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A critical review of IEAs oil demand forecast for China

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Publication date: 2008-03-01
First Published in Energy Policy
Authors: W. Nel & C. Cooper

Abstract:

China has a rapidly growing economy with a rapidly increasing demand for oil. The International Energy Agency (IEA) investigated possible future oil demand scenarios for China in the 2006 World Energy Outlook. The debate on whether oil supplies will be constrained soon, because of limited new discoveries, raises the concern that the oil industry may not be able to produce sufficient oil to meet this demand.

This paper examines the historical relationship between economic growth and oil consumption in some countries. Logistic curve characteristics are observed in the relationship between per capita economic activity and oil consumption. This research has determined that the minimum statistical (lower-bound) annual oil consumption for developed countries is 11 barrels per capita. Despite the increase reported in total energy efficiency, no developed country has been able to reduce oil consumption below this lower limit. Indeed, the IEA projections to 2030 for the OECD countries show no reduction in oil demand on a per capita basis. If this lower limit is applied to China, it is clear that the IEA projections for China are underestimating the growth in demand for oil.

This research has determined that this underestimation could be as high as 10 million barrels per day by 2025. If proponents of Peak Oil such as Laherrère, Campbell, and Deffeyes are correct about the predicted peak in oil production before 2020, then the implications of this reassessment of China’s oil demand will have profound consequences for humanity.

Published in: Energy Policy, Volume 36, Issue 3, March 2008, Pages 1096-1106
Available from: Science Direct

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