Oil Demand Might Peak By 2030 -- McKinsey -- July 6, 2016

As you go through the highlights of the McKinsey analysis, recall the proposal to build a petrochemical plant in North Dakota. These are the highlights of a recent McKinsey study as reported by the Oil & Gas Journal:

• The energy demand growth rate worldwide will slow to 0.7%/year through 2050—30% slower than the firm originally forecast. Energy demand will grow in emerging and developing countries and decline in Europe and North America.
• Chemicals will grow twice as fast as energy demand while demand for light vehicles peaks around 2023.
• Demand for electricity will grow at twice the rate of nonelectric energy. Solar and wind will account for almost 80% of net added capacity and 34% of generation by 2050.
• The fossil-fuel share of total energy will decline to 74% in 2050 from 82% at present. Gas will grow at almost twice the rate of total energy demand, while coal peaks by 2025. Oil demand growth will slow to 0.4%/year.
• Carbon dioxide emissions related to energy will flatten and start to subside about 2035 as efficiency of combustion engines improves, electric vehicles increase in number, and power generation shifts to wind and solar.
• Through 2035, the analysts say, 70% of growth in demand for liquid hydrocarbons will be for petrochemical feedstock.
• But global demand growth for petrochemicals soon will fall to 1.2 times the increase in gross domestic product from the traditional 1.3-1.4 times GDP as mature plastics markets become saturated.
• Increased plastics recycling and improved plastic-packaging efficiency can slow the rate further.
• By 2030, meanwhile, electric vehicles might represent nearly half the new cars sold in China, the European Union, and the US and almost 30% globally, according to a business-as-usual case that for the first time includes adoption of autonomous vehicles and car-sharing.
• “If the market penetration of electric, autonomous, and shared vehicles accelerates oil demand driven by light vehicles could be approximately 3 million b/d lower in 2035 than assumed in the business-as-usual case,” the analysts say. Accelerated adoption of light-vehicle technologies and changing plastics demand together might lower oil demand in 2035 by nearly 6 million b/d.
• “An important result is that oil demand will peak around 2030 at fewer than 100 million b/d in this scenario,” the analysts say.