Extreme Temperature Diary- Tuesday September 28th, 2021/ Main Topic: A Rude Reminder…Oil Will Be King For A Long Time To Come

The main purpose of this ongoing blog will be to track planetary extreme or record temperatures related to climate change. Any reports I see of ETs will be listed below the main topic of the day. I’ll refer to extreme or record temperatures as ETs (not extraterrestrials).😉

Main Topic: A Rude Reminder…Oil Will Be King For A Long Time To Come

Dear Diary. Over the past few years I and many other climate scientists and activists have been heartened by good news coming out of the auto industry. Electric vehicles are beginning to be built en masse and are getting cheaper to manufacture:

As of 2021 many models have crossed the threshold of being cheaper to operate in the long run than their internal combustion engine counterparts. So is the demand for gasoline coming from crude oil going to go down sharply during this decade? Hardly. Driving around my home town of Atlanta as of mid 2021 I only rarely see a Tesla or other EV on the road, which is quite sobering. Most people here will not give up their ICE vehicles because there is not enough money incentive (or tax credit).

The pandemic has put a small kink in the demand for crude, but that’s behind us. Economies have come roaring back in 2021, and so has the demand for oil. I hate to break the news for you folks, but internal combustion engines will be with us for a long time to come unless they are forced off the road once EV factories get up to speed. Here is a reminder from one of my Twitter followers:

The news here isn’t all bad. “Telecommuting” has become a standard business practice thanks to the pandemic, which oil use forecasts are taking into account. Still, it looks like carbon will be pumped into the atmosphere from ICE transportation well into the middle part of thus century.

Here is that refereed to Reuters article:

https://www.reuters.com/business/energy/opec-sees-oil-demand-rebounding-then-plateauing-after-2035-2021-09-28/

September 28, 2021

Energy

OPEC forecasts oil demand rebound before post-2035 plateau

By Alex Lawler

A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

  • Summary
  • Group says oil demand in 2023 to surpass 2019 level
  • Trims 2030, 2045 oil demand forecasts
  • Says global oil demand to plateau after 2035
  • Sees OPEC supply in 2026 still below 2019

LONDON, Sept 28 (Reuters) – Oil demand will grow sharply in the next few years as economies recover from the pandemic, OPEC forecast on Tuesday, adding that the world needs to keep investing in production to avert a crunch despite an energy transition.

The view from the Organization of the Petroleum Exporting Countries contrasts with that of the International Energy Agency, which in a May report said investors should not fund new oil projects if the world wants to reach net zero emissions. read more

Oil use will rise by 1.7 million barrels per day in 2023 to 101.6 million bpd, OPEC said its 2021 World Oil Outlook, adding to robust growth already predicted for 2021 and 2022 , and pushing demand back above the pre-pandemic 2019 rate.

“Energy and oil demand have picked up significantly in 2021 after the massive drop in 2020,” OPEC Secretary General Mohammad Barkindo wrote in the foreword to the report. “Continued expansion is forecast for the longer term.”

OPEC World Oil Outlook 2021

OPEC World Oil Outlook 2021

With oil demand recovering, OPEC and its allies such as Russia – a grouping known as OPEC+ – are unwinding record supply cuts made last year. But there are signs some OPEC+ producers are unable to pump more due in part to a lack of investment, and that has boosted prices. read more

OPEC also lowered its estimates for longer-term oil demand, citing changes to consumer behaviour brought about by the pandemic and competition from electric cars. Global demand is expected to plateau after 2035, the report said.

OPEC World Oil Outlook 2021

OPEC World Oil Outlook 2021

Last year’s report said world oil demand would exceed 2019’s rate in 2022, not 2023. Now demand is expected to reach 106.6 million bpd in 2030, down 600,000 bpd from last year’s figure and 11 million bpd lower than OPEC’s view in 2007 of what 2030 demand would be.

OPEC World Oil Outlook 2021

OPEC World Oil Outlook 2021

Assuming a faster take-up of existing technology, the Accelerated Policy and Technology Scenario, demand could be falling by the 2030s, according to an OPEC chart showing a more pronounced demand drop-off than a similar chart last year.

“Tele/homeworking is becoming a norm for many companies as a result of the pandemic,” OPEC said.

“Long-term oil demand growth will be limited by growing penetration of electric vehicles.”

OPEC Reference and Accelerated Policy and Technology cases

OPEC Reference and Accelerated Policy and Technology cases

UNDERINVESTMENT

Last year OPEC+ agreed record output cuts of 9.7 million bpd, the equivalent of 10% of global supply.

With demand recovering, those barrels are being returned to the market but OPEC said it was essential to step up investment in supplies to avert a future crunch.

Last year upstream oil capital spending dropped by nearly 30% to about $240 billion due to the pandemic.

“It is clear that underinvestment remains one of the great challenges for the oil industry,” Barkindo wrote. “Without the necessary investments, there is the potential for further volatility and a future energy shortfall.”

OPEC sees the demand for its oil rising in the next few years, but rising supply from the United States and other outside producers means OPEC output in 2026 will likely be 34.1 million bpd, below 2019’s level, it said.

The group shifted last year to acknowledging demand would peak one day, after predicting growth for years. This year’s 2045 demand forecast was trimmed to 108.2 million bpd, down 900,000 bpd from last year.

Still, OPEC is upbeat about its future prospects, seeing its market share rising in later decades as competition from non-OPEC producers will wane. OPEC expects U.S. tight oil output, another term for shale, to peak around 2030.

“Oil is still expected to retain its number one position in the energy mix,” Barkindo wrote.

Reporting by Alex Lawler; Editing by Susan Fenton and Alexander Smith

Here is a big “ET” reported on Tuesday:

Here is more climate and weather news from Tuesday:

(As usual, this will be a fluid post in which more information gets added during the day as it crosses my radar, crediting all who have put it on-line. Items will be archived on this site for posterity. In most instances click on the pictures of each tweet to see each article. The most noteworthy items will be listed first.)

Now here are some of today’s articles and notes on the horrid COVID-19 pandemic:

(If you like these posts and my work please contribute via the PayPal widget, which has recently been added to this site. Thanks in advance for any support.) 

Guy Walton “The Climate Guy”

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