By February 10, 2016 Read More →

Fossil fuels make up 80% of global energy supplies in 2035 – BP forecast

BP forecasts demand for natural gas to grow 1.9%/year and oil to grow .9%/year

‘Tis the season for energy super-majors to issue annual energy forecasts – this time from BP – and so far the trends are the same: Growing renewable energy, declining carbon intensity coupled with rapidly growing energy demand, and continuing dominance of fossil fuels in 2035.

BPDespite current weakness in global energy markets and the slowdown in China’s growth, BP says demand for energy will continue to grow over the next 20 years and beyond as the world economy expands and more energy is required to power the higher level of activity.

According to the 2016 edition of the BP Energy Outlook, published Wednesday, global demand for energy is expected to increase by 34 per cent between 2014 and 2035, or by an average of 1.4 per cent per year.

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.

The Outlook looks at long-term energy trends and develops projections for world energy markets over the next two decades. The 2016 edition was launched in London by Spencer Dale, BP’s group chief economist, and Bob Dudley, group chief executive.


Bob Dudley, BP.

“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. 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,” said Dudley.

“As this year’s Outlook demonstrates, the world is going to continue to demand growing supplies of energy but the mix of those supplies is changing and becoming less carbon-intense. However, further policy action may be necessary to meet international targets to limit carbon emissions.”

Oil and gas remain a key source of growth

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 per cent of the projected increase in demand and accounting for almost 80 per cent of the world’s total energy supplies in 2035.

BPGas will be the fastest growing fossil fuel, increasing 1.8 per cent a year and oil will grow steadily at 0.9 per cent a year, although its share of the energy mix continues to decline.

Growth of coal is projected to slow sharply, such that by 2035 its share in the energy mix is at an all-time low, with gas replacing it as the second-largest fuel source.

Essential things to know about the energy future

Non-fossil fuels are projected to grow even faster than anticipated in last year’s Outlook.

Renewables, including biofuels, are projected to grow at around 6.6 per cent per year, and as a result their share in the energy mix increases from 3 per cent today to 9 per cent by 2035.

“The outlook for the next 20 years is for continuing growth of energy demand as the world economy expands and more energy is required to power higher levels of activity,” said Spencer Dale.

Income and population are the key drivers behind the growing demand for energy. By 2035 the world’s population is expected to reach nearly 8.8 billion, meaning an additional 1.5 billion people will need energy. Over that same period, GDP is expected to more than double, with China and India accounting for half of the projected increase.

“The continuing reform of China’s economy towards a more sustainable pattern of growth causes growth in its energy demand to slow sharply – weighing most heavily on global coal, which grows at less than a fifth of the rate seen over the past 20 years,” explained Dale.

“The world is fundamentally changing and we see evidence of this in how and what type of energy is consumed.”

More than half of the increase in global energy is used for power generation, with much of that increase taking place in regions where a large part of the population have limited access to electricity.

Power generation is a sector where all fuels compete and it will play a major role in the evolution of the fuel mix as renewables and gas replace coal-fired power stations. Renewables account for over a third of the expected growth in power generation.

Strong growth in emerging economies will drive the demand for oil, with China and India accounting for over half of the increase in world demand, as the number of vehicles on the planet more than doubles.

Increases in supply

The supply of natural gas grows robustly, underpinned by strong increases in shale gas production around the world – this is projected to grow at 5.6 per cent a year.

The share of shale gas in total gas production rises from 10 per cent in 2014 to nearly 25 per cent by 2035.

Global liquids supply will expand by nearly 19 million barrels a day by 2035, led by growth in non-OPEC supply, particularly US shale oil.

OPEC is likely to act to maintain its market share of around 40 per cent.

Carbon emissions growth halves over the next 20 years

The growth rate of carbon emissions over the period of the Outlook is expected to more than halve relative to the past 20 years – growing by 0.9 per cent a year, compared to 2.1 per cent a year. The sharp reduction in the rate of emissions growth reflects, in almost equal parts, faster improvements in energy efficiency and a reduction in the carbon intensity of energy.

The world is starting to make the transition to a lower-carbon energy system, and the COP21 meeting in Paris last December represented a significant step on this journey.

But carbon emissions are still projected to be growing, suggesting the need for further policy action. A meaningful global price for carbon is likely to be the most efficient mechanism through which to achieve an even faster transition to a low carbon world.

Fast facts:

  • Renewables account for a quarter of global primary energy growth out to 2035 and over a third of the growth in global power generation.
  • EU energy demand in 2035 is back to where it was 50 years earlier, despite the economy being almost 150 per cent bigger.
    The US achieves overall energy self-sufficiency by 2021 and oil self-sufficiency by 2030.
  • China surpasses the US as the world’s leading oil consumer by 2035, but per capita oil consumption will remain just 27 per cent of the US.
  • The growth of global gas consumption from 2014 to 2035 is more than the current gas production of US and Russia combined.
    By 2035 coal accounts for less than 25 per cent of primary energy, its lowest share since the industrial revolution.
  • China adds more renewable power than the EU and US combined.
  • Spare refining capacity plus planned additions over the next five years is enough to meet the growth in crude supplies over the Outlook.


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