LONDON Oil use in rich industrialized countries will never return to 2006 and 2007 levels because of more fuel efficiency and the use of alternatives, the chief economist of the International Energy Agency said on Thursday.
The bold prediction, while made previously by some analysts, is significant because the IEA advises 28 countries on energy policy and its oil demand forecasts are closely watched by traders and policymakers.
"When we look at the OECD countries -- the U.S., Europe and Japan -- I think the level of demand that we have seen in 2006 and 2007, we will never see again," Fatih Birol told Reuters in a telephone interview.
"There may be some zig zags up and down but as a trend I think it will be a downward trend in terms of oil consumption."
Flat or declining OECD demand may ease any strain on oil prices caused by ever-growing consumption in emerging economies. The Organization for Economic Cooperation and Development (OECD) countries will account for 53 percent of world demand in 2010, according to the IEA.
In its January 15 monthly Oil Market Report, the IEA forecast OECD demand would average 45.48 million barrels per day (bpd) in 2010, unchanged from 2009. World demand is forecast at 86.33 million bpd, up from 84.89 million in 2009.
Birol said the economic crisis had played a role in curbing OECD demand but the main reasons were more efficient cars and the increasing use of electricity and gas instead of oil in areas outside transport.
"It did play a role. The recession had a one-off effect," said Birol, who spoke to Reuters from the sidelines of the Davos conference of business leaders. "But the main factors are structural."
CHINA OFFSETS DECLINE
BP Plc (BP.L) Chief Executive Tony Hayward, also in Davos, said on Thursday demand for gasoline would not return to the rate of three years ago in established markets.
"None of us will sell more gasoline than we sold in 2007," he said, referring to developed markets. "That's, however, being offset by very strong ... markets of the East and particularly China."
In China, 13 million cars were sold last year, he said.
Interest in peak demand has grown following the surge in oil prices to a record high near $150 a barrel in 2008, a decline in world demand because of the economic crisis and efforts to combat climate change.
Reuters reported a year ago, citing analysts including the former chief economist at BP Plc, that oil demand may never return to growth in the United States, Europe and parts of Asia.
While non-OECD demand is expected to keep world oil use on a growing trend, some believe global consumption could reach a high point in the next decades as a result of policies to tackle climate change.
Saudi Arabia, which as the world's largest oil exporter has a lot to lose from a decline in oil demand, is worried about future consumption, its lead climate negotiator told Reuters earlier this month.
Muhammed al-Sabban, head of the Saudi delegation to UN talks on climate change, said the possibility that oil demand might peak this decade was a "serious problem" for Saudi Arabia.
Birol did not give any timeframe for any peak global oil demand, but said a move toward more efficient vehicles in developing markets could dampen the expected emerging country growth.
"If there is a transformation in the transport sector, it may also slow down the growth substantially."
"Advanced-car technologies ... are very strong pushed in many countries."
(Editing by Christopher Johnson)