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Renewables to displace oil as top world energy source by late 2040s, EIA says

Renewable energy will displace petroleum as the most-used global energy source in the late 2040s, but oil demand is not expected to peak before 2050, the U.S. Energy Information Administration said Sept. 24 in its latest long-term international outlook.

The reference case assumes Brent oil prices at $100/bbl in 2050, in 2018 dollars, and annual global economic growth of 3%.

EIA Administrator Linda Capuano said the outlook for oil demand continuing to rise through 2050 is based on economic growth, population growth, demand for new oil-based products, air-conditioning use, transportation and other factors.

"Even though you see a very aggressive change in renewables, it is just not growing fast enough to meet the demand, and we do not see demand tapering off," Capuano said at an event to release the report at the Center for Strategic & International Studies.

The forecast sees global renewable energy demand increasing 3% per year between 2018 and 2040, driven by electricity demand and government policies.

The EIA expects liquid fuel consumption to decline to 27% as a share of global demand in 2050, from 32% in 2018.

Natural gas is expected to be the world's fastest-growing fossil fuel out to 2050, with demand rising 1.1% per year, compared with liquid fuel growth of 0.6% per year and coal growth of 0.4% per year.

Capuano said the demand assumptions are heavily influenced by expected use in India, China and Africa.

US oil production to peak in 2031

U.S. oil production will peak in 2031 at 14.53 million bbl/d, an increase of 17% from current levels, and decline to 11.86 million bbl/d by 2050, the EIA said.

While the EIA sees total U.S. oil output peaking in 2031, it expects offshore production to peak in 2022 at 2.43 million bbl/d, an increase of 22% from current levels, and decline to 1.26 million bbl/d by 2050.

The U.S. pumped a record 12.43 million bbl/d in August, according to the EIA's latest short-term energy outlook.

Globally, the EIA sees oil production rising to 127 million bbl/d in 2050, up 30% from 2018 levels, with OPEC growth of 37% outpacing non-OPEC growth of 23%, under the reference case.

Canadian production to more than double by 2050

Middle East oil production is expected to increase to 39 million bbl/d in 2050, a 44% increase from 2018.

The EIA expects non-OPEC oil production of 59 million bbl/d in 2050, with growth led by Canada, Brazil, Russia and the U.S.

Canada is expected to see output grow by 125% from 2018 levels, Brazil should see 59% growth, Russia should see production rise 22% and output from the U.S. is called to rise by 11%.

Non-OPEC countries are expected to produce about 55% of global output in 2050, the EIA said.

Global refinery throughput is expected to expand through 2050, with the largest increases in Asia, where runs are seen increasing by 60% from 2018 levels to 51 million bbl/d in 2050.

Meghan Gordon is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.