World Oil Consumption Forecasts: Clash Between Producers And Consumers

The Organization of the Petroleum Exporting Countries (OPEC) has released forecasts for global crude oil consumption, which OPEC estimates will “grow 16.5% by 2045 compared to 2022 levels.”

In their annual report entitled “World Oil Outlook 2023,” OPEC experts wrote that global daily oil consumption will increase from 99.6 million barrels (2022) to 116 million barrels per day by 2045.

According to OPEC, growth in global demand will be ensured primarily by the industrial development of the countries of the so-called Global South, including India, China, African countries, and the Middle East. OPEC Secretary General Haitham al-Ghais also said that “the new consumption estimate exceeds the previous one by about 6 million barrels per day and may be further revised upward.”

Manufacturers’ estimates come into collision with those of the International Energy Agency (IEA), which just published in Paris a new report, “World Energy Outlook 2023.” The report, which also looks at global energy forecasts for the coming decade, emphasizes that “fossil energy sources are unsafe for the future.” This was immediately interpreted by international observers as “a new attack on OPEC and worsening of the market situation following the outbreak of war between Israel and Hamas and the recent general escalation of tensions in the Middle East.”

According to the IEA, as early as 2030, “renewable energy sources will account for more than half of the electricity mix, and the number of electric vehicles will be ten times higher than today.” The energy transition based on renewables is “unstoppable,” but the process of “farewell” to fossil fuels needed to combat the ongoing climate crisis is “happening too slowly.”

As IEA Director General Fatih Birol wrote in one of his posts published on the X social network (formerly Twitter), “If the governments of the planet strictly apply current policies in the future, then in 2030 renewable energy sources will account for 80% of all so called ‘new’ electricity and will provide half of the world’s electricity production.” Moreover, as Birol has already stated several times, directly clashing with the leadership of such an influential organization as OPEC, “demand for fossil fuels will peak in 2030 and then begin to decline.”

But between the lines of this generally positive picture for preserving Earth’s climate health, a serious warning can be read: currently, “due to fossil fuels,” emissions into the atmosphere are still too high, which seriously hinders the process of stopping temperature increase above the threshold of +1.5 degrees Celsius. And now the Energy Agency has delivered another backstab to OPEC: according to the IEA, “investment in fossil fuels should be halved.”

This is a head-on collision between the IEA and OPEC, as the oil industry constantly talks about the “need to significantly increase” investment in oil production. “Governments, companies, and investors must support the clean energy transition, not hinder it,” reminded Birol, for whom “claims that oil and gas represent a safe choice for the world’s energy and climate future appear weaker than ever.”

Unfortunately, in some industries, the development of advanced technologies aimed at slowing climate change is lagging behind. This has been very clearly demonstrated in recent days by sale for pennies in the USA of a “revolutionary” installation for capturing carbon dioxide, the main “responsible” party for the greenhouse effect on the planet.

US oil company Occidental Petroleum (Oxy) has sold one of the world’s largest carbon capture and storage facilities due to the “exorbitantly high costs required to operate it,” as well as the “very low performance of the entire system.”

The project began more than a decade ago and, according to a Bloomberg analysis, it demonstrated “how difficult it still is to develop sustainable technologies to reduce emissions of ‘more and more portions’ of carbon dioxide into the atmosphere” (CO₂), the main greenhouse gas that causes global warming.

Technologies of this type are often promoted by oil companies themselves to limit the pollution produced by their oil wells and refineries, but there are still major doubts about the economic feasibility of some of these technological solutions.

According to the Bloomberg report, “the plant never delivered the results expected by Occidental Petroleum: between 2018 and 2022, the system removed less than 800,000 tons of carbon dioxide per year from the atmosphere, or less than 10% of the amount originally claimed by Oxy specialists themselves.”

Again, according to an investigation by Bloomberg experts, “the plant never operated at full capacity due to the very high costs of operating and maintaining its efficiency,” which forced Oxy to “sell the plant literally for ‘pennies’ in January 2022, for approximately $200 million, compared to about $800 million spent on its construction alone.” To avoid criticism from environmentalists and, in general, from US public opinion, such a sensational sale “went totally unannounced, and the information was revealed only after studying the company’s tax records.”

Oxy was one of the first major global oil companies that committed to achieve carbon neutrality by 2050, and questions are now being asked about how it will even manage to reduce its emissions in the coming years.

However, according to IEA Director General Fatih Birol, the process of abandoning liquid hydrocarbons cannot be slowed down: “The transition to clean energy is happening all over the world and it cannot be stopped. It’s not a question of ‘if,’ it’s just a question of ‘when’ or, more precisely, ‘how soon.’ And the sooner, the better it will be for all of us,” Birol emphasized.