World oil production will soar to new records over the next five years, as a dramatic expansion in demand from airlines offsets the arrival of electric cars, according to a report from OPEC.
In a forecast that will dismay environmentalists – and which questions the theory that oil company reserves will become “stranded assets” – Opec’s annual report significantly revised production estimates upwards.
Most of the production increase will come from countries outside Opec, led by explosive growth from frackers in the United States, with China and India leading the increase in demand.
Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change.
Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20 per cent in developing countries to reach five times the volumes burned in the west.
The world’s airlines will be the single fastest growing user of oil, increasing consumption by 2.2 per cent a year on average, to 2040. However, the largest absolute growth is expected to come from road transport.
The number of vehicles on roads across the world are expected to leap from 1.1 billion now to around 2.4 billion in 2040. In its central scenario, Opec expects just 320 million of those to be electric, a number that climbs to 720 million in a scenario where battery-powered cars take off rapidly.
It said that if the higher prediction for electric cars came to pass, oil demand would only slip slightly to 109 million bpd rather than 111.7 million bpd by 2040, the report said.
Opec revised downwards its forecast for the market share of diesel vehicles because of the fallout from the dieselgate scandal and electric strategy announcements by carmakers over the past year.
Renewable energy production will rise rapidly but even by 2040 will meet only around 20 per cent of global energy demand by 2040, according to projections in the report.