Page 6 - MEOG Week 40

MEOG COMMENTARY MEOG

Total sees oil demand

peaking in 2030

Faced with gloomier prospects for oil, Total is doubling down on gas and renewables

COMPANIES FRENCH oil major Total has joined other oil well-below 2oC target globally,” Kristoffersen
companies predicting that peak oil demand will said.
arrive in the coming decade, forecasting an end Rupture, on the other hand, sees all countries
WHAT: to consumption growth in 2030. pledging net-zero targets while also envisaging
Total has forecast in its This represents a more bullish forecast than breakthroughs in as-yet-unproved technologies
Energy Outlook that oil that of UK peer BP, which recently warned that such as hydrogen, synthetic fuels and carbon
demand will peak in oil consumption would peak in the early 2020s, capture. This will enable them to be developed at
2030, or possibly sooner, if it has not done so already. However, it still scale to cut emissions. As such, global tempera-
depending on the pace of marks a major turnaround in Total’s thinking. ture growth will be limited at 1.5-1.7oC.
decarbonisation efforts. Just a few years ago Pouyanne described peak oil While primary energy consumption will
demand as merely a possibility. Consumption climb by 0.6% annually in Momentum, it rises
WHY: could reach its height sooner than 2030, Total by only 0.4% per year in Rupture.
Oil will begin to cede now says, depending on the pace of decarbon- Solar and wind power will see a rapid expan-
market share in transport isation efforts. sion in usage in both scenarios, being deployed at
to cleaner fuels, and Faced with gloomier prospects for oil, Total is a rate of more than 200 GW per year in Momen-
the petrochemicals not only looking to expand in renewable energy tum and over 500 GW per year in Rupture. The
sector will undergo a but also gas, which it sees as having a much share of EVs in transport will also soar to 60%
transformation, Total stronger outlook. Gas will have an important in Momentum and 75% in Rupture, compared
says. role in decarbonisation by displacing dirtier with the current 1%. Carbon capture and storage
fuels, Total argues, especially as greener gases (CCS) capacity will also be scaled up to 2,000-
WHAT NEXT: are adopted. 7,500 gigatonnes per year.
Total believes the outlook “Oil demand will reach a plateau around 2030 Gas will primarily seize market share away
for gas is much stronger. and then decline slowly thereafter due to trans- from coal and oil. In Momentum, its consump-
It plans to double its port and petrochem accelerated transforma- tion will increase by 1.3% annually and reach 5.7
LNG sales within the next tion,” Total’s president for strategy-innovation, trillion cubic metres by 2050. Its biggest gains
decade and focus on Helle Kristoffersen, said. “Gas will continue to will be in Asia, where it will substitute a lot of
making gas greener. play a key role for decades. It has a key role to play coal-fired generation. Gas will remain vital in
in power systems, heat and in transport.” power generation, in industry and in residential
and commercial sectors, Kristoffersen said. It
Energy outlook will also expand in transport, becoming a more
Kristoffersen was discussing Total’s Energy widespread fuel for vehicles and ships.
Outlook report published on September 29. The Even in Rupture, gas will remain an impor-
company forecast continued growth in global tant means of ensuring power grid stability and
energy demand over the next three decades in all flexibility at an affordable cost, Total said. Under
scenarios considered, by 10-25% in total during that scenario, demand for natural gas will peak
the period. But this extra demand will be met by in 2040, but consumption will continue climbing
low-carbon power. beyond 2050 if hydrogen and other green gases
Electricity’s share of final energy consump- are included in the mix.
tion will rise from 20% currently to 30-40% by “To fully play its role in the energy transi-
2050. tion, gas has to become much greener and much
Total bases its predictions on two main sce- cleaner,” Kristoffersen explained. “That will
narios which it calls Momentum and Rupture. come at a cost, at least in the early years.”
Both envisage Europe becoming carbon neutral In Momentum, the share of green gas will be
by 2050 – the goal set in the European Green limited by its higher cost and a lack of sufficient
Deal. Momentum sees countries in the rest of the carbon regulation. Even so, it should rise to 8%
world pursuing their existing national climate of total gas supply by 2050, versus 0.1% in 2018.
targets, as well as an aggressive deployment of But in Rupture, the share of green gas will exceed
proven clean technologies such as electric vehi- 25% within three decades.
cles (EVs), solar, wind and biofuel.
“Momentum goes beyond the business- LNG plans
as-usual scenario; nevertheless, it fails the CEO Patrick Pouyanne outlined Total’s

P6 www. NEWSBASE .com Week 40 07•October•2020