Researchers Expect Oil Demand To Plateau By Decade's End

A report by analysts at Citigroup says a shift from oil to natural gas that began in the United States is about to follow suit in other countries. The report says gas may supplant oil for generating electricity in the developing world and will also become more commonly used for transportation.

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LINDA WERTHEIMER, HOST:

NPR's business news starts with an appetite for oil.

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WERTHEIMER: Researchers say they see a plateau in the demand for oil. A new report says demand could level off by the end of this decade, and that's a lot sooner than expected, as NPR's Sonari Glinton reports.

SONARI GLINTON, BYLINE: With such growth in markets like Brazil, Russia, India and China, you'd think the demand for oil would continue to skyrocket. Anthony Yuen says that's not the case. He's a researcher with Citigroup, and he's one of the authors of a report on the future of oil demand. He says there are two main reasons that we'll see our global consumption of oil taper off.

ANTHONY YUEN: One is certainly the efficiencies in the demand for energy, and second is the substitution of natural gas for oil.

GLINTON: Because of fuel efficiency standards in the U.S., every single car company has some kind of alternative vehicle: Diesel, hybrid, plug-in hybrid, electric. And gas engines are getting more efficient. Yuen says that's having an effect on demand, but it's not just cars in the U.S. that are getting more efficient. It's buses, heavy-duty trucks, ships, trains and planes all over the world.

YUEN: High oil prices have caused people to think about looking for other alternatives, and then you have, in the U.S., such low natural gas prices motivating a lot of companies and other institutions.

GLINTON: Yuen says it's not only in transportation where that substitution is happening. Utilities are switching from oil to cheaper natural gas, as well. But if oil prices remain high, he says it could give alternatives a chance to catch up, as well. Sonari Glinton, NPR News.

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