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BP expects fossil fuel growth Annual energy outlook predicts demand growth from developing economies and supply growth from developed economies through 2030 Eric Lidji For Petroleum News
Although the world still needs to make improvements to meet the energy demands of the next generation, the process should be easier than previously expected, according to BP’s Energy Outlook 2030, an annual forecast of the main drivers for the energy industry.
“The big trends are unchanged, and in one word it is that the world needs more energy,” BP Group Chief Economist Christof Ruhl said, pegging the increased demand between 2010 and 2030 at nearly 40 percent. “And that, of course, has lots of people worried.”
While the BP Statistical Review of World Energy has been one of the hallmarks of real world energy data for decades, the London-based energy giant only began releasing its forecast of future energy assumptions three years ago. In its 2012 Energy Outlook, BP made the bold claim that North America would become energy independent by 2030.
In that regard, little has changed since last year. “We stand by that forecast from today’s perspective, and, if anything, that process will go faster and smoother than we thought last year,” Ruhl said. “And that will be largely the result of an increase in tight oil.”
Even with the rising of unconventional oil — including tight oil, oil sands and deepwater oil — oil is expected to be the slowest growing fuel, a 0.8 percent per year. By comparison, natural gas is expected to be the fastest growing fuel, at 2 percent per year.
Coal, carbon emissions to grow With demand from emerging economies, coal is expected to grow faster than oil, at 1.2 percent per year. China and India are expected to account for 93 percent of this growth.
Because of the growth in fossil fuels, the forecast expect carbon emissions to grow by 26 percent through 2030. Carbon emissions are likely to fall in the United States and Europe, but are expected to rise in developing economies. While the developing world is expected to account for 70 percent of all carbon emissions in 2030, the amount of emissions per capita are still expected to be larger in developed economies, like the U.S. and Europe.
Considering all fuels, renewable sources are expected to be the fastest growing category by a long shot, at 7.6 percent per year, but Ruhl noted that renewable fuel growth continues to be largely the result of government subsidies. While he believes it is “probably possible” for renewable fuels to one day compete against fossil fuels for price, the forecast expects fossil fuels to remain the dominate fuel source through 2030.
“When you look at the big picture for fossil fuels, contrary to what many people think, the question is not: when will we run out. The question is: what happens next,” he said.
The implications Because of tight oil — or, more specifically, because of the technological and economic conditions to produce it — the increases in energy production in the coming decades will probably be focused in North America, even though the resource base is global, he said.
The implications of that shift on energy geopolitics will be two-fold. First, the large increases from North America could force OPEC nations to cut production. Second, “If North America becomes energy independent, then by the same token other countries — Europe as a unit and also China and India — become more energy dependent,” he said.
Under the forecast, 93 percent of the growth in consumption expected between now and 2030 would come from developing economies, which is expected to jump 61 percent. Of that growth from the developing world, the Asia Pacific region will take nearly half.
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