IEA report projects oil demand will grow to 102 million bpd by 2050

By Bruce Lantz

According to pronouncements from the world’s environmentalists and climate change aficionados, we are quickly moving towards a fossil-free planet. Oil and gas, along with coal and other nonrenewable energy sources, will soon be a thing of the past, they say.

And there is some truth to their claims. For example, Nova Scotia, sitting on Canada’s East Coast, faces more warmth and rain with increased risk of floods, wildfires and crop-killing intense heat due to climate change, according to a risk assessment — using high carbon emissions scenarios because it says that’s the path the world is on — released by the provincial government this month.

“Climate change is having an impact on the health and well-being of our province,” said Alex Cadel, a climate specialist with the Nova Scotia Department of Environment and Climate Change, in a statement.

The report predicts that the province will see that temperatures above 29C will increase to two weeks annually, up from just two days in the 1990s, while the number of snowy days annually will drop from 39 in the 1990s to 25 by 2050 and just 17 in the 2080s. Rain will increase, sea level will rise a metre by the end of the century and sea surface temperatures will rise nearly three degrees, the report predicts. Peak winds will rise by 7 kilometres an hour by the end of the century, the assessment predicts, and sea levels will rise a metre by that time. It says flooding will be the greatest concern in the 2030s, wildfires will be the biggest threat by 2050, and by the 2080s extreme temperatures that could disrupt food production, human health, infrastructure and ecosystems will be the major concern.

“The climate crisis demands urgent attention from all of us,” the report concludes.

“We’re already past the point of pushing it down the road,” said Will Balser of the Ecology Action Centre in Halifax, NS. “We’re already feeling the effects of this. And so, I think going forward we just need to be very clear on what we value most and what we’re preparing to protect.”

In the wake of the recent pandemic, the Russia-Ukraine conflict and record-high oil and gas prices, the world is in a “critical decade” for delivering a more secure, sustainable and affordable energy system, according to the World Energy Outlook 2022 report by the International Energy Agency (IEA). Today’s situation underlines the benefits of greater energy efficiency and are prompting behavioural and technology changes in some countries to reduce energy use, the report says, but net zero emissions by 2050 won’t be achieved without a huge increase in energy investment.

“The potential for faster progress is enormous if strong action is taken immediately.”

But that wariness about the future doesn’t mean the use of fossil fuels must end, at least not immediately. The IEA said in a recent report that oil and gas will remain critical long into the future. The world uses oil and gas on a massive scale, more than just fuel for vehicles, the report said.

“Even in the net zero carbon scenario . . . oil and gas are still significant energy resources,” said energy analyst Daniel Yergin in a recent podcast hosted by the Washington, D.C.-based Brookings Institute think tank. Yergin cited oil-based polyurethane nylon clothing, airplane bodies which are carbon products and even Tylenol, another oil product, as examples.

The IEA forecasts that oil and gas will remain central to the global energy system through 2050. In 2021 it supplied 52% of the world’s energy needs and the IEA predicts it will still provide 47% in 2050. Meanwhile, renewable energy’s share of global supply will increase to 20% in 2050 from 12% in 2021, and coal’s share will decline to 15% in 2050 from 27% in 2021.

Significantly, the U.S. Energy Information Administration (EIA) recently raised its forecast for this year’s crude output growth marginally, while petroleum demand is likely to rise less than previously expected. The EIA projected that crude production would rise to 11.87 million barrels per day (bpd) in 2022, compared with its previous estimate of 11.83 million bpd. Petroleum and other liquid fuels consumption would rise to 20.36 million bpd in 2022, lower than the prior forecast of 20.38 million bpd. For 2023, the EIA projected that crude production would rise to 12.34 million bpd. That compares with a record 12.29 million bpd in 2019. Next year, petroleum and other liquid fuels consumption is expected to rise to 20.51 million bpd, from a previous estimate of 20.48 million bpd.

Canada could become the world’s leading supplier of oil and gas. Its oil sands are the only major oil basin where producers have jointly committed to reach net zero emissions by 2050, while its liquefied natural gas (LNG) will have among the lowest emissions per tonne, which will help the world reduce its reliance on coal.

The IEA projects that oil demand will grow to 102 million bpd from 94.5 million bpd in 2021 and will hold at 102 million bpd in 2050. Similarly, natural gas is projected to grow to 4.4 trillion cubic metres in 2030, from 4.2 trillion in 2021, and stay there through 2050. Even if the IEA’s net zero scenario comes true, in 2050 oil and gas would still supply 15% of the world’s energy needs. Achieving that 2050 goal is unlikely, given that two of the world’s largest emitters, China and India, have only pledged to reach net zero by 2060 and 2070, respectively.

So, maintaining investment is oil and gas is important even as the world strives to reduce emissions, Yergin said.

“The reality is that the world still uses 80% of its energy from hydrocarbons. Just to maintain production you need new investment,” he said.

“For those who say we shouldn’t invest anything in fossil fuels now, I remind you that we have to feed the system we have today while we’re moving toward the new system. This will be a difficult tightrope to walk. But it’s where we are.”