Oil Giant BP Says Peak Oil Usage Is Behind Us

The company’s latest Energy Outlook report comes as it makes major investments in renewables.

By Alexandra HartSeptember 21, 2020 1:35 pm

It’s no secret that the pandemic has knocked the wind out of the oil industry. Optimists in the energy sector believe that demand will recover once things start opening up. But a new projection from BP paints a considerably bleaker picture for the future of oil, suggesting that things will never be the same as they once were. And since this prediction comes from an oil industry giant, people are taking notice.

“For the first time, a supermajor oil company is saying that they do not see a scenario where demand for oil grows much higher than it was last year,” said Chris Tomlinson, business columnist for the Houston Chronicle. “And any industry that shrinks or has lower demand for its product is one thats in trouble and is slowly dying.”

This conclusion from BP’s new Energy Outlook comes as the company moves towards diversifying its alternative energy portfolio. Earlier this month, BP made its first moves into wind power, penning a $1.1 billion deal with Norwegian energy company Equinor. And at the beginning of August, CEO Bernard Looney vowed that the company would aim to invest $5.5 billion per year in renewable energy.

“The company is really reinventing itself with a plan that was announced last year, and this outlook helps explain why they’re doing it,” Tomlinson said. “They just don’t think consumers will want to buy oil when they can find cheaper renewable alternatives.”

American energy companies, like Texas-based ExxonMobil, have been more resistant to change.

ExxonMobil has really dug in its heels and said that ‘we believe we’re going to sell all the oil we’ve discovered,’ that there will be consistent demand through 2040, growing demand.” Tomlinson said. “They they consider BP and Shell’s moves towards renewable energy to be PR exercises. And what I think it reflects is Exxon’s, you know, decades old hubris and and disrespect for its customers.”

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