Head of the IEA Fatih Birol states that the world is nearing peak demand for fossil fuels. Article is currently free to read.
The world is at “the beginning of the end” of the fossil fuel era, according to the leading global energy watchdog, which for the first time has forecast that demand for oil, natural gas and coal will all peak before 2030.
paywalled. What’s the support for the argument?
Basically, massive investment in renewables due to the war in Ukraine and increasing use of electric vehicles. Also, a big percentage of fossil fuel growth has been in China, which is shifting towards less energy intensive industries, and greatly accelerating development of renewable energy.
The mass media insists on framing the issue as one of peak demand. Demand for inexpensive energy seems rather limitless to me. I’ll assume that what they are saying is that peak production of fossil fuels is imminent. According to the geeks at the Peak Oil Barrel, “total liquids” production peaked in late 2018, but may reach a higher level in about five years. In general, total liquids production has reached a plateau that has lasted about a decade.
I have always considered peak oil consumption to be the most important factor versus peak demand or peak production. If peak oil consumption occurs in 2025 or before then I win a bet with albaby.
I suppose the most important metric would be global radiative forcing from greenhouse gas emissions and land use changes. I don’t see that peaking anytime soon.
DB2
Yeah, I may have used the wrong term there. However, production and consumption are about the same. By the way, how would you know consumption peaked?
You have a good point. I depend on oil companies and national sources to provide consumption numbers. I could same the same about production knowing when production peaked - again we depend on data provided by others.
Yes, this. But if you can shoift demand to other sources which are cheaper - lots cheaper - then maybe it will come to pass.
I doubt that is true and for a couple reasons. The easiest is “steel”. Steel is the harbinger of every advanced nation, used for infrastructure - roads and railroads - and for consumer goods - and for military - and, well, everywhere.
Here’s a historical chart for steel, video enabled. Keep your eye on China and India. China because of how fast they grew in the past 20 years, India because they have as much population than China and (some) are making noise about climbing out of their decades-long miasma of poverty.
Also interesting, of course, is Japan’s ascent (and the collapse of the US industry) in the 80’s, (I lived in Pittsburgh) and what happened in the run up to WW2.
Anyway, you can’t make steel in quantities enough to matter without coal and coke. You could if you had enough electricity, but then good luck with that in a country without the infrastructure to start with. You need fossils to build Steel at anything but low speed, and other energies aren’t going to do it.
Steel isn’t the only things, of course, but it leads to so many others: automobiles (and fossil fuel to power them), home appliances, and so on.
Over the last 5-10 years, I’ve been convinced that copper is now one of those things. I expect it to increase exponentially as electrification proceeds at a faster rate. That’s why I began invest in copper over recent years. At first I bought individual companies, but gave up on that and instead simply bought a copper ETF (COPX) and keep buying on dips as they present themselves.
It’s funny, for the first 40 years of my investing life, I never bought commodity related companies, and now in retirement I an increasingly doing so.
I couldn’t find the original post, and my memory ain’t what it used to be - but didn’t we agree on a particular reporting agency and website? I genuinely can’t recall…
I don’t recall either. All I remember is that I predicted peak consumption of oil would occur in 2025 (or before 2025).
Was it “oil” or “fossil fuels”?
It was oil oil oil !
What was the table you posted?
DB2
The steel production video is really cool but does not come to the present day. China is falling back.
We can the Soviets surge and fail.
The key ingredient for the superpowers of size, the three nations, is decision-making.
The US can outlast Russia and China. Russia and China die by a thousand self-inflicted cuts.
A very smart man can not make decisions for an entire country. Xi? Smart? Is he sharing power yet? No? Then he is another ejit on the bus.
Last week saw two major milestones in the global effort to make steel production less damaging to the climate. Boston Metal raised $262 million of venture funding for its electricity-based steel- and metal-making technology, while Sweden’s H2 Green Steel assembled €1.5 billion in equity to build its first plant that will use hydrogen to create steel.
Decarbonizing steel will be difficult and costly, and if done at meaningful scale will remake one of the world’s biggest industries. Steelmaking is responsible for about 8% of energy sector emissions, and today, producing a ton of steel results in nearly two tons of CO2 emissions.
One way to understand this critical challenge is to look at it in through numerical scales, from smaller to larger.
Start with thousands — or really, just one thousand. Global Energy Monitor counts 1,016 steel plants in 89 countries that combined have an annual capacity of 3 billion tons. That’s barely 7% as many steel plants as there are coal-fired power plants in the world, and a far cry from the more than 1 billion automobiles on roads today. Quantifying emissions from this group is doable, and the addressable market for steel decarbonization technologies is clearly defined.
The second scale to look at is millions. Boston Metal’s series C round will not go to building a series of full-scale production plants, or even one: Instead, the company will spend it on growing its team and demonstrating its technology commercially. Hundreds of millions of dollars, in the steel sector, are a starting point at achieving scale, not an end point.
Next comes billions. H2 Green Steel’s private placement from at least 15 investors will go toward a large-scale production plant. That equity capital is not all that will be needed, though; the company has also gotten commitments for more than €3.5 billion in debt financing. While H2 Green’s production plans are ambitious, they’re not on the same scale: It aims to produce 5 million tons of steel by 2030, which would be a sliver of the output of the entire sector. In 2021, the world’s steelmakers produced 1.95 billion tons, double as much as just two decades earlier and more than 10 times the global amount made in 1950. H2 Green’s production goal would not rank it within the top 50 steel producers by volume in 2021.
These numbers hint at the scale of capital required to transform today’s steelmaking into a lower-carbon industry. Deploying any new technology widely enough to make a dent in steelmaking emissions will require trillions of dollars of investment. And that is just the funding needed for capital expenditure.
At this still-early stage for H2 Green Steel and Boston Metal, capital commitment is evident. Some of the world’s biggest private equity and infrastructure investors are in both deals, as are some of the largest iron ore producers, fuels producers and steelmakers themselves.
Leveling up that commitment to the trillions will require much more — not just from the industry but from everyone else. Policymakers must provide long-term investment incentives and build a bridge from today’s innovations to tomorrow’s standards. Asset managers will need to allocate capital to companies that hold the express goal of decarbonizing an essential sector. Industrial consumers need to have an appetite for steel products that perform the same, but are made differently.
Ordinary consumers will need to support innovation, too. Fortunately there are billions of people who buy steel or products made with it, and we all stand to benefit from its decarbonization.
It is very competitive. It uses all grades of ore and no carbon/coal.
The issue the industry has been stodgy, and set in its ways.
This was a Donald Sadoway MIT Material Sciences idea. It has been slow to get up and running. The big slowdown was figuring out how to keep the anode from corroding under the heat and pressure. A film was found for the anode that would keep the hot steel off the anode.
Do you have any cost comparisons?
For example, from last year:
https://www.spglobal.com/commodityinsights/en/market-insights/blogs/metals/051922-green-steel-china-decarbonization-dri
"Carbon-free steel refers to the production of one metric ton of steel that emits less than 0.5 mt of CO2, which means steelmaking in blast furnace-converter route will need to cut its carbon emissions by over 80%…
“Production costs will soar, requiring more than $150/mt extra to produce iron, compared to iron that comes from conventional blast furnaces, according to Baosteel data…”
DB2
