Demand For Fossil Fuels Is Finally Declining?
In its recently released World Energy Outlook report, the International Energy Agency detailed findings that suggest global demand for fossil fuels will reach its peak sometime in the 2030s.
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Conversations about climate change, fossil fuels, and clean energy dominate the news cycle currently. And it is not surprising. Companies are making tremendous progress in efforts to transition away from traditional energy sources.
And many international think tanks and scientific research groups are putting significant energy into studying the issue. One of those organizations is the International Energy Agency (IEA). It is an independent organization that promotes conversations about energy cooperation on a global scale.
Eight association countries and 31 member countries make up the international body. The organization was born out of the oil crisis in the early 1970s. And it primarily focused on the security of fossil fuels until recently.
However, in 2015 they approved a strategy to modernize. That year the IEA “endorsed the focus on creating a more inclusive and truly global agency through closer engagement with emerging energy economies.” And today, they play a large part in the conversation around shifting from fossil fuels to renewable energy.
On Thursday, the IEA released its annual World Energy Outlook report. The analysis gets broken into three sections. The first section explores the necessary steps to achieve global net zero emissions as soon as 2050.
The second looks at what the future would look like if countries met their current climate pledges. And finally, the IEA examines potential future energy needs based on current government policies. This latter section predicts that “global demand for all types of fossil fuels will peak by the mid-2030s,” according to NPR.
Additionally, the report suggests that the war in Ukraine will help accelerate the shift to renewable energy. Fatih Birol, IEA’s executive director, says, “ten years from now, I believe we will see that 2022 was the year where the clean energy technologies see a major turbocharging.” And that conclusion is good news to many climate activists.
NPR spoke with a fellow at Resources for the Future, named Daniel Raimi. He is confident in the IEA reports. Raimi told the news outlet, “we are not close to there, but we are moving in the right direction.”
However, others are more skeptical. The founder of Rapidan Energy Group, Bob McNally, soundly dismissed the projections. He said, “while it’s perhaps a pleasing idea that the world is going to see a peak in fossil fuel consumption in the next five to 10 years … there’s no evidence for it.”
According to McNally, the estimates of future demand for fossil fuels are unrealistic. And he attributes that in large part to a skepticism that governments will follow through on their promises. He is also adamant that “nobody I know in the oil business believes that.”
The IEA, for its part, believes the world’s governments are taking steps in the right direction. It applauds the clean energy pushes in India, China, and Japan. Additionally, the group supports many provisions in the recently passed Inflation Reduction Act in the U.S.
These actions are what prompted the analysis in the third section of the Global Energy Outlook. It is the first time that the predictions on demand for fossil fuels show a possible peak. And if that does happen, a decline in demand could soon follow.
