Oil: No sign of waning appetite

Oil is so entrenched in the modern world that demand is still rising by up to 1.5 percent a year

LONDON: Global oil consumption will reach 100 million barrels per day (bpd) — more than double the level of 50 years ago — in months, according to an industry report by Reuters.

Despite overwhelming evidence of carbon-fueled climate change and billions in subsidies for alternative technologies such as wind and solar power, oil is so entrenched in the modern world that demand is still rising by up to 1.5 percent a year, said the report.

There is no consensus on when world oil demand will peak but much depends on how governments respond to global warming, according to the International Energy Agency (IEA), which advises Western economies on energy policy.

OPEC Secretary-General Mohammed Barkindo told a conference in South Africa on Sept. 5 that global consumption would hit 100 million bpd this year, sooner than anyone had expected.

With a sophisticated global infrastructure for extraction, refining, and distribution, oil produces such a powerful burst of energy that it is invaluable for some forms of transport such as aircraft.

Of the almost 100 million barrels of oil consumed daily, more than 60 million bpd is used for transport. Alternative fuel systems such as battery-powered electric cars still have little market share.

Much of the remaining oil is used to make plastics by a petrochemicals industry that has few alternative feedstocks.

Although government pressure to limit the use of hydrocarbons such as oil, gas, and coal is increasing, few analysts believe oil demand will decrease in the next decade.

If the current mix of policies continues, the IEA expects world oil demand to rise for at least the next 20 years, heading for 125 million bpd around the middle of the century.

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