“The case for a near-term peak in oil demand is certainly more plausible than that of peak oil supply, but its popularity reflects a degree of exuberance that is not warranted by the data.”
" ... oil dominates the transportation market.
Get Americans back toward normal, and the planes, trains, and automobiles will be out in force. RVs too, as well as cruise ships.
The recent rebound to $60 per barrel signals a robust fossil fuel world to come as the population gets back to its traditional ways.
... Peak Demand theory existed before the Pandemic.
One variant was that it was going to happen naturally; the other that that oil usage must be stopped by government mandate in order to ‘save’ the planet.
But the former was ... not a sober look at supply and demand.
... Enter Michael Lynch, Peak Oil slayer.
A few years ago at MasterResource, he wrote “Peak Oil’ is Now Demand, not Supply.”
And recently in Forbes: “Peak Oil Demand, Really? Some Lessons From The Debate Over Peak Supply.”
In a new study, The Pandemic and the End of Oil?, Lynch (and Ivan Sandrea) take on the hyperbole with fact-based, industry-informed logic.
... Summary
Recent months have seen a growing crescendo of claims that a peak in oil demand may be near, or even be past.
Pandemic-related changes in behavior such as working from home are predicted to persist after the emergency ends, and advances in technology are said to make oil-fueled vehicles increasingly obsolete….
[There are] strong reasons for skepticism.
People in post-pandemic China do not show major changes in their behavior, and the increasing demand globally for SUVs implies consumers are not focused on reducing emissions.
Further, battery electric vehicles perform significantly worse than internal combustion engines in key metrics, whereas the previous transition, from horses to cars, was due to major improvements in range, speed and carrying capacity, as well as convenience.
The primary findings:
Many of the forecasts are aspirational rather than predictive, that is, describing what needs to happen to achieve climate goals not what is likely to happen;
Forecasters too often presume transient market events like the pandemic will have permanent effects;
Consumer behavior generally shows little desire for sustainable practices;
The capability of electric vehicles is being exaggerated and their shortcomings downplayed; and
Past transitions do not suggest a peak and decline in oil demand is likely.
The case for a near-term peak in oil demand is certainly more plausible than that of peak oil supply, but its popularity reflects a degree of exuberance that is not warranted by the data.
Conclusion
Past energy transitions have featured new sources of energy that were cheaper and better, where better typically means easier to use.
While battery electric vehicles have some benefits compared to petroleum-fueled vehicles, they are much more expensive and significantly less convenient.
Petroleum has approximately forty times the energy density of batteries, and recharging even with a fast recharger takes five times (longer than) refilling a gasoline tank.
Battery electric vehicle (BEV) range remains both shorter and less certain than for conventional cars.
To date, success for BEVs has required substantial government subsidies implying limited consumer acceptance.
Governments have generally failed when attempting to mandate consumer choice as experiences with bans on alcohol and narcotics have shown, to say nothing of efforts to improve the fuel efficiency of conventional vehicles.
It is possible that heavy spending to subsidize BEV purchases will give them a meaningful market share, but given the current financial difficulties resulting from the pandemic, such spending seems unlikely.
Carbon or petroleum taxes could change consumer behavior but have met strong resistance in the past in the United States, at least.
... the inferior performance and economics of solar power and electric vehicles remain a major obstacle to any significant increase in their market share, especially in a post-pandemic world of constrained budgets and lower oil prices.
The fossil-fuel era is still young.
In a free market, removing special government subsidies will reduce the market share of nuclear, wind, and solar–and increase the market share of natural gas, oil, and coal.
Peak demand will set in for the noncompetitive energies, not the competitive ones."