Fossil fuel demand could peak within a decade, the IEA predicts
Fossil fuel demand could peak within a decade, the IEA predicts
The International Energy Agency estimates that global demand for fossil fuels could begin peaking within this decade – due in part to energy market disruptions brought on by Russia’s invasion of Ukraine.
The report marks the first time the agency has established a timeline for when demand for all fossil fuels will either plateau or drop.
What could this mean for the future of investment in fossil fuel projects?
Some producers seem unfazed by the IEA’s prediction. Shell’s chief executive reacted by saying falling demand in the future doesn’t eliminate the need for new projects now.
Clark Williams-Derry of the Institute for Energy Economics and Financial Analysis said recent high prices have attracted investment, “but the high prices are also helping to destroy demand, and creating a much more uncertain investment climate for oil and gas in the future.”
The IEA anticipates natural gas demand will flatten by 2030, and demand for oil will do the same a few years later.
UC Santa Barbara Associate Professor Leah Stokes said many new fossil fuel investments will likely end up as “stranded assets.”
“They’re going to be projects that don’t operate for very long and therefore waste a lot of money,” Stokes said.
Stokes expects more investment in clean energy. The IEA said that could exceed $2 trillion a year by 2030.
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