The People of America's Oil and Natural Gas Indusry

Peak Oil Demand

Jane Van Ryan

Jane Van Ryan
Posted October 16, 2009

Two reports indicate that oil demand has probably peaked in the United States and other developed countries and will not exceed pre-recession levels. According to IHS Cambridge Energy Research Associates (CERA), oil demand in developed countries, which accounts for 54 percent of overall oil demand, likely peaked in 2005.

Separately, ExxonMobil says that U.S. demand for gasoline probably peaked in 2008. The company also expects stricter vehicle standards to further depress demand in coming years.

IHS CERA's Director of Global Oil Aaron Brady says petroleum for transportation fuels has been "the single driving force" in developed countries' oil demand for two decades. Now it is being tempered by changes in the push for higher mileage vehicles, the desire for more alternative fuels and the fact that the demand for mobility is flattening. Still, he says this does not signal the end of the oil age. The decline in oil consumption in developed countries is expected to be "fairly modest."

Overseas, however, oil demand is expected to continue to grow in developing countries, including China, especially for transportation fuels. According to ExxonMobil's annual energy outlook report, China had 12 million cars and light trucks in 2005, and is expected to have 110 million by 2030. CERA's World Oil Watch projects worldwide oil demand to increase from 83.8 million barrels a day in 2009 to 89.1 million barrels a day in 2014.

Here in the United States, the Department of Energy projects that oil will remain an essential part of the nation's overall energy mix for many years to come. Oil is expected to account for 33.5 percent of America's total energy demand in 2030. That same year, natural gas is expected to account for 21.8 percent.