OPEC just released its monthly oil report for October which included lower estimates for oil supply and demand for 2008 and 2009. Each year, global growth is projected to be positive: at almost 600,000 barrels per day (b/d) this year and 800,000 b/d in 2009. But there was one piece of information on page 25 of the report that raised my eyebrows and my hopes that we can keep oil prices and global greenhouse gas emissions in check: global oil demand in the third quarter of 2008 is reported to have fallen!
Demand fell less than 100,000 b/d (<.2%), but for it to have decreased at all is amazing against the strong upward pressure of population increases and rapid demand growth in the Middle East, China and India.
With its projections of the fourth quarter and 2009, OPEC and the IEA clearly think that demand growth will commence this quarter. But if it doesn't due to efficiency and substitution to lower-carbon alternatives like natural gas and wind then our climate will reap huge benefits from the oil price run-up from 2002-2008. The possibility of such negative growth is sending oil prices to ~$75 per barrel (now lower than last year's price). And it also raises the chatter that OPEC may cut production by one million barrels per day in their “extraordinary” November meeting. But again, oil prices remain three times their 2002 level, and this reality may continue to crimp demand.
The last time global greenhouse gas emissions fell substantially for more than one year was in the early 1980s when high oil prices caused global consumption to fall 10% between 1979 and 1983. Here’s hoping such a demand reduction can be repeated over the next few years and continue decades into the future.
Yesterday, I visited a great climate change exhibit at the American Natural History Museum here in New York City. It served as another reminder that if we don’t get global emissions under control, the resulting climate instability could cost future generations many more trillions than it would take to reduce consumption and switch to renewables in this generation. Let’s make last quarter’s oil demand the trend rather than the exception.
Tags: efficiency, global oil consumption, oil prices, OPEC