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Page added on February 3, 2010

BP’s Hayward says demand for oil will peak by 2030

Global demand for oil will peak within the next two decades, Tony Hayward the chief executive of BP said the plateau would be reached between 2020 and 2030 as falling demand from developed countries balanced growing demand from developing nations.

His comments also suggest Mr Hayward now thinks the peak will come earlier than he had previously thought. Mr Hayward was reported last summer as saying: “I don’t see it coming anytime in the near future. One day the world will stop demanding oil, but it is decades away in all likelihood.

“More than 60 per cent of the world’s energy needs in 2050 will still come from fossil fuels.” BP said Mr Hayward’s latest prediction of lower demand from western nations was based on further energy efficiency measures and greater use of renewable sources such as wind farms.

Mr Hayward said government policies in the developed world were eroding demand at the rate of 1 per cent per year. He said this was contributing to an oversupply of refineries, which was prompting BP’s rivals to close and sell their facilities.

Energy experts said the current decline echoed the downturn in the 1970s, but environmental groups said it must be curbed faster to combat global warming. Dr Peter Cameron, director of the Centre for Energy, Petroleum and Mineral Law, at Dundee University, said: “The oil crises of 1973-4 and 1979 saw a massive reaction against oil use and a rapid reduction in western consumption. What we are seeing now are government policies to promote renewable energy and energy efficiency which are creating another decline in oil demand.

“It is a bit like a wave, almost co-ordinated by western governments.” Dr Cameron added that much of the increased demand for oil among economically expanding countries such as China was fuelled by the production of exports for the West.

However, Friends of the Earth Scotland said faster action was required to curb demand earlier. Chief executive Duncan McLaren said: “If peak oil demand is still that far off, we must constrain fossil fuel production because of climate change.”