Peak Oil Won’t Be Reached Until At Least 2030, According to One Expert

When Joe Biden assumed the presidency, his administration began in earnest to implement policies to combat the so-called “Climate Crisis” facing the planet.

Where the Trump Administration had focused on unshackling America’s energy production to achieve energy independence, President Biden swiftly rejoined international efforts to adopt Green Energy solutions to detach global economic dependence on fossil fuels.

This included swiftly rejoining the UN’s Paris Climate Accords, advocating for massive green energy spending in proposed infrastructure legislation, and setting an ambitious goal “to create a carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050.”

But the transformation of America’s energy infrastructure and economy cannot not simply be mandated into existence, and one expert believes that so-called “peak oil” will not be reached for nearly another decade.

Mark Finley is a co-author of a study commissioned by Columbia University and the University of California, Davis to understand if global economies have reached peak oil demand and to what extent the global pandemic may have impacted this question.

Finley is the Fellow in Energy and Global Oil at Rice University’s Baker Institute for Public Policy and former BP U.S. Senior Economist. In the first part of a two-part interview with The GailFosler Group, Finley revealed the following:

“The bottom line of the study is that it’s very hard to see oil demand peaking before 2030. Only one of the four scenarios we examined charted a path where oil demand begins to decline after 2025. That scenario was based on both high COVID impact and aggressive government policy.”

Finley notes that the findings of his analysis directly contradict the outlooks forecasted by several key players in the fossil fuel industry:

“There is a veritable cottage industry of analysts calling for oil demand to decline in the future. With the outbreak of COVID and the sharp contraction of oil demand last year, some analysts were even saying that oil demand had already peaked and that we will never get back to where we were.”

“BP’s Energy Outlook’s most aggressive, net zero scenario had a dynamic like that. The International Energy Agency (IEA) has a similar scenario as well.”

However, while many analysts will note that last year represented the single largest decline in oil demand on record, Finley believes this year will likely bring on the single highest increase in oil demand ever as a result.

The drop off in demand is directly related to the pandemic and while the pandemic ultimately reoriented many aspects of work life in America, creating a remote work culture which alleviated the demand for commuting services, it may have ultimately strengthened America’s car culture.

“On the one hand, the pandemic has provided people with more opportunities to work at home, so there may ultimately be less demand for commuting services. On the other hand, we are seeing a tremendous resistance to riding subways, with people instead driving their cars or even moving out of big cities to take advantage of the freedom to work remotely. Since there is no mass transit in those smaller areas, that leads to more dependence on cars.”

Then there is the question of electric vehicles. Electric vehicles are advertised as the way of the future, but still only represent a small fraction of global vehicle sales, and will likely remain that way for years.

“Electric vehicles are currently about 5 percent of global sales and even less prominent in the United States, where they are about 2.5 percent of new vehicle sales so far this year.”

“The average vehicle will be on the road for as long as 15 years. Even if we went to 100 percent electric vehicle sales today, a significant share of the auto fleet would still be internal combustion engine vehicles 10 years from now.”

And while the question of America’s potential transition into a Green Economy is often the focal point of discussions around climate change in this country, the reality is any reduction in fossil fuel consumption by the US & Europe will likely be absorbed by “emerging economies.”

“It’s not enough for just the United States and Europe to do something on this front. The study makes very clear that decarbonization is a global problem that requires a global solution.”

Throughout his interview with the GailFosler Group, Mark Finley makes it quite clear that the path toward green energy replacing fossil fuels is quite uncertain in the near term and would almost depend entirely on aggressive policy making to implement it into reality.

What difference will it make if the United States lowers net emissions if China continues to relentlessly create more? What difference will electric vehicles make if they are unaffordable or unused by the majority of the driving population? After a year of air-travel being decimated, will people simply never return to flying in numbers seen before Covid? If they do, they will not be flying in electric airplanes.

The only way we have reached peak oil is if Covid never ends or governments simply never lift pandemic related restrictions on their populations. A return to open movement would all but guarantee return to baseline oil demands across the planet, a planet whose economic infrastructures are almost entirely dependent on fossil fuels and coal.

To read the entire interview with Mark Finley, visit the GailFosler Group’s website here.

Image Credit: Photo by Kartikay Sharma on Unsplash

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

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