Oil Demand to Peak in 2023

Within 20 years, oil use will have long since peaked, renewables and natural gas will account for about half of energy supply and the cost of keeping the lights on will plummet.  But that still will not be enough to meet climate goals, according to a forecast from energy and maritime services company DNV GL Group AS.

Even with crude oil demand expected to fall from 2023 and total energy consumption over the globe to peak 12 years after that, the world will probably warm 2.6 degrees Celsius, DNV said.

That is 0.6 degrees above the level that scientists say the world will need to stay beneath to avoid catastrophic climate change, which could impact the Earth’s habitability, Bloomberg reported.

"To achieve climate targets, regional and national governments would need to implement programs that make greenhouse gas pollution more expensive, among other measures. That would improve the profitability of ventures like carbon capture and storage and hasten the uptake of renewables," DNV GL Chief Executive Officer Remi Eriksen said in a phone interview. “Even with this rapid transition with quite a rapid pace, some would say, it is not enough. So more is needed,” Erikson said from the company’s headquarters in Hovik, Norway.

It is not all bleak. The electrification of the energy system is happening faster than DNV previously forecast. Power use is set to more than double by the middle of the century, meeting 45% of global energy demand. Most of that power will be generated by wind and solar energy, where technological advances are rapidly reducing installation costs.

Additionally, energy spending will shrink as percentage of gross domestic product over the same period.  In 2050, only 3.1% of GDP will be spent on energy, down from 5.5% in 2016. Gains in efficiency will account for most of the decline, as an electricity-based system inherently has less waste than ones built on coal or wood.