Home » Experts Think ‘Peak Oil’ Could Be Here As Soon As 2030

Experts Think ‘Peak Oil’ Could Be Here As Soon As 2030

Peak Oil Gaph
ADVERTISEMENT

One of the quirks of modern life is that there’s almost nothing less controversial than talking about the weather, and nothing more controversial than talking about the climate. The extremely important COP28 Climate Conference is going on right now in Dubai and the big topic is climate, transportation, and just how far electric cars can take us.

If you love talking about energy you’re going to love this installment of The Morning Dump. I want to look at some of the new assumptions undergirding the world as it meets to discuss ways to prevent an environmental apocalypse. I’ll also explore, a bit, the way banks have to think about this.

Vidframe Min Top
Vidframe Min Bottom

And, finally, even if you don’t believe global warming is all that bad, one of my favorite thinkers in the energy space has a paper out on the economic/security risk of oil dependence.

Not to be crude, but let’s freakin’ do this.

Can EVs Get Us To Peak Fossil Fuel Usage In 2030?

Byd Exterior Rear

ADVERTISEMENT

I suppose 2030 isn’t that far away. It’s about as close as 2018, which is hard to fathom. The world keeps consuming more energy as it grows but, with temperatures also climbing, the world is also considering where to source that energy.

The International Energy Agency (IEA) is a large, quasi-governmental group formed by a bunch of non-OPEC countries (specifically, OECD countries) in response to the 1973 Oil Embargo, which itself followed multiple armed conflicts between Israel and its neighbors.

It’s an imperfect organization, but the group has produced a number of reports in advance of COP28 that policymakers will be referencing, so let’s take a look.

In particular, the recently released “World Energy Outlook” looks at the Paris Agreement and attempts to find out how close the world is to the agreement’s stated goal of limiting “global warming to 1.5°C” which means “greenhouse gas emissions must peak before 2025 at the latest and decline 43% by 2030.”

According to the report, things are improving, but not fast enough and we’re not going to get there until we can triple global renewable power capacity, double the rate of energy efficiency improvements, and do a bunch of other things.

ADVERTISEMENT

One bright spot in the report is that peak fossil fuel use for transportation and energy might come sooner than you’d guess. This is the “good” way we reach Peak Oil, by reducing demand. The “bad” way is by maintaining demand (or increasing it) and running out.

“A legacy of the global energy crisis may be to usher in the beginning of the end of the fossil fuel era: the momentum behind clean energy transitions is now sufficient for global demand for coal, oil and natural gas to all reach a high point before 2030…”

As you can see in the paragraphs above, a lot of this is based on China, where there’s both a slowing economy and a boom in electric cars and solar/renewable energy, though advanced economies like the United States and Germany also play a key role.

Still, it’s not happening quickly enough. Again, from the report:

The key actions required to bend the emissions curve downwards to 2030 are widely known and in most cases very cost effective. Tripling renewable energy capacity, doubling the pace of energy efficiency improvements to 4% per year, ramping up electrification and slashing methane emissions from fossil fuel operations together provide more than 80% of the emissions reductions needed by 2030 to put the energy sector on a pathway to limit warming to 1.5 °C. In addition, innovative, large-scale financing mechanisms are required to support clean energy investments in emerging and developing economies, as are measures to ensure an orderly decline in the use of fossil fuels, including an end to new approvals of unabated coal-fired power plants.

This was all a prelude to COP28, so how’s that going?

COP28 President Says Ending Fossil Fuels Will “Send Us Back To The Caves”

Cop28
Source: COP28

Oops. On the verge of COP28 starting, the conferences’s president, the UAE’s Sultan Al Jaber (this guy!), said some things that didn’t exactly please everyone.

ADVERTISEMENT

Here’s The Guardian with the scoop:

The president of Cop28, Sultan Al Jaber, has claimed there is “no science” indicating that a phase-out of fossil fuels is needed to restrict global heating to 1.5C, the Guardian and the Centre for Climate Reporting can reveal.

Al Jaber also said a phase-out of fossil fuels would not allow sustainable development “unless you want to take the world back into caves”.

The comments were “incredibly concerning” and “verging on climate denial”, scientists said, and they were at odds with the position of the UN secretary general, António Guterres.

Oh boy.

Everyone is still going forward, and Dan Jorgensen, the Danish climate minister, rose to Al Jeber’s defense. From Bloomberg:

“At none of the many meetings and talks we have had has he ever spoken against a science-based approach to climate change and never denied the science,” Jorgensen said. “On the contrary, he has said that the phase-down and the phase-out of fossil fuel is inevitable. In fact, it is essential. Let that guide our further negotiations.”

The actual language of an agreement on fossil fuels to come out of COP28 is still up in the air but the Bloomberg report also includes a lot of support from various sides for the tripling of renewable energy and more investment in new technologies.

What Role Do Banks Play In All This?

Cop28 Panel
source: COP28

Speaking of investment, there’s a lot of pressure on banks and financial institutions to account for how much money they’re pouring into companies that increase global emissions. Specifically, transportation is a huge contributor, but how do you count it?

ADVERTISEMENT

Ahead of COP28, S&P Global Mobility put out an interesting report that suggests some possibilities:

Properly calculating vehicle emissions requires three key steps: estimating Well-to-Wheel (vehicle lifetime) emissions, projecting manufacturer-level emissions projections, and conducting portfolio-level analysis.

Step 1: Estimating Well-to-Wheel (Vehicle Lifetime) Emissions: Well-to-Wheel emissions are typically broken out into Well-to-Tank (fuel extraction, processing, and transportation) emissions and Tank-to-Wheel (combustion) emissions. Calculating Well-to-Tank emissions includes the upstream CO2 production for gasoline (including extraction, refinement, and shipping) and electric (including mining extraction, charging needs and grid emissions) vehicles. Next, calculating Tank-to-Wheel emissions requires projecting vehicle lifetime mileage and vehicle CO2 production per mile for each vehicle type in the bank’s portfolio, from ICE to hybrids to battery electric vehicles. This information should be calculated on vehicle Tank-to-wheel emissions by make, model, and powertrain combinations, accounting for geography and usage.

Step 2: Calculate Manufacturer-Level Emissions Projections. By using the vehicle-powertrain level well-to-wheel emissions, the bank should project create manufacturer-level average emissions by year of production for each major vehicle manufacturer. These projections should extend to 2050 to align with various international net-zero agreements.

Step 3: Calculate Financed Emissions and Set Net-Zero Goals. Armed with forecasted emissions for each major vehicle manufacturer, banks and financial institutions can estimate the vehicle emissions financed by their automotive portfolio, and set clear, informed 2030 and 2050 emissions targets and identify paths to net zero.

This is super nerdy, but I’m into it.

Verleger: Let’s Stop Letting Oil-Producing Terrorize Us

Intleconomy

I’ve linked to energy pundit/economist/consultant Phillip Verleger, Jr’s stuff before and I’m glad I’ve got a reason to share his latest paper in the Fall 2003 issue of The International Economy Magazine (like Mad Magzine but with better cartoons)

He’s got a link to the whole thing right here. As always, I’ll pull out some highlights. His main point is that there are a bunch of legacy industries trying to maintain our dependence on oil and natural gas which, even if you don’t buy the environmental stuff, is a huge threat to our economy.

ADVERTISEMENT

Fifty years ago, in 1973, OPEC launched a five-month embargo on oil sales to countries that supported Israel after the Yom Kippur attack by Egypt and Syria. Oil prices skyrocketed, and the global economy entered a period
of contraction. Events since 1973 have demonstrated that, during wars and revolutions, oil markets and now natural gas markets are subject to extreme fluctuations that have serious economic impacts.

When war broke out between Iran and Iraq in 1980, spot oil prices rose by almost 100 percent. The increase worsened the global recession already started by U.S. monetary tightening.

And then, of course, 50 years later we’re now seeing another conflict in the Middle East though, this time, we’re less dependent on OPEC and its oil.

While it’s important for the government to invest in alternative fuels, he argues, the government also does a bad job of picking winners. Instead of just giving money to research, Verlger says the government should also work to remove regulatory blocks:

Far greater success in innovation occurs when governments remove regulatory barriers to entry and allow new ideas and companies to flourish. Here, the lesson from the telecommunications industry is important. It was the Federal Communications Commission’s decision to force AT&T to open its network connections to devices built by firms outside the AT&T family that gave the cellular phone industry the opportunity to grow, culminating in Apple’s phenomenal success. More recently, the ability to play videos on phones, tablets, and other devices through internet sources such as YouTube has broken the monopoly of the cable television industry and major television networks.

The whole thing is a good read.

The Big Question

Do you think we’ll reach peak fossil fuels by 2030? If so, how? If not, why not?

Top Image: IEA. Licence: CC BY 4.0

ADVERTISEMENT
Share on facebook
Facebook
Share on whatsapp
WhatsApp
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Subscribe
Notify of
150 Comments
Inline Feedbacks
View all comments
Karl Jacobs
Karl Jacobs
2 months ago

Sigh…

Let me make it simple. EVs need to be practical, and affordable. That largely means access to charging. EV’s are still a rich person’s game, where you can afford the car, and the home so you can have home charging.

To make EV’s viable, the family living in low-income housing needs to be able to afford the car, AND have access to charging at their apartment.

It’s much like the farce of HOV lanes in CA, that are all being converted to “FastPass” where only the rich can afford to use HOV lanes.

Dinklesmith
Dinklesmith
2 months ago

Seeing how climate change has been politicized and how the dyed in the wool conservatives are entrenching themselves like they did with masking and vaccinations, I don’t hold out hope that we will succeed with climate change. Some people are just too selfish to want to make the world a better place

CRM114
CRM114
2 months ago
Reply to  Dinklesmith

It’s this holier than thou attitude that has caused the polarization.

Dinklesmith
Dinklesmith
2 months ago
Reply to  CRM114

Climate change is real whether or not someone believes the oil propaganda. Is it holier than thou or is it frustration?
Is it the attitude making people resist the change or is it just selfishness and looking for someone to blame to give you guys an excuse to not do anything

CRM114
CRM114
2 months ago
Reply to  Dinklesmith

You guys? I daily an EV and I’ve been vaccinated for covid 4 times. I’m just not an arrogant left-winger who thinks they’re better than everyone else because they have a car that won’t do anything substantial for climate change and they got moderately effective vaccinations for a mildly dangerous virus. Your obnoxious us vs. them garbage is where the polarization in this country came from. You are not better than them, you’ve just deluded yourself.

Dinklesmith
Dinklesmith
2 months ago
Reply to  CRM114

My friend, I am but one person. I cannot stop climate change by myself. But I am still one person and I can do my part.
The real question is, why aren’t you? We face a global crisis and you stand by and do nothing, giving nothing but excuses. I’m not better than anyone else, but at least I can take pride in my morality.

CRM114
CRM114
2 months ago
Reply to  Dinklesmith

Enjoy the holier than thou attitude.

Scott Wangler
Scott Wangler
2 months ago

Predictions of peak oil have been around a century and they are always wrong. You know how hard it is to guess wrong that many times??? Just stop.

Elons Backdoor Musk
Elons Backdoor Musk
2 months ago

Peak oil is the scientific equivalent of flying cars.

Perpetually just around the corner.

Marathag
Marathag
2 months ago

I found an article from Scientific American, I believe from around 1919 about Peak Oil.
So yeah.

...getstoneyII
...getstoneyII
2 months ago

`

Last edited 2 months ago by ...getstoneyII
150
0
Would love your thoughts, please comment.x
()
x