Oil And Gas Set To Remain A Vital Part Of The Future Energy Mix
In this age of energy transition with the world moving towards a reduced carbon future, the role of oil and gas companies has come increasingly under the spotlight. What part do they have if any in the future energy mix? Despite the whisperings of some environmental groups there is going to be a role to play for many decades ahead.
At this week IP Week in London Bob Dudley, BP group chief executive addressed that very issue. In terms of what the future holds for the industry, Dudley referred heavily to the scenarios from the latest edition of the BP Energy Outlook that was published earlier this month. “We make a point of saying the Energy Outlook is not a forecast,” he said. “The future for energy demand and supply has many possible scenarios and depends on a range of factors to do with society, geopolitics, technology, and policy.”
Managing uncertainty
That uncertainty makes any precise prediction impossible, but it is helpful to make projections – one of which BP call the evolving transition (ET) scenario. It assumes that government policies, technology, and social preferences continue to evolve as in the recent past. If that happens, global energy demand is likely to grow by around a third by 2040. Although that is significant growth, it is slower than the past two decades, primarily driven by improving living standards in Asia, particularly China and India.
“It’s coming from a growing middle class having greater access to household appliances, cleaner cooking facilities, vehicles for mobility, smartphones for connectivity,” he added. “And it’s people traveling outside their own country as tourists for the first time.”
We already see these changes in demand, and there are equally significant changes in the way that the energy is being supplied. Renewable energy is projected to grow faster than any fuel in history. Natural gas is set to grow strongly and overtake coal in the fuel mix. Nonetheless, that ET scenario also sees carbon emissions rising…
