IEA forecast says demand for gasoline may shrink in coming decades

Gasoline consumption could soon peakeven if the world continues to use more and more oil, the International Energy Agencysaid in a report this week.

In a 600-page report on the world's energy market, the Parisbased agency looks at what it thinks will happen to global energy demandbased on a variety of scenarios. In one, the IEA assumes countries will adhere to what they pledged to do at the recent Paris climate summit, which calls for sharp reductions in greenhouse gas emissions.

In another, it looks at the market assuming countries stick with their current policies.

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Under the former scenario, the energy body foresees some major changes in how much oil the world will use fortransportation purposes.

While industrial, petrochemical and other uses still mean the world will consume more oil in the coming decades, the IEA foresees a future where we use much less oil to get around.

The world used about 23 million barrels of gasoline a day last year for transportation purposes, a figure it expects to drop to 22.8 million by 2020. It may tick up a little after that, but not for long and not by much, the IEA expects.

Looking forward,"oil use in passenger vehicles ... falls from just under 24 [million barrels per day] today to 15 mb/d in 2040," the IEA said.

The rise of electric cars

Managingthat feat will meana sharp increase in the role of electric vehicles, says the report.

Currently, there's about 1.3 million electric vehicles on roads worldwide, about twice as many as there were last year. But with tough new fuel-economy standards and generous tax breaks, the electric car revolution could be just getting started, saysthe IEA.

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The group expects there to be more than 30 million electric cars on the road by 2025, and more than 150 million by 2040.

Starting in 2020, the European Union will ramp up its already tough fuel-efficiency rules, which the IEA says will cause fewer gas-powered cars on the roads and the ones that are will be doing their part, too. Worldwide, the IEA expects that fuel efficiency for vehicles will double by 2040.

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