July 19, 2019

Off the Charts: Oil Supply Is Rising, but Demand Keeps Pace and Then Some

Well, standards of living are improving in developing countries, but the dire forecasts now appear to be wrong. In part that is because new discoveries and improving technologies have increased the amount of oil that can be produced. It also reflects conservation, in part, as cars become more efficient and as other steps are taken to reduce oil use.

The International Energy Agency, in its 2012 World Energy Outlook, released last week, forecast that American oil production, which began to rise in 2009 after decades of decline, would continue rising through at least 2020, when it could be about as high as it was in 1970, the year of peak production.

At the same time it forecast that by 2035, American oil consumption, which peaked in 2005, could decline to levels not seen since the 1960s, depending on how much conservation is encouraged.

The I.E.A. report also forecast that by around 2020, the United States could surpass Saudi Arabia as the world’s largest oil producer, and that while the country was not likely to become a net exporter of oil, the North American continent as a whole could be by around 2030.

But despite declining demand in some countries that historically were heavy users of oil, the world demand for oil seems likely to continue to rise. The I.E.A. forecast that global energy demand — including demand for energy produced by other sources — is likely to rise by 35 percent by 2035, with a large part of the increase coming from China and India.

In 1969, the United States consumed a third of the oil used in the world, while China used less than 1 percent. Last year the United States’ share was less than 22 percent, while the Chinese accounted for 11 percent. The I.E.A. forecasts that by 2030, the American share could be less than the Chinese one.

By 2035, American consumption of oil is expected to be as much as one-third less than it was last year. In China, oil consumption is expected to be up as much as two-thirds from the 2011 level, and India’s is predicted to more than double.

The accompanying charts show trends in oil consumption in the United States, Japan, China and India, as well as in the other major economies — defined as the 32 countries other than Japan and the United States that are in the Organization for Economic Cooperation and Development. In each chart, the oil consumption in 2011 is shown as 100 percent, and the amount of oil used in that year is shown.

For each area, two forecasts are shown. One is based on the assumption that current policies will continue. The other, labeled “new policies” by the I.E.A., assumes that countries will gradually keep promises they have made to encourage conservation — promises that in the United States include increasing fuel economy in cars and trucks and at least a small increase in the use of natural gas to fuel trucks. The I.E.A. says that if those promises are kept, oil prices in real terms are likely to be only a little higher than they are now; if current policies continue, the price is likely to rise more rapidly.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2012/11/24/business/economy/oil-supply-is-rising-but-demand-keeps-pace-and-then-some.html?partner=rss&emc=rss

Speak Your Mind