Could Oil Demand Actually Be Rising?
Jul 14 2017 Comments 0
When calculating global demand for oil, market analysts focus almost exclusively on passenger vehicles. After all, in 2016 the US alone guzzled around 143.37 billion gallons of finished motor gasoline.
While the electric car revolution will supposedly push this figure down, some critics maintain that there’s one global oil demand driver that’s being ignored. The world still relies heavily on trucks and freight vehicles, which also play weighty role in driving demand.
The burden of heavy loads
According to a recent report published by the International Energy Agency, the world needs to keep freight fuel efficiency in check, or risk oil demand continuing to rise, regardless of how many electric cars are on the roads.
Across the globe, just four countries enforce fuel efficiency standards for heavy trucks. While Canada, the US, China and Japan are all setting an example, they account for just one tenth of the 40 countries that monitor passenger vehicle fuel efficiency.
“For far too long there has been a lack of policy focus on truck fuel efficiency. Given they are now the dominant driver of global oil demand, the issue can no longer be ignored if we are to meet our energy and environmental objectives” commented Dr. Fatih Birol, the IEA’s Executive Director in a press release.
Freight set to push up oil demand by 40%
He has a valid point, with heavy vehicles accounting for around 40% of total growth in oil demand since 2000. Every day, trucks burn around 17 million barrels of oil, which equates to around one fifth of total global demand. By 2040, analysts warn that the freight industry will be responsible for a 40% increase in demand, which will put a major dent in the world’s efforts to slash its greenhouse gas emissions.
The IEA’s three point plan
In an effort to manage the predicted increase, the IEA is urging governments to introduce new regulations, spotlighting three key areas. The first is logistics and operations, which refers to the use of GPS technology to optimise truck routing and improve supply chain efficiencies. The second area of focus is hardware improvements, with the IEA recommending existing trucks be fitted with aerodynamic retrofits. Furthermore, new vehicles should be built with lighter materials and fuel-efficient engines. Third is a lucrative payoff from the use of alternative fuels, including biofuels, natural gas, electricity and even hydrogen.
If the sector embraces these recommendations, the IEA maintains that it’s possible to slash oil demand by nearly 16 mb/d by 2050.
Alternative fuels are quickly gaining momentum, with biodiesel one of the most exciting breakthroughs. Though while biodiesel is an eco-friendly alternative, it can form wax crystals at low temperatures which can clog fuel lines and filters. It’s therefore not suitable for use in aviation fuels, with ‘IP-585 – Determination of fatty acid methyl esters (FAME) from bio-diesel in aviation turbine fuel’ exploring the latest methods used to test jet fuel for biodiesel contamination.
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