BP Energy Outlook Sees The World Through Oil Colored Glasses
Each year, BP issues its Energy Outlook, an assessment that “outlines the ‘most likely’ path for the global energy landscape — supply and demand — over the next 20 years.” Not surprisingly, one of the world’s largest oil companies sees oil playing an essential role in meeting the world’s energy needs far into the future.
In this year’s report, BP says total global energy demand will increase by 34% between now and 2035. According to CleanTechnica, it predicts, “This growth in overall demand includes significant changes in the energy mix, with lower-carbon fuels growing faster than carbon-intense fuels as the world begins to transition to a lower-carbon future.”
OK. We assume after the Paris accords that renewables will play a larger role. However, BP says, “Despite the rapid growth of other sources, the Outlook projects that fossil fuels will remain the dominant form of energy over the period to 2035, meeting 60% of the projected increase in demand and accounting for almost 80% of the world’s total energy supplies in 2035.”
“In the middle of a downturn in oil and gas prices, it is important not only to adapt to the current tough conditions, but also to prepare for the next set of challenges,” says Bob Dudley, BP’s group chief executive. “Energy is a long-wavelength industry and we need a long term perspective of how the energy landscape we operate in is likely to evolve.”
The BP report expects renewables to account for only 9% of the world’s total energy needs by 2035. That is far lower than many proponents of alternative energy anticipate. Bloomberg New Energy Finance and the International Renewable Energy Agency both predict renewable energy could supply as much as 30% of global energy demand by 2030, especially if the accords reached in Paris are implemented by major emissions sources like the US, China, and India.
“This is a story of how an oil and gas company predicts the rosy prospects of oil and gas companies,” explained Greg Muttitt of Oil Change International. “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.
“Every year, BP has predicted that the growth in renewable energy will slow down, and each time it has been wrong. This year, again it massively downplays renewables, estimating they will provide a mere 15% of world electricity in 2030 – in spite of wind and solar achieving grid parity in most of the world, and in spite of government action arising from the Paris Agreement.”
“Dressed in a veneer of concern about climate change, in fact BP’s outlook is a public relations exercise, designed to boost fossil fuels and undermine public faith in clean alternatives. Meanwhile it deflects responsibility to government or to coal companies, to distract from its own extraction of oil and gas. This is not a credible view of the future of energy.”
Luke Sussams, senior analyst at the Carbon Tracker Initiative, agrees. “BP’s energy outlook to 2035 has changed little over the last year,” said “It appears to state the COP21 international climate change agreement will make little impact in suppressing future fossil fuel demand, which continues to meet more than 80% of global energy needs. As in previous years, BP’s outlook highlights key uncertainties such as lower economic growth or a faster shift to a low carbon economy. But these considerations do not make it into its base case.
“For example, BP foresees global energy demand increasing rapidly off the back of emerging economies of Asia. But, China’s economy is slowing faster than anyone thought, lowering energy demand growth. Further, the overall growth narrative in the entire region is changing as concerns grow over the huge debts China amassed to fuel its post-2008 manufacturing boom. We believe the base case does not adequately reflect the possible downside scenarios in the nine key demand assumptions highlighted in Carbon Tracker’s Lost in Transition report published late last year.”
Can BP be faulted for writing reports that favor its own best case scenario for earning profits? Of course not. But its sunny optimism about the dominant role oil will play in the future does underscore what “business as usual” will mean for the earth’s environment. We simply have to do better than “same old, same old” when it comes to protecting our home.
Maybe Elon Musk and some of his well heeled pals are content to decamp for Mars when the earth is destroyed, but for the rest of us, we need to deal with reality immediately, if not sooner.