The changes taking place in the world energy market are not just a matter of oversupply or the unwillingness of Saudi Arabia to rein in production. Demand has stagnated and in some areas is falling. The fall is unexpected — all the standard projections still cheerfully predict ever rising demand driven by population growth and the spread of prosperity in emerging economies. That assumption, however, begins to look too simplistic. The reality is more complex and, for producers, much more challenging. Forget the old debate about peak oil. Now it seems we are approaching peak energy. The crucial factor in the shift in the relationship between economic growth and energy use is not price but technology. Those thinking of the future should take note of the fact that the obvious gains in energy efficiency and intensity clearly have further to go. As yet we have barely seen the benefits of smart meters and grids, the application of advanced materials and the continuing gains in areas such as fuel efficiency. There is more to come and an obvious target is the amount of energy that is still wasted. Worldwide, population growth continues and in addition there are still well over 1bn people excluded from the world market by poverty. If that number can be reduced, energy demand should grow — but, with OECD demand beginning to fall, the net result could well be that we will see peak global energy demand within the next decade.
FT 11th July 2016 read more »