“Global energy demand remains strong and growing, but abundant supplies of oil and gas are now a fact of life. As a result, the economics of the past are changing,” says BP chief executive Bob Dudley.
Indeed, the once-popular idea of the world running out of oil in the future has been replaced by discussions about when exactly oil demand is likely to start declining. BP chairman Carl-Henric Svanberg suggests oil consumption could peak within the next 20 years, as a result of the world using more renewable energy and thanks to technological advances and efficiency in all fields of life, from engines to electric vehicles.
Just last week, the government of India — the country with the fastest growing oil demand — said it plans to phase out gasoline and diesel cars by 2030. An aspiration rather than a likelihood, perhaps, but telling nonetheless.
At the end of the day, the Stone Age did not end because the world ran out of stones, as Total chief executive Patrick Pouyanne has recently reminded participants of industry conferences, repeating a quote attributed to a former Saudi oil minister.
But, future expansion of the role of renewables and electric vehicles aside, the world already found itself awash with oil supplies in 2014, largely thanks to the speedy rise of US shale oil.
US onshore production did take a hit – albeit with a multi-months delay – after Opec decided at the end of 2014 to protect its own oil market share and let oil prices drop freely. But once Opec and a clutch of non-Opec producers moved late last year to curb their production in an effort to support prices, the resulting relatively moderate price rises were enough for US shale oil output to quickly head back up.
The Paris-based International Energy Agency (IEA) this week issued another upgrade to its total US crude production estimates as US shale oil output is booming again. The IEA now expects US crude production to end this year 790,000 b/d higher compared with the end…