How can we explain the deep divergence on forecasts of global oil consumption between the Organization of the Petroleum Exporting Countries and the International Energy Agency?
On October 9, the Organization of the Petroleum Exporting Countries (OPEC) published its 2023 World Oil Outlook 2045, which presents its forecasts for oil consumption.
The agency created in 1960 and based in Vienna, representing thirteen states responsible for around 40% of global black gold production, added nothing less than 6 million barrels to its forecasts last year. OPEC therefore forecasts, in 2045, consumption of some 116 million barrels per day.
At the same time, the International Energy Agency (IEA) recently announced, with great fanfare, the historic peak in global oil consumption, at the end of this decade.
Its most optimistic scenario for the required reduction in greenhouse gas (GHG) emissions to address the climate emergency, titled Net Zero by 2050, projects a demand of just over 20 million barrels of oil per day in 2050.
In short, between the two agencies, key players in forecasting future energy demand, we are therefore at almost 100 million barrels per day difference… the equivalent of current consumption (more than 100 million barrels per day)!
Two approaches
Certainly, the two agencies do not have the same approach. OPEC bases its analyzes on forecasts of increases in the population and wealth of countries, particularly those that are developing.
OPEC forecasts a world population of 9.5 billion in 2045, compared to 8 billion currently, a world economy twice as large as today and energy consumption higher by almost 25%.
According to OPEC, all energy sources are expected to grow, except coal, in sharp decline, which would first be replaced by renewable energies and gas.
Oil would remain the world’s main source of energy, driven by increased demand in Africa, Asia, the Middle East and for the transport, petrochemical and aviation sectors.
To support this growth, annual investments of more than $600 billion would be necessary. Its member countries would even increase their share in global oil production, given the expected decline in American production from the 2030s.
As for the IEA, its best-known scenario is based on a non-emitting global economy in 2050. It then analyzes backwards how the global energy picture must be reshaped to get there.
It is in this spirit that it indicated, from 2021, that no new investments in new fossil energy projects should see the light of day to achieve this objective. A message that had a strong impact on the energy and ecology community.
Many have since used this powerful argument to point the finger at oil companies, which despite this continue their investments in production.
This relative optimism from the IEA is based on the increased sales of electric vehicles in recent years and the significant breakthrough in green energies (batteries, wind, solar) over the past ten years.
Towards the end of oil… or not?
Renewables already occupy 5% of the global energy portfolio, whereas this proportion was infinitesimal just ten years ago. They will be the energy source that is expected to grow the most, by far, in the next thirty years.
In 2050, according to the IEA, for a carbon-free world, wind and solar power, despite their intermittent nature, will have to be the source of 70% of all electricity produced in the world.
If this happened, it would be a profound, absolutely historic revolution in the energy and industrial fabric on a global scale.
However, apart from the analysts who have the leisure to look into all these major nuances, the speeches made by these two agencies take far too opposite directions not to create a lot of confusion.
This divergence creates dissonant echoes among decision-makers, in the media and in the general population. People no longer know whether we are definitely witnessing the end of oil or, on the contrary, its progression, certainly slower, but upward.
A situation which risks leading to opposing visions of our energy future, contradictory expectations, harmful to the concerted efforts necessary for a successful transition.