BP produces two important energy documents a year, the “Statistical Review of World Energy” and the “Energy outlook”. The energy outlook has just been published looking forward to 2035. This post will pick out some of the most salient points and make some comments on them.
- BP see energy demand rising inexorably. They say that global population will be 1.6 billion higher in 2035 and these people will need at least some energy. Thus energy demand will rise almost 40% over the next 20 years. My view is this is broadly correct, global population will not have peaked in 20 years and it seems a likely value. The BP energy outlook examines the economics behind this data which I have ignored.
- The energy outlook 2035 prediction of where this energy demand growth comes from is very interesting. It looks like energy demand has peaked in the developed world. All future growth comes from the developing world. This is something this blog has covered before. Again this seems likely but is predicated on off-shoring and globalisation. With peak oil this will go into reverse and may reverse this trend in both the developed and developing world. At the same time this growth in energy demand is slowing everywhere.
- BP see where this energy is coming from changing. The share from coal and oil plunges, gas rises and renewables overtakes nuclear and hydro. Whilst the share of of coal and oil declines the total amount used is still growing overall (developed world only). BP still see a major role for oil and gas (funny that) and probably underestimate renewables contribution (most people have in the past).
- On costs they give a wide range but solar could be competitive with onshore wind, gas and coal by 2035. Nuclear is not even compared! Again this is conservative on solar. Once solar hits grid parity which is close in many countries its growth will be explosive meaning costs plummet further.
- One of the most interesting predictions in the Energy outlook 2035 is around shale oil and gas. BP think the contribution made by these will be negligible except in the USA. This is down to social and geological factors. Like the IEA BP think that US shale oil will go into decline soon but gas won’t. I’m not sure I agree about US gas production, but its hard to argue with their overall view. Shale is never going to happen in most places.
- The most worrying finding is that carbon emissions rise 25% by 2035. They have to be falling long before this to stand any chance of limiting any increase to 2ºC. The reasons for this predicted failure are insufficient penetration of renewables in my view. One piece of good news from the energy outlook is that energy efficiency is rising and making an increasing contribution
Overall can we meet all this increasing energy demand from fossil fuels? It seems unlikely. Peak oil is not dead merely sleeping.