Peak oil will occur in the next few years, a new report into energy transition has found.
Demand for gas and variable renewables will continue to grow and be greater in 2050 than it is today, according to DNV GL.
By this time gas is expected to account for nearly 30% of the global energy supply, providing the world with a base of secure and affordable energy.
But the firm’s Outlook report says oil will reach its peak by the middle of the 2020s, with some predicting it to be as soon as 2022.
The 2019 Energy Transition Outlook provides an independent forecast of developments in the world energy mix to 2050.
The report states there is no single pathway to a decarbonised energy mix. A combination of energy sources – primarily gas and renewables – will be the quickest route to delivering a supply of affordable, decarbonised energy in the lead-up to the mid-century.
It is believed gas will increasingly complement variable renewables, meeting demand in peak periods such as winter in colder climates.
And as gas secures its place as the world’s largest energy source from the middle of the next decade, its production and consumption must be decarbonised to help achieve national and international targets for climate change mitigation.
To do this they will need carbon capture and storage (CCS) – the only currently-available technology to deeply decarbonise hydrocarbon use – to be employed at scale but, at present, this will not be achieved until the 2040s unless governments develop and enact more definitive policies on its use, according to the Energy Transition Outlook.
Liv Hovem, CEO, DNV GL, said: “All major routes to successfully decarbonising gas rely on the large-scale uptake of carbon capture and storage. The future of CCS largely lies in the hands of policymakers setting a higher carbon price than the cost of the technology. Industry can also play a role in stimulating quicker adoption by focusing on finding ways to reduce the cost of CCS technology.
“Large-scale uptake of carbon capture and storage technology will unlock significant opportunities for hydrocarbon and renewable energy technologies to work together to decarbonise the energy mix. The energy industry must however also shift its mindset from ‘gas vs renewables’ to ‘gas and renewables’ for success.”
Ms Hovem said in order for CCS technology to really take hold, some countries need to lead by example.
She added: “The reason for the demand decrease (in oil) is the uptake in electrical vehicles that we see.
“We think the uptake of electrical vehicles is quicker for developed countries. We also predict there will be a peak demand for energy. The reason for that is that even though we have growth in GDP and the world becomes more electrified there will also be more energy efficiency and less energy being lost along the whole system so it will level off the need for energy.
“That’s a place where we differ from other scenarios. Energy efficiency is an important part of that.”
According to DNV GL’s analysis, global oil demand will peak in the mid-2020s and gas demand will keep rising to 2033. Gas demand will then plateau, and the fuel will remain dominant until the end of the forecast period in 2050, when it will account for more than 29% of the world’s energy supply.
Significant investment will be required to ensure production meets demand, including realising the potential from stranded gas reserves and for reserve replacement.
Ms Hoven added: “Our sector will only have the opportunity to decarbonise if it maintains society’s trust through a sharp focus on safe operations and environmental performance.
“Companies’ ability to display the highest standards of safety and sustainability today will win the public support that the industry needs to decarbonise for tomorrow.”