BP releases Energy Outlook 2035

18 February 2015

BP has released the 2015 edition of their annual Energy Outlook, covering world’s energy consumption trends over the period of 2015-2035. In spite of the recent volatility in energy markets, ongoing economic expansion in Asia—particularly in China and India—is predicted to drive continued growth in the world’s demand for energy over the next 20 years, with global demand for energy expected to rise by 37% from 2013 to 2035, or by an average of 1.4% a year.

Key energy trends predicted by the Outlook are:

• Demand for oil will increase by around 0.8% each year to 2035. The rising demand comes entirely from the non-OECD countries; oil consumption within the OECD peaked in 2005 and by 2035 is expected to have fallen to the level seen in 1986.

  The current weakness in the oil market, which stems in large part from strong growth in tight oil production in the United States, is likely to take several years to work through. In 2014, tight oil production drove US oil output higher by 1.5 million barrels a day—the largest single-year rise in US history. But further out, the growth in tight oil is likely to slow, and Middle East production will gain ground again.

  By the 2030s the US is likely to have become self-sufficient in oil, after having imported 60% of its total demand as recently as 2005.

• Demand for natural gas will grow fastest of the fossil fuels over the period to 2035, increasing by 1.9% a year, led by demand from Asia. Half the increased demand will be met by rising conventional gas production, primarily in Russia and the Middle East, and about a half from shale gas. By 2035, North America, which currently accounts for almost all global shale gas supply, will still produce around three quarters of the total.

  As demand for gas grows, there will be increasing trade across regions and by the early 2020s Asia Pacific will overtake Europe as the largest net gas importing region. The continuing growth of shale gas will also mean that in the next few years North America will switch from being a net importer to net exporter of gas. The overwhelming majority of the increase in traded gas will be met through increasing LNG supplies. Production of LNG will grow almost 8% a year through 2020. By 2035, LNG will have overtaken pipelines as the dominant form of traded gas.

• Coal had been the fastest growing of the fossil fuels over the past decade, driven by Chinese demand. However, over the next 20 years the growth of coal will slow down to 0.8% a year, marginally slower than oil. The change is driven by (1) moderating and less energy-intensive growth in China, (2) the impact of regulation and policy on the use of coal in both the US and China, and (3) the plentiful supplies of gas replacing coal from power generation.

The Outlook also considers global CO₂ emissions to 2035 based on its projections of energy markets and carbon-related policies. The projection shows emissions rising by 1% a year to 2035, or by 25% over the period. This growth trajectory is significantly above the path recommended by scientists as illustrated, for example, by the IEA’s “450 Scenario”, noted BP.

To abate carbon emissions further would require additional significant steps by policy makers beyond the steps already assumed, and the Outlook provides comparative information for possible options and their relative impacts on emissions.

Source: BP