Fossil fuels will remain the dominant source of energy, accounting for around 80 per cent of global energy consumption in 2035, according to BP.
In its industry benchmark 2035 Energy Outlook released yesterday, the British-based oil major forecast global demand for energy to increase by 34 per cent, driven by growth in the world population and economy.
Renewable energy supplies, including biofuels, will grow gradually in the next two decades, increasing their share in the global energy mix to 9 per cent, up from 3 percent now, BP said.
It sees gas as the fastest-growing fossil fuel, rising by 1.8 per cent per year compared to oil's 0.9 per cent annual growth rate.
Investments into gas infrastructure are expected to feature in the European Commission’s new ‘energy security package’ next week. Green groups are concerned this path will lock Europe into decades of fossil fuel use.
BP also predict enormous growth in shale gas – mainly US supplies – which could see it provide almost 20 per cent of the world’s supplies within 20 years. The US should also become a self-sufficient energy provider by the 2030's.
“We have been repeatedly surprised by the strength of US tight oil and shale gas. Technological innovation and productivity gains have unlocked vast resources of tight oil and shale gas, causing us to revise the outlook for US production successively higher,” BP said.
BP predicts coal production will fall to an all-time low by 2035, as the world continues its gradual shift towards cleaner forms of energy.
Carbon emissions headed up?
But despite quickened international efforts to cut carbon, emissions will continue to grow by almost 1 per cent a year for the two decades, well above what scientists call a safe level, suggesting the need for “a meaningful global price for carbon,” the report says.
Several environmentalists poured scorn on BP’s overall analysis, accusing the energy supplier of excessively talking up its own industry.
“This is a story of how an oil and gas company predicts the rosy prospects of oil and gas companies. BP would like us to believe that government action on climate will fail, that clean technologies will fizzle, and that the future of energy will still be based on the carbon fuels of the past,” said Greg Muttitt, of Washington-based campaign group Oil Change International, in a statement.
BP has operated through a difficult time for the industry recently, with oil dropping to its lowest price in 11 years. In the fourth quarter of last year, BP declared a 91 per cent decline in earnings; in January it announced 4,000 job losses.
Spencer Dale, BP’s chief economist, said: “After three years of high and deceptively steady oil prices, the fall of recent months is a stark reminder that the norm in energy markets is one of continuous change.”
In the past 20 months, the price of a barrel of oil has collapsed from about $115 in summer 2014 to about $33 today. BP expects prices to eventually climb back up towards $100 a barrel.