An award has been given to an ECF-funded study that delivers new insights into the transition away from oil: Oil Market Futures. Project leader Cambridge Econometrics was named winner of the category “Low Carbon Publication 2016” by the UK’s LowCVP, a public-private partnership of around 200 organisations that works to accelerate a sustainable shift to lower carbon vehicles and fuels. Oil Market Futures highlights the need for policymakers and investors to start planning for a world with significantly lower oil demand, and consequently lower crude oil prices. At lower longterm oil prices than previously projected, exploiting many high-cost sources would become a risky investment.
The judges said: “CE’s Oil Market Futures study offers an important integrated analysis, highlighting the significant disconnect between climate change agreements and future oil production plans. It also shines a spotlight on the implications of climate agreements in terms of demand for energy from previously untapped sources such as tar sands and deep-water drilling, while demonstrating the positive economic impact of decreasing oil imports.”
The study, available for download here, looks at oil prices under a scenario of concerted global action to tackle carbon emissions from transport. The results show that, in a world where climate policies are implemented to drive investment in low-carbon technologies, demand for oil from transport will be significantly reduced: by around 11 million barrels per day in 2030 and by 60 million barrels per day in 2050. This lower oil demand would result in oil prices stabilising between $83 and $87 per barrel in the long run, rather than increasing to $90 per barrel by 2030 and over $130 per barrel by 2050 in a business-as-usual high-carbon world.