It's the beginning of the end for global oil demand, IEA chief says

Phil Rosen

The International Energy Agency's latest projections suggest global demand for the three primary energy sources — oil, gas, and coal — will peak this decade.

In a column published in the Financial Times, Fatih Birol, the executive director for the IEA, posited that "the age of seemingly relentless growth" for fossil fuel demand is at the beginning of the end.

"Based only on today's policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years," Birol wrote.

"This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated."

A peak in energy demand also means a peak in greenhouse gas emissions, the executive explained. The boom in clean energy technologies, including electric vehicles, will usher in a more energy-efficient era.

China, for one, has undergone structural shifts, with policymakers dedicating more resources to renewable and nuclear power. That, in addition to a slowing economy, point to softer coal demand for the world's largest coal consumer, according to the IEA.

"The 'Golden Age of Gas,' which we called in 2011, is nearing an end, with demand in advanced economies set to fall away later this decade," Birol said.

"This is the result of renewables increasingly outmatching gas for producing electricity, the rise of heat pumps and Europe's accelerated shift away from gas following Russia's invasion of Ukraine."

Additionally, the declines in demand won't be linear.

To be sure, the forecasted declines in oil, gas, and coal demand still won't be enough to limit global warming to 1.5 degrees Celsius, in the IEA's view.