Peak oil forecast for 2023, followed by a peak in gas demand by 2034

Friday, 02 November 2018
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Anticipating a speedy energy transition globally, the global classification society DVN GV says upstream players are adapting to this trend by shifting to faster, leaner and cleaner hydrocarbon production techniques. Oil and gas demand is forecast to peak in 2023 and 2034, respectively, prompting upstream players to favour a greater number of smaller reservoirs with shorter life-spans. 

Going forward, operators will favour production from a greater number of smaller reservoirs with shorter life-spans, lower break-even costs and reduced social impact compared to those currently in operation.

“Most easy-to-produce, ‘elephant’ oil and gas fields have been found and are already in production. Smaller reservoirs will likely be harder to explore and develop commercially, said Liv Hovem, CEO, DNV GL – Oil & Gas.

Digital enabled technologies such as directional drilling and steerable drill bits, 4D seismic backed by data analytics and steam flooding, will hence be crucial to ensure that exploration and production is economic and efficient. Future-proof production methods need to adapt to smaller fields with a bigger variety of technical challenges.

Anticipating the world energy mix in the lead-up to 2050, DNV GL predicts peak oil in 2013 – although new oil fields will be needed until at least the 2040. Demand for natural gas, widely seen as the cleanest-burning fossil fuel, is expected to reach a peak before 2035.

Decarbonization, e.g. through carbon capture and storage (CCS), should be widely adopted by the upstream industry, DNV GL says. According to the Outlook, Global warming will likely reach 2.6 degrees Celsius (°C) above pre-industrial levels in 2050.This is well above the 2°C target set out by the COP 21 Paris Agreement on climate change.

By 2050, a staggering 972 gigatonnes of carbon are forecast will be emitted, overshooting the 810 gigatonne budget associated with the target. Hence, Mr. Hovem reminded the upstream industry of its “vital role” in the energy transition, urging the sector to “maintain a sharp focus on decarbonization, sustainable production, cost management, and the need to embrace innovative technologies.” 

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