Peak Oil Demand: The Role of Fuel Efficiency and Alternative Fuels in a Global Oil Production Decline

Some
argue that peak conventional oil production is imminent due to physical
resource scarcity. We examine the alternative possibility of reduced
oil use due to improved efficiency and oil substitution. Our model
uses historical relationships to project future demand for (a) transport
services, (b) all liquid fuels, and (c) substitution with alternative
energy carriers, including electricity. Results show great increases
in passenger and freight transport activity, but less reliance on
oil. Demand for liquids inputs to refineries declines significantly
after 2070. By 2100 transport energy demand rises >1000% in Asia,
while flattening in North America (+23%) and Europe (−20%).
Conventional oil demand declines after 2035, and cumulative oil production
is 1900 Gbbl from 2010 to 2100 (close to the U.S. Geological Survey
median estimate of remaining oil, which only includes projected discoveries
through 2025). These results suggest that effort is better spent to
determine and influence the trajectory of oil substitution and efficiency
improvement rather than to focus on oil resource scarcity. The results
also imply that policy makers should not rely on liquid fossil fuel
scarcity to constrain damage from climate change. However, there is
an unpredictable range of emissions impacts depending on which mix
of substitutes for conventional oil gains dominanceoil sands,
electricity, coal-to-liquids, or others.