Growth of U.S. shale oil, gas and oil sands, against gradual decline in oil demand, will see Western Hemisphere almost totally self-sufficient by 2030, BP finds in 2030 Energy Outlook
January 18, 2012
– Global energy demand will continue to grow over the next twenty years, albeit at a slowing annual rate, fuelled by economic and population growth in non-OECD countries. Increased energy efficiency and strong growth for renewable energy are also forecast in BP’s latest Energy Outlook 2030, which is published today.
Global energy demand is likely to grow by 39 per cent by 2030, or 1.6 per cent annually, almost entirely in non-OECD countries; consumption in OECD countries is expected to rise by just 4 per cent in total over the period. Global energy will remain dominated by fossil fuels, which are forecast to account for 81 per cent of global energy demand by 2030, BP forecasts, down about 6 per cent from current levels. The period should also see increased fuel-switching, with more gas and renewables use at the expense of coal and oil.
That gradual switching should see renewables, including biofuels, continue to be the fastest growing sources of energy globally, rising at an annual clip of more than 8 per cent, much quicker even than natural gas, the fastest growing fossil fuel at about 2 per cent a year over the period to 2030.
Presenting the 2030 Energy Outlook, BP chief executive Bob Dudley said: “This report is by turns challenging, fascinating and stimulating for anyone in the energy business. It helps us to be both realistic and optimistic. It shows there are things we can’t change - like the underlying drivers of energy demand - and things we can change – like the way we satisfy that demand.
“The main message is that we need to have an open, competitive energy sector, which encourages innovation and thereby maximises efficiency in order to enjoy energy that is sufficient, secure and sustainable into the future,” he added.
BP chief economist Christof Rühl argues that the impact of globalisation and competition will continue to deliver a remarkable convergence in energy intensity around the world, a measure of energy use per unit of national economic output.
The growth of unconventional supply, including US shale oil and gas, Canadian oil sands, and Brazilian deepwaters, against a background of a gradual decline in oil demand, will see the Western Hemisphere become almost totally energy self-sufficient by 2030. This means that growth in the rest of the world, principally Asia, will depend increasingly on the Middle East in particular for its growing oil requirements.
Oil, the world’s leading fuel today, will continue to lose market share throughout the period although demand for hydrocarbon liquids will still reach 103 million barrels per day (b/d) in 2030, up by 18 per cent from 2010. This means the world will still need to bring on enough liquids - oil, biofuels and others - to meet that forecast 16 million b/d of extra demand by 2030 and replace declining output from existing sources.
While coal is expected to continue gaining market share in the current decade, growth will wane in the 2020-30 decade; gas growth will remain steady and non-fossil fuels are likely to contribute nearly half of the growth after 2020.
Power generation is expected to be the fastest growing user of energy in the period to 2030, accounting for more than half the total growth in primary energy use. And it is in the power sector where the greatest changes in the fuel mix are expected. Renewables, nuclear and hydro-electric should account for more than half the growth in power generation.
This year’s Energy Outlook 2030 examines in more detail several important facets of the global energy story: the pathways for economic development and energy demand in China and India; the factors impacting the energy export prospects of the Middle East; and the “drivers” of energy consumption in road transportation.
In China, growth of energy use is expected to slow significantly after 2020 as the economy matures. Although India’s population is on track to exceed China’s, its energy growth path is unlikely to replicate China’s energy intensive growth path. It will more than double its energy use to 2030, heavily based on coal, but this will still result in consumption of some 1.3 billion tonnes of oil equivalent (toe), or just over one quarter of China’s total.
There will remain a heavy reliance on higher oil exports from Middle East OPEC countries to meet demand. BP’s analysis suggests that the Middle East countries have the capability to bring on the required new production to meet global demand, even though the region’s energy use per capita is expected to remain more than three times as high as the rest of the non-OECD world.
BP says it expects to see steady progress in longstanding efforts to displace oil with gas and to improve the efficiency of energy use within the region. Saudi Arabian, Iraqi, and regional production of gas-related liquids will dominate supply growth as the region’s share of global oil supply rises to 34 per cent by 2030.
Transportation is likely to be the slowest growing sector for global energy consumption; significant improvements in fuel efficiency, including hybridization of vehicles will partly offset continued strong growth in vehicle sales in emerging markets. Hybrid vehicles (including plug-ins) offer consumer flexibility and appear capable of meeting anticipated fuel economy targets in 2030; oil is likely to account for 87 per cent of transport sector energy use, down from 95 per cent today, with biofuels filling most of the gap, and accounting for seven per cent of transport sector energy use.
Global CO2 emissions are likely to rise by about 28 per cent by 2030—slower than the current rate of energy demand growth due to the rapid growth of renewables and natural gas. If more aggressive policies than currently envisioned are introduced, global CO2 emissions could begin to decline by 2030.
By 2030 today’s energy importers will need to import 40 per cent more than they do today, but the experience will vary by region. In North America, efforts to reduce dependence on foreign supplies should show impressive results in the next couple of decades. Bolstered by supply growth from biofuels as well as unconventional oil and gas, North America’s energy deficit will turn into a small surplus by 2030.
In contrast, Europe’s energy deficit remains at current levels for oil and coal but will increase by some two thirds for natural gas, supplied by LNG and pipelines from the Former Soviet Union.
China’s energy deficit across all fuels will widen by more than a factor of five and India’s, mainly of oil and coal, will more than double in the period to 2030.
BP’s work on the Energy Outlook 2030 supplements BP’s Statistical Review of World Energy which will next be published in June 2012.