Oil well (photo by John Hill)Enlarge Photo
Predictions on the future of global energy vary greatly, but many analysts largely believe that peak demand for the oil industry is coming relatively soon.
The world's largest oil companies, however, see it differently: they say their business will only continue to grow through the year 2040.
Exxon and OPEC each believe more than 100 million barrels of oil will be needed globally each day by 2040; the International Energy Agency (IEA) also predicts growing demand.
But many factors that affect future oil demand haven't been factored in, says Bloomberg, which has laid out its analysis in detail in assessing that IEA forecast.
A combination of smaller changes could see oil production not growing, but waning, over the next few decades.
About 60 percent of all oil is used for transportation, and that's a sector expected to see incredible change.
Petro-Canada gas station, Crossfields, Alberta, with electric-car charging stationEnlarge Photo
New vehicle efficiency standards and emission limits around the world, improved aerodynamics in the highest-consuming vehicles, reduction of fuel waste, and smarter navigation have already begun to shrink the amount of fuel needed in the sector.
The report suggests these small improvements will eliminate the need for 11.6 million barrels of oil a day, bringing the new estimate to just over 90 million barrels per day by 2040.
Then there's the rise of electric cars, something of a wild card that will no doubt fuel oil's demise as well.
As electric cars become more practical to own, and more of them supplant vehicles that consume gasoline, more oil production yet will be displaced.
Electric cars have the potential to eliminate another 5.2 million barrels of oil use from the original 2040 estimate—taking the figure below 90 million barrels.
Renewable, clean energy investment is also poised to disrupt the oil industry in a huge way.
Linde hydrogen fuel pump, Ramos Oil Company station, West Sacramento, CaliforniaEnlarge Photo
Despite the Trump administration's efforts, the United States will still invest billions of dollars in clean energy over the coming years, as will China and Europe.
Biofuels, and the switch from coal to natural gas, could further eliminate another 13.5 million barrels of oil needed across the globe.
The switch to clean energy and new fuels now brings the IEA baseline closer to 70 million barrels per day in 2040.
The proposed gap in oil consumption is larger than OPEC's entire current production output alone—it's easy to see why oil companies are composing new business strategies.
Some analysts and even oil companies have suggested peak oil will arrive sooner, possibly in the next five to 15 years.
Although these are simply predictions based on available facts, the moral of the story remains the same: oil companies are in for a major market shift.