{"id":61505,"date":"2023-12-30T09:41:13","date_gmt":"2023-12-30T17:41:13","guid":{"rendered":"https:\/\/energi.media\/?p=61505"},"modified":"2023-12-30T10:14:28","modified_gmt":"2023-12-30T18:14:28","slug":"chinas-peak-oil-demand-bombshell-eviscerates-danielle-smiths-energy-strategy","status":"publish","type":"post","link":"https:\/\/energi.media\/markham-on-energy\/chinas-peak-oil-demand-bombshell-eviscerates-danielle-smiths-energy-strategy\/","title":{"rendered":"China\u2019s peak oil demand bombshell eviscerates Danielle Smith’s energy strategy"},"content":{"rendered":"

Time to reconsider Smith’s dangerously inept Emissions Reduction and Energy Development Plan<\/a>?<\/strong><\/h2>\n

China has dealt a serious political blow to Alberta Premier Danielle Smith. On Thursday, the country\u2019s largest refiner, state-owned Sinopec, <\/span>released<\/span><\/a> its latest long-term energy forecast. Oil demand is now expected to peak in just a few years, not in 2045 as OPEC has predicted. Sinopec\u2019s announcement calls into question Alberta\u2019s energy strategy, which is based upon growing global oil and gas consumption to 2050.<\/span><\/p>\n

Smith has been a vocal supporter of the \u201cslow energy transition\u201d narrative promoted by Saudi Arabia and other Middle Eastern oil-producing countries.\u00a0<\/span><\/p>\n

At the World Petroleum Congress, hosted in September by Calgary, the Premier lambasted the International Energy Agency (IEA) for forecasting global peak oil demand by 2030. At a September 18 press conference, she accused the IEA of abandoning its 50-year old role of \u201cdoing predictions\u201d and instead indulging in \u201cpolitical advocacy.\u201d Smith praised Saudi leadership in her remarks.<\/span><\/p>\n

\u201cI feel like we’re going to be in a bit of a technological and innovation race with Saudi Arabia, and I think we heard that from the [Saudi] energy minister this morning,\u201d she told reporters. \u201cHe intends to lead the world in this and he is challenging the rest of us to keep up. Alberta wants to keep up.\u201d<\/span><\/p>\n

Saudi Arabia is the leader of OPEC, the oil cartel that has been cutting production by millions of barrels per day to prop up prices during a softening of the international economy. The organization <\/span>released<\/span><\/a> its oil forecast a few weeks after the World Petroleum Congress. The report predicts continued growth of oil consumption to a peak of 116 million barrels per day by mid-century, up from 100 million barrels per day in 2022.<\/span><\/p>\n

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Source: World Oil Outlook 2045, OPEC.<\/em><\/figcaption><\/figure>\n

China plays a prominent role in World Oil Outlook 2045. The world\u2019s second largest oil consumer is forecast to use 18.8 million barrels per day by 2045, an increase of four million barrels per day from 2022 levels.\u00a0<\/span><\/p>\n

Sinopec\u2019s report estimates that demand will peak at 16 million barrels per day between 2026 and 2030. The China National Petroleum Corporation <\/span>thinks<\/span><\/a> Chinese gasoline demand will peak in 2025, followed soon after by diesel, and then shrink 2.3 per cent annually between until 2030.\u00a0<\/span><\/p>\n

The cause of China\u2019s peak oil demand is the more rapid than expected electrification of transportation. In the third quarter of 2023, 38 per cent of passenger cars sold in China were electric. The country has already switched most of its bus fleet to electric (approximately 600,000 in service) and almost half of two and three-wheelers, an important mode of transport in Asia, are electric.\u00a0<\/span><\/p>\n

Sinopec credits China\u2019s \u201cdual carbon\u201d energy strategy for peaking oil demand. Readers can listen to the Energi Talks podcast interview (below) in which Eurasia Group analyst Herbert Crowther explains President Xi Jinping\u2019s plan to massively boost renewable energy and electric technologies (e.g. EVs, heat pumps) while slowing use of fossil fuels.<\/span><\/p>\n