Our key forecasts related to fossil fuels
The energy transition is playing out against the backdrop of historic changes in demand for energy and society’s expectations for how energy is produced. Based on DNV GL’s model of the world energy system, our key forecasts related to fossil fuels are as follows:
- Global final energy demand: The total energy consumed by end users such as buildings, manufacturing, and transport will peak in 2033 at about 462 exajoules per year (EJ/yr; see page 22 for further information on units of measurement). This is 12% higher than in 2017. It will then decline slowly to 446 EJ/yr by 2050. This reflects the accelerating improvement in global energy efficiency, driven largely by electrification of the world’s energy system, in which renewables will have a much greater share than today.
- Oil and gas: These fuels will still meet a substantial 46% of world energy demand in 2050 compared with 54% in 2017. We see global gas demand overtaking demand for oil in 2026 to become the world’s primary energy source. Based on our model’s current assumptions, oil demand will peak around the mid-2020s, and gas demand will keep rising to 2033. Demand for gas will then plateau, and remain dominant until the end of our forecast period in 2050, when it will account for 29% of the world energy mix. This all pre-supposes no unexpected geopolitical or market shocks.
As the energy transition unfolds, and pressure for decarbonization increases, it is important that the oil and gas industry keeps sight of its responsibility to address the energy trilemma: how to provide a secure supply of both sustainable and affordable energy. As our model’s findings suggest, oil and, in particular, gas will continue to play key roles in this regard over our forecasting period.