- Oil demand to fall to 21 million barrels per day in 2050
- Pivot towards gas could provide a lifeline for Big Oil
Oil consumption is unlikely to return to its 2019 peak if emissions are to hit net-zero by 2050, despite a scale-up of carbon capture and storage technologies, according to BloombergNEF’s New Energy Outlook 2021 (NEO).
In NEO’s Gray Scenario – a CCS-led pathway to net-zero emissions – oil consumption plunges to 21 million barrels per day in 2050, around a fifth of its 2019 peak. CCS technologies are suited to stationary energy applications rather than sectors like road transport, which comprised 44% of oil demand in 2019. Intense electrification of the transport sector therefore leaves little remaining appetite for oil.
While some oil majors such as Royal Dutch Shell are positioning themselves as ‘Big Energy’ companies, others are investing more heavily in CCS to lower their emissions. In order to fulfil this strategy, they may need to pivot more towards gas.
Demand for gas could peak in 2027, but thanks to CCS deployment in power and industry, it will only be 5% below this level in 2050, making it the least-affected fossil fuel.
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