Even after 2050, global oil demand is set to continue to rise because renewables cannot entirely replace fossil fuels, energy markets expert Anas Alhajji said during a recent energy conference hosted by Nigeria.
“The impact of climate change policies on oil demand are highly exaggerated – The impact is mostly on demand growth, not on demand itself,” Alhajji said during a keynote speech at the event focused on the impact of the energy transition on oil-dependent economies, as carried by Nigerian outlet Energy Frontier.
The world will need all energy sources even in three decades, the expert said. While technology will be a key enabler of the energy transition, it has its limits, Alhajji noted.
“African countries can reduce their carbon footprint by focusing on energy efficiency and the low hanging fruits, save oil & gas for exports or value added industries and place solar and wind projects strategically.”
Many analysts and forecasters expect global oil demand to peak at some point in the 2030s, or even earlier.
Last year, even OPEC put a timeline to peak oil demand. In its World Oil Outlook 2020 in October, OPEC said it expects global oil demand to exceed the pre-pandemic levels in 2022 and grow steadily until the late 2030s, when it will begin to plateau, in a major shift in its forecast that put a timeline to peak oil demand.
This year, the energy transition and the fight against climate change have become even more topical than during last year’s crisis. Analysts and forecasters are trying to understand and predict how the world’s still significant need of oil would reconcile with the net-zero targets that many countries have already set for 2050, or 2060 in China’s case.
Global primary energy demand is set to only grow in the future.
This higher energy consumption will need greater efforts to reach net-zero emissions, especially considering the fact even surging renewables capacity is unable to meet rising electricity demand. That’s an assessment of the International Energy Agency (IEA), which suggested in the bombshell report in May that net-zero 2050 wouldn’t need any new oil, gas, and coal investments after 2021.
NB: Charles Kennedy wrote this article for Oilprice.com