Oil substitution and the decline in conventional oil
In oil depletion analysis, it is commonly assumed that conventional oil demand will continue to increase beyond the stage at which production must decline and fall due to geological constraints. In this analysis, we attempt to understand whether another possibility might occur: might demand for conventional oil decline before geologic constraints become binding? This might occur due to efficiency improvements, saturation for travel demand in wealthy countries, substitution with alternative non-liquid energy carriers such as electricity or natural gas, or substitution with unconventional liquid fuels such as oil sands, synthetic fuels, and biofuels.
In order to support this analysis, we have developed the Interactive petroleum Demand EStimation (IDES) model. IDES allows any user to download the analysis tool used in this paper and to adjust model settings in line with their beliefs about future rates of technology adoption, demand increases, and economic growth.
Brandt, A.R., A. Millard-Ball, M. Ganser, S. Gorelick (2013). Peak oil demand: The role of fuel efficiency and alternative fuels in a global oil production decline. Environmental Science & Technology. DOI: 10.1021/es401419t
Current IDES model and supplemental documentation