{"id":63458,"date":"2024-05-10T12:23:51","date_gmt":"2024-05-10T19:23:51","guid":{"rendered":"https:\/\/energi.media\/?p=63458"},"modified":"2024-05-10T12:23:51","modified_gmt":"2024-05-10T19:23:51","slug":"china-blowing-up-opec-alberta-narrative-of-oil-growth-to-2045","status":"publish","type":"post","link":"https:\/\/energi.media\/energi-notes\/china-blowing-up-opec-alberta-narrative-of-oil-growth-to-2045\/","title":{"rendered":"China blowing up OPEC, Alberta narrative of oil growth to 2045"},"content":{"rendered":"

OPEC economists get it wrong not once, but twice by seriously underestimating China<\/h2>\n

A key assumption of the OPEC oil and gas narrative, which is the de facto Alberta narrative, is being blown to smithereens by China. That narrative is supported by economic modelling that in less than a year has already been seriously undermined by the tsunami of clean energy technologies spilling from Chinese factories.\u00a0<\/span><\/p>\n

The OPEC narrative goes something like this. Rich OECD (Organization for Economic Co-operation and Development) countries like the United States and Canada will electrify because their governments can afford to subsidize costly green technologies like electric vehicles and heat pumps. Non-OECD nations, which is most of the world, cannot. Therefore, OECD oil demand will begin falling in the near future, while non-OECD consumption will rise as poorer economies stick with tried and true hydrocarbons.\u00a0<\/span><\/p>\n

As hundreds of millions, maybe billions, are pulled out of energy poverty and aspire to middle class lifestyles, the growth of non-OECD consumption will outstrip the decline in OECD demand.\u00a0<\/span><\/p>\n

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Source: World Oil Outlook 2045, OPEC, 2023.<\/em><\/figcaption><\/figure>\n

OPEC\u2019s World Oil Outlook to 2045 calls for global demand to rise from the current 102 million barrels to 116 million barrels per day. Rather than an existential crisis for oil companies after peak demand in 2030, as the International Energy Agency forecasts, the next three or four decades will be a Golden Age for hydrocarbons.<\/span><\/p>\n

How does the OPEC assumption about non-OECD oil demand hold up? Not well, thanks to China.<\/span><\/p>\n

China\u2019s aggressive clean energy industrial policy<\/b><\/h3>\n

The national government decided 25 years ago that it wanted to dominate clean energy, both making and deploying it. Mission accomplished.
\nRead this column: <\/span>Canadians oblivious to China\u2019s lead in clean energy arms race<\/a><\/p>\n

China has provided huge subsidies to the EV industry for years. Not just automakers, but battery companies and their supply chains. The national and local governments have provided all manner of indirect support, like special \u201cnew energy vehicle\u201d licence plates while restricting gasoline car registrations.\u00a0<\/span><\/p>\n

Now, China\u2019s EV makers are threatening the very existence of the car brands\u00a0 we all grew up with. China is just now unleashing a blitzkrieg of cheap ($10,000 to $20,000) EVs that are well-built with technology that far exceeds what the legacy manufacturers can offer. My interview with Flavio Volpe, president of the Automotive Parts Manufacturers Association, is a must listen or read (a transcript is available).\u00a0<\/span><\/p>\n