Peak oil prediction make a comeback, but they are still probably wrong

Fuel Fix:
Standing at the front of a windowless room in downtown Washington last week, the Swiss energy economist Christoff Frei lectured on how the world’s energy sector is about to undergo an upheaval the likes of which has not been seen in a century.

Between the insurgence of electric cars, climate change policy and a host of economic factors, Frei posited the world’s thirst for oil might well peak within the next decade as society gets more and more of our energy from the power grid.

“Electricity is the new oil,” he quipped.

Asked what he was seeing that organizations including the International Energy Agency and Exxon Mobil are not, Frei, who was recently named secretary general of the inter-governmental group World Energy Council, turned coy.

“They do quite a wide range of scenarios,” Frei said. “But don’t quote me on IEA scenarios.”

Peak oil demand theory has quickly become the conversation du jour within the world’s energy corridors, following on from a surprise pronouncement by Royal Dutch Shell CEO Ben van Beurden in Houston earlier this year that their models showed demand potentially peaking as early as the late 2020s.

With so many companies and organizations offering different forecasts – or scenarios, depending on their confidence – predicting the world’s oil needs has become more a matter of art than science.

Economists like Frie argue that the long held correlation that with economic growth comes growth in energy demand is diminishing, as buildings and cars get more efficient and rapidly advancing digital technology allows humans to change their lifestyles. Think ride sharing instead of driving your own car or video conferencing instead of getting on an airplane.
The peak oil artists were wrong when they thought the world was running out of oil and they are probably wrong about the demand side peak oil analysis unless there is some breakthrough in alternative energy and transportation.

Electric cars are still plagued by range issues that make them ill-suited for anything other than short commutes.  Even with some alternative energy getting cheaper, it still lacks the ability to modulate its output to meet changes in demand as fossil fuel does.  I have seen nothing that indicates that either of those problems has been addressed and it is likely to take more than a big battery to do so.


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