Five key takeaways from OPEC’s 2045 oil outlook
Oil pumping rigs are situated next to a vineyard of table grapes as viewed on July 8, 2021, north of Bakersfield, California.
George Rose | Getty Images
The Organization of Petroleum Exporting Countries rolled out an opus Tuesday: its “World Oil Outlook 2045.”
Clocking in at a Texas-sized 340 pages, it’s not the easiest of reads, but helpfully the good folks in Vienna tossed us a 30-page Executive Summary as well as an interactive edition.
Whatever OPEC says about oil, oil demand, the future of cars and everything else fossil fuel-related is going to be discounted, if not openly mocked, given that the organization is one of petroleum-exporting countries. It’s not the renewables-exporting countries, although OREC has a certain ring.
Still, the group and its researchers did a great job of putting together a lot of data, information and projections. During my trips to OPEC headquarters in Austria, I’ve gotten to know some of the women and men who put this together. They aren’t oil roughnecks, but studious academic types working in a well-stocked library. They are more pragmatic than one might think for an advocacy organization.
There’s a ton of stuff to discuss and debate in the 2045 Outlook, but here are the five things that stuck out most to me.
1. Oil is far from dead
A projection that oil and fossil fuels will live on — put out by an oil and fossil fuel organization — is the least surprising thing you’ll see all year. But feigned shock aside, OPEC’s global population growth projections are hard to ignore when it comes to a global energy mix in years and decades ahead. Their base case is that global oil demand will rise from now until 2045. And before you bash them, keep in mind there are plenty of Wall Street firms with projections that aren’t that far off.
Here’s what OPEC is forecasting for oil demand:
“Global primary energy demand is expected to increase by 28% in the period between 2020 and 2045, with all energies required, driven by an expected doubling in size of the global economy and the addition of around 1.7 billion people worldwide by 2045. All energies witness growth, with the exception of coal. Renewables see the largest growth, followed by gas, but oil is still expected to retain its number one position in the energy mix.”
2. It’s not ‘U.S.’ It’s the world
We can scoff at that projection all we want as we tweet from our new iPhones in a comfortable home, but OPEC reminds us that it is a big world out there. It’s getting bigger and growing in places that are not known as the United States or western Europe. The growth will come from countries where electricity may still be substandard and a car — any car — is a valuable asset.
These are OPEC’s projections on global population growth:
“The global population is expected to reach 9.5 billion people by 2045. Future demographic trends are marked by an aging population, a rising working-age population and increases in urbanization and migration rates. The global working-age…