Global demand for energy from gas is forecast to overtake demand for oil in 2026, according to an energy transition outlook report released on Monday.
"Although our model does not consider short-term geopolitics or local energy security demand, we see gas overtaking oil demand in 2026 to become the dominant energy source," said the report published by Norway-based global quality assurance and risk management company DNV GL. "We expect global oil demand to peak in 2023, and global gas demand to peak in 2034," the company added.
According to DNV GL, global final energy demand — the total energy consumed by end users such as buildings, manufacturing, and transport — will peak in 2035 at about 468 exajoules (EJ), which is 15 percent higher than in 2017. It will decline to 450 EJ by 2050, the company said.
"This reflects the accelerating improvement in global energy efficiency, driven largely by electrification of the world's energy system, in which renewables will have a greater share," it added.
The report, noted however, that oil and gas would still meet a substantial 40 percent of world energy demand in 2050 compared with 53 percent today.
"Oil will still be needed during the [energy] transition, but with a substantial reduction in demand. This will be led by society's uptake of battery or hydrogen fuel cell vehicles, and the increasing efficiency of internal combustion engines," it said. "Having reached its peak in within the next five years, we forecast global demand for oil to be 50 percent of today’s production levels by 2050," DNV GL added.
According to the company's estimates, gas will meet 25 percent of world energy demand by the mid-century. "As the least carbon-intensive of the fossil fuels, it will play a pivotal role in providing energy security and stability alongside variable renewables during the transition," it said, adding continued investment in new oil and gas developments would still be needed.
According to the report, global oil and gas reserve levels decline at a rate of around 5 percent per year because of existing reservoir depletion.
"New resources will need to be developed to counter both the depletion effect, and to meet new demand," it said.
