economy cannot bear the carrying cost at more than $95/barrel Brent.

This is the topic that the patient doesn't want to discuss. As a friend of mine says, "When you are squeezed out of the oil import market, you are, by definition, energy independent."

yvesT said...

The pics do not appear for me (OS X firefow or safari).

Otherwise this whole "peak demand" story just sounds like economists trying to forget about their most basic law : offer and demand driving price.

Or did they just forget to look up the barrel price graph on a sufficiiently long period ? Like :

http://iiscn.files.wordpress.com/2013/07/bp-oil-price-2013.jpg

Instead of getting in these rather stupid discussions, the question should perhaps be :

The price transition of the seventies were refered to as "oil shocks" and created recessions or a strong decrease in growth.

How come most of today's economists cannot spell "oil price" as one if not the main reason of current crisis.

Overall all this truly smells lobbying spin quite a bit ...



Arthur E. Berman said...

YvesT,

I fixed the image problem--thanks for pointing that out.

On your other point, yes, peak demand is a silly idea in my view. I posted the information so people would know what is out there. This seems to be a derivative discussion that somehow assumes that peak production and demand are separate and unrelated entities.

Art

Evan said...

It is a shame really about the nomenclature of "peak demand" since if considered a bit differently, i.e. "peak demand as constrained by capital, income, and financial limitations" the subject becomes the most compelling and interesting subject component of the whole peak oil discussion. But as currently used peak demand disguises this problem through economic foolishness.

Lance Tankmen said...

So for example with the economy and all picking one place, what do you think will happen with the petroleum products in Everett WA?

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