Peak oil production seen by 2040 as IEA calls 2020 'turning point' for energy

Dubai — Global oil production is set to peak by 2030 or 2040 with more energy supplied from solar, wind and carbon capture while storage solutions are developed, Total SA CEO Patrick Pouyanne said Aug. 31.

In a video presentation for the ONS Digital Conference, Pouyanne said oil won't disappear because it's still the most efficient source of energy, it's easy to transport and it's relatively inexpensive, noting that a liter of crude oil costs less than than a liter of water.

By 2050, "we think that we'll have something like 40 million b/d of oil per day, but it's not zero," the Total CEO said. "It is much less than 100 million per day which is the actual consumption. Clearly we will face a peak in oil production around 2030-2040, which will begin to decline. But we will still require oil."

2020 may be the turning point for the energy world, International Energy Agency Executive Director Fatih Birol said later in the video. Costs are declining for alternative energy such as solar and there is a "growing determination" of governments to curb carbon emissions, he said. Companies also are changing strategies to address climate change and "major coal phase-outs" are being discussed, he said. As opposed to 1974 when the Strait of Hormuz was the hot topic in energy security, today the focus is on electricity security, he said.

Energy affordability also needs attention, and is as important as environmental matters, as it will cost "trillions of dollars" to transform the world energy system, Pouyanne said. In France, 3 million people are heating their homes with fuel oil. Incentives are being provided to encourage homeowners to switch from heating oil to natural gas or electricity produced from low-carbon sources such as renewables, he said.