It’s a cautionary net-zero tale for the so-called ‘energy transition’.Despite having the highest penetration of EV sales, oil demand in Norway — which is also one of the world’s largest producers — has barely budged in nearly a decade.Analysts don’t expect it to go down any time soon, despite the fact that almost 80% of all car sales last year were electric.And in fact, Norway is on track to record 100% of new EV sales by 2025. Yet oil demand remains relatively flat at around 200,000 barrels per day. Demand for liquid petroleum gas (LPG) and ethane commonly used in cooking and heating also remains high..Part of the reason is that EVs are still barely a sixth of the overall automobile fleet of around three million cars. Norwegians typically buy them as second cars for scooting around the city and then rely on their ICE equivalents for longer road trips.“Another possibility is that electric vehicles are used for short distances, but Norwegians still rely on fossil fuels to cover longer distances," investment broker UBS said. In addition, the commercial transportation sector still relies on diesel fuel, where demand has risen about 10% to some 32,000 barrels per day. That’s because the batteries in long-haul trucks and tractor trailers are still too heavy to be a practical alternative..The situation in Norway is likely to repeat around the world where governments — including Canada’s — are focussing electrification efforts on passenger vehicles when heavy-duty trucks and trains and even ships are about two-thirds of emissions.Norway is commonly compared to Canada in terms of oil production; it is the world’s eight-largest oil exporter while Canada is fifth.That prompted investment firm UBS to caution in a report that Norway’s example serves as a reminder that global oil demand has not yet peaked and likely won’t fall for decades."We continue to believe it will increase over the coming years, then plateau and begin a gradual decline at some stage during the next decade," it added..That backs up projections by groups such as OPEC that said in its most recent long-term demand outlook that world oil demand will rise to around 110 million barrels per day by 2028 and 116 million bpd in 2045 before tailing off in the latter part of the century. "Recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions," OPEC Secretary General Haitham Al Ghais wrote in the foreword to the report.It also came with a caution — unheeded in this country — that governments risk sparking an energy crisis of their own making with policies aimed at reducing fossil fuels. OPEC estimates USD$14 trillion per year in new investments will be required during the forecast period, up from $12.1 trillion this year."Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos," Al Ghais added.
It’s a cautionary net-zero tale for the so-called ‘energy transition’.Despite having the highest penetration of EV sales, oil demand in Norway — which is also one of the world’s largest producers — has barely budged in nearly a decade.Analysts don’t expect it to go down any time soon, despite the fact that almost 80% of all car sales last year were electric.And in fact, Norway is on track to record 100% of new EV sales by 2025. Yet oil demand remains relatively flat at around 200,000 barrels per day. Demand for liquid petroleum gas (LPG) and ethane commonly used in cooking and heating also remains high..Part of the reason is that EVs are still barely a sixth of the overall automobile fleet of around three million cars. Norwegians typically buy them as second cars for scooting around the city and then rely on their ICE equivalents for longer road trips.“Another possibility is that electric vehicles are used for short distances, but Norwegians still rely on fossil fuels to cover longer distances," investment broker UBS said. In addition, the commercial transportation sector still relies on diesel fuel, where demand has risen about 10% to some 32,000 barrels per day. That’s because the batteries in long-haul trucks and tractor trailers are still too heavy to be a practical alternative..The situation in Norway is likely to repeat around the world where governments — including Canada’s — are focussing electrification efforts on passenger vehicles when heavy-duty trucks and trains and even ships are about two-thirds of emissions.Norway is commonly compared to Canada in terms of oil production; it is the world’s eight-largest oil exporter while Canada is fifth.That prompted investment firm UBS to caution in a report that Norway’s example serves as a reminder that global oil demand has not yet peaked and likely won’t fall for decades."We continue to believe it will increase over the coming years, then plateau and begin a gradual decline at some stage during the next decade," it added..That backs up projections by groups such as OPEC that said in its most recent long-term demand outlook that world oil demand will rise to around 110 million barrels per day by 2028 and 116 million bpd in 2045 before tailing off in the latter part of the century. "Recent developments have led the OPEC team to reassess just what each energy can deliver, with a focus on pragmatic and realistic options and solutions," OPEC Secretary General Haitham Al Ghais wrote in the foreword to the report.It also came with a caution — unheeded in this country — that governments risk sparking an energy crisis of their own making with policies aimed at reducing fossil fuels. OPEC estimates USD$14 trillion per year in new investments will be required during the forecast period, up from $12.1 trillion this year."Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos," Al Ghais added.
