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Message: Global demand for oil could be reduced by 2035
Global demand for oil could be reduced by 2035 as biofuels and energy efficiency increase - Source
A multi-client funded study recently conducted by Ricardo Strategic Consulting suggests that increased consumption of biofuels combined with the implementation of more fuel-efficient vehicles could actually reduce the global demand for oil to fewer than 87 million barrels per day by 2035. Biofuels, revolutionary changes in vehicle technologies and other factors could lead to a peak in oil demand by 2020, followed by a long-term decline down to below the 2010 level of approximately 87 million barrels per day within 25 years, according to the firm’s research.
“The drivers working against oil demand growth are increasing in number and intensity, with the world’s consuming nations increasingly focused on their need to reduce their dependency on oil, supported by an ever stronger legislative framework,” Peter Hughes, managing director of Ricardo’s energy practice, stated. “Over the past few years a near ‘perfect storm’ for oil demand has been forming and gathering strength, created by a preoccupation in many quarters about the availability of future supplies.”
Kevin Lindemer, co-director of the study, said the research focused on two aspects: oil consumption demand and crude oil demand. Increasing the use of biofuels was not found to affect consumer demand for fuel but the study suggested biofuels use would reduce the demand for crude by more than 10 percent below the 2010 baseline, assuming that those fuels make up 30 percent of the transportation fuel mix in 2035. Lindemer said current limitations to biofuels use, including vehicle engine tolerance, were considered in the research, but it was assumed that these issues would be overcome in time. “We treated them as issues that need to be addressed and changed,” he said.
The study also took into consideration the incorporation of other biofuels produced using sugars and starches over time as technologies become economically viable. “We weren’t assuming that biofuels are just ethanol or just biodiesel,” Lindemer added.
Fuel efficient technology and more stringent standards will also play a significant role in reducing demand for petroleum, the study found. While the world’s vehicle fleet is expected to increase by more than 80 percent over the coming 25 years, the study found that efficiency improvements should more than offset the rise in fuel demand. Source; Black Sea Grain
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