A new report predicts that peak oil demand won’t occur until the 2030s, but the oil industry will remain a vital part of the economy through 2050.

In the previous article, I discussed the natural gas projections from the recent report Rivalry: The IHS Markit View of the Energy Future (2018-50). IHS Markit is a provider of global market data for a number of sectors, including energy.

Although natural gas is projected to be the fastest-growing fossil fuel, the report also makes several important projections about the global oil market.

Notably, it expects global oil consumption to continue growing by an annual average of 1.1 million barrels per day (BPD) through 2030. However, natural gas is projected to grow at an even faster rate, so the report projects that oil’s global energy market share will decline from 32% in 2017 (#1 among all energy sources) to 26.6% in 2050. This would put it in second place in 2050, slightly behind natural gas with a 27.3% share.

In the 2030s, oil demand is finally forecast to begin slowing as a result of fuel economy gains and competition from electric vehicles. Oil demand is projected to peak in the early 2030s at about 113 million BPD, which is 15 million BPD higher than 2017 demand. The report then projects essentially constant oil demand to 2050.

About 70% of new global oil supplies over the next decade are projected to come from the U.S., Canada, and Brazil. These new supplies are projected to be profitable at below $100/barrel (2017 dollars), and this helps keep prices below that level until 2035.

The report notes that because new oil supplies will have to be continually added to account for both new demand and declines in existing fields, that the “upstream oil industry remains a large, viable industry throughout this time—as does the global refining business.”

The viability of the oil industry will remain even when oil demand plateaus in the 2030s, due to the large sums of investment and activity to maintain oil production levels as existing fields deplete. Oil will no longer be a growth industry in the 2040s, but the industry will remain a vital part of the global energy system.