McAdams: 2030 oil gap will be 35 MM Bbl/day
Following last night’s welcome reception, the International Biorefining Conference & Trade Show kicked off this morning with a keynote address given by the president of the Advanced Biofuels Association, Michael McAdams, who spoke about the projected oil gap the world can expect in 2030.
With current crude oil demand at 89 million barrels (3.7 billion gallons) a day, in less than 20 years the gap between demand and supply of crude oil is projected to be around 35 million barrels (1.47 billion gallons) a day.
McAdams also spoke about the connection between gross domestic product, the cost of oil and the health of economies. When the oil burden is above 4 percent of GDP, economies stumble, and when it’s fewer than 4 percent GDP, economies grow. Today the global GDP is around $60 trillion, McAdams said, so with a per-barrel projected cost of oil in 2030 at $196, the global GDP would have to more than triple to reach $186 trillion in order for the global economy not to come to a screeching halt.
With a conventional oil pool of around 87 million barrels (3.65 billion gallons) a day, and a global biofuels penetration of only about 3 percent today, this projected oil gap in 2030 will in part be relieved by unconventional crude oil production via deep water drilling, tar sands, shale formations and gas-to-liquids—but this won’t be enough.
McAdams noted a study that said if all the corn in the U.S. went into ethanol production, this would only supplement 15 percent of transportation fuel demand. So what to do?
“There are challenges in the U.S., let alone on a global scale,” he told the audience. What will be required to fast-track advanced biofuels in order to offset the projected oil gap in 2030 is “political will and massive capital,” McAdams said. “The political system in the U.S. is clearly dysfunctional, and there are major gaps in education and understanding.”
He referred to the U.S. DOE as “all electric all the time” because, as he said, transportation fuels only receive 5 cents on the dollar versus the power industry. He said the U.S. energy policy is fragmented and disjointed. “We have separate policies on air, electricity and fuels,” he said. Those need to be aligned in order to more effectively address the pending energy crisis.
“There’s a lot of work to do, and a lot of opportunity,” McAdams said. “The world is screaming for products that the people in this room are going to deliver.”