“The case for a near-term peak in oil demand is certainly more plausible than that of peak oil supply, but its popularity reflects a degree of exuberance that is not warranted by the data.” (— Michael Lynch, below)
With the onset of the Pandemic, the anti-industrial image-makers went to work. The Pandemic was (somehow) climate-related. The shutdowns were a harbinger of a climate-constrained world. The (victimized) oil industry was too vulnerable as an industry and vocation.
And Peak Oil Demand was now here.
Nope. PR aside, oil dominates the transportation market. Get Americans back toward normal, and the planes, trains, and automobiles will be out in force. RVs too, as well as cruise ships.
The recent rebound to $60 per barrel signals a robust fossil fuel world to come as the population gets back to its traditional ways. The anti-fossil-fuel Houston Chronicle had to admit: “Oil crosses $65 milestone, marking stunning recovery from historic bust.”
Peak Demand theory existed before the Pandemic. One variant was that it was going to happen naturally; the other that that oil usage must be stopped by government mandate in order to “save” the planet.
But the former was will-of-the-wisp, not a sober look at supply and demand.
“Exponential gains in industrial productivity, software-assisted logistics, rapid urbanization, increased political turmoil in key regions of the developing world, and large bets on renewable energy are among the many factors that will combine to slow the previous breakneck growth for oil,” wrote Amy Myers Jaffe back in 2015.
She whiffed on Peak Oil and “geopolitical peak oil.” She is now in danger of striking out with Peak Oil Demand.
Enter Michael Lynch, Peak Oil slayer. A few years ago at MasterResource, he wrote “Peak Oil’ is Now Demand, not Supply.” And recently in Forbes: “Peak Oil Demand, Really? Some Lessons From The Debate Over Peak Supply.”
In a new study, The Pandemic and the End of Oil?, Lynch (and Ivan Sandrea) take on the hyperbole with fact-based, industry-informed logic.  Here are some highlights.
Recent months have seen a growing crescendo of claims that a peak in oil demand may be near, or even be past. Pandemic-related changes in behavior such as working from home are predicted to persist after the emergency ends, and advances in technology are said to make oil-fueled vehicles increasingly obsolete….
[There are] strong reasons for skepticism. People in post-pandemic China do not show major changes in their behavior, and the increasing demand globally for SUVs implies consumers are not focused on reducing emissions.
Further, battery electric vehicles perform significantly worse than internal combustion engines in key metrics, whereas the previous transition, from horses to cars, was due to major improvements in range, speed and carrying capacity, as well as convenience.
The primary findings:
The case for a near-term peak in oil demand is certainly more plausible than that of peak oil supply, but its popularity reflects a degree of exuberance that is not warranted by the data.
Past energy transitions have featured new sources of energy that were cheaper and better, where better typically means easier to use. While battery electric vehicles have some benefits compared to petroleum-fueled vehicles, they are much more expensive and significantly less convenient.
Petroleum has approximately forty times the energy density of batteries, and recharging even with a fast recharger takes five times refilling a gasoline tank. BEV range remains both shorter and less certain than for conventional cars. To date, success for BEVs has required substantial government subsidies implying limited consumer acceptance.
Governments have generally failed when attempting to mandate consumer choice as experiences with bans on alcohol and narcotics have shown, to say nothing of efforts to improve the fuel efficiency of conventional vehicles. It is possible that heavy spending to subsidize BEV purchases will give them a meaningful market share, but given the current financial difficulties resulting from the pandemic, such spending seems unlikely.
Carbon or petroleum taxes could change consumer behavior but have met strong resistance in the past in the United States, at least. While it is possible that the energy industry will be transformed by the pandemic, in reality there are good counter-arguments to suggest that, if anything, the evolution to an all-electric, zero-carbon energy system will be slowed. The irrational exuberance of promoters of cleaner fuels and technologies is dominating the discussion at the expense of more solid analysis, and the inferior performance and economics of solar power and electric vehicles remain a major obstacle to any significant increase in their market share, especially in a post-pandemic world of constrained budgets and lower oil prices.
The fossil-fuel era is still young. In a free market, removing special government subsidies will reduce the market share of nuclear, wind, and solar–and increase the market share of natural gas, oil, and coal. Peak demand will set in for the noncompetitive energies, not the competitive ones.
 Lynch is President, Strategic Energy & Economic Research, as well as Distinguished Fellow at the with Energy Policy and Research Foundation, Inc (EPRINC). He is author of The Peak Oil Scare and the Coming Oil Flood (Praeger 2016).
Ivan Sandrea, trustee of EPRINC and the former CEO and founder of Sierra Oil and Gas, has more than twenty years experience in strategic oil issues for a variety of firms and nonprofit organizations.