Peak oil demand, a theory with many doubters

A tanker sails out of the Port of Corpus Christi in Texas after discharging crude oil at the Citgo refinery on Jan. 7, 2016. (MUST CREDIT: Eddie Seal/Bloomberg) A tanker sails out of the Port of Corpus Christi in Texas after discharging crude oil at the Citgo refinery on Jan. 7, 2016. (MUST CREDIT: Eddie Seal/Bloomberg) Photo: Eddie Seal, Bloomberg Photo: Eddie Seal, Bloomberg Image 1 of / 1 Caption Close Peak oil demand, a theory with many doubters 1 / 1 Back to Gallery

When Haitham Al-Ghais, the director of market research for the Kuwait Petroleum Corporation, was asked about peak oil demand Monday, he smiled broadly and responded quizzically, "what demand?"

Even as some oil companies like Royal Dutch Shell and BP predict oil demand will peak before 2040 - as electric vehicles hit the road and governments worldwide work to cut greenhouse gas emissions - there are plenty within the oil industry who view such predictions with a healthy skepticism.

Helen Currie, the chief economist at Conoco Phillips, said her company had modeled electric car demand and other factors and "struggled with finding a peak," "anytime within the next 20 to 30 years," during a panel at the IHS Markit CERAWeek energy conference in Houston Monday.

"We readily acknowledge it's plausible, but we really tend to see oil demand being fairly strong and robust," she said.

The concept of peak oil demand has overtaken the oil world since last summer when Shell CEO Ben van Beurden predicted oil demand would peak within a decade. BP joined the chorus last month, though predicting it would take 20 years.

"I don't think there is any knowledge center in the world that isn't running a study or workshop on peak demand," said David Hobbs, head of research at the King Abdullah Petroleum Studies and Research Center in Saudi Arabia.

The difference in how oil companies predict the future largely boils down to whether or not they are bullish on electric vehicles and governments' commitment to reducing greenhouse gas emissions, said Neil Atkinson, the head of the International Energy Association's oil industry and markets division.

Atkinson is one of the skeptics, predicting petroleum-powered vehicles will continue to be sold in large numbers well into the future. But he held back from dismissing the other side.

"Everyone has a very plausible explanation of why they hold that view," he said. "We are verging more into art than science. And demand growth is much harder to predict than supply."