Consultancy Rystad Energy says a global drive towards electrifying road transport to reduce carbon emissions could halve the world’s oil refining capacity demand in 2050.
“Going forward, we will be close to 90 percent electrification by 2050,” said Mukesh Sahdev, Senior Vice President and Head of Downstream, Rystad Energy. .
Mukesh said electric vehicles will cut global consumption of gasoline and diesel, but demand for other refined oil products in aviation, marine and petrochemical sectors may remain high due to urbanization, which will be a challenge for the refining sector.
“How are we going to meet those demands with 50 per cent reduction in refining capacity? I think this is a big sign that we may have a lot of shortfalls in the areas that come with the demand,” he said.
“This will lead to a significant rationalization of downstream assets throughout the supply chain.”
For example, cokers upgrading units used to produce gasoline and diesel will have to shift their production to produce more petcoke for graphite in batteries, he said, adding that the crude oil can be converted directly into petrochemicals. Processing in is another trend.
Nevertheless, global oil demand could pick up in the short term. The consultancy expects an increase in oil demand from the COVID-19 pandemic to drive global crude processing to 80.1 million barrels per day in the second half of 2021 as refiners maximize gasoline production.
by Florence Tanu
This News Originally From – The Epoch Times