BP Energy Outlook 2030
BP Energy Outlook 2017 edition
Spencer Dale Group chief economist bp.com/energyoutlook #BPstats
Economic backdrop Contributions to GDP growth by region
Contributions to GDP growth by factor % per annum 5% Productivity 4%
% per annum 5% OECD
Population
4%
3%
3%
2%
2%
1%
1%
0%
0%
1975-1995 2017 Energy Outlook
1995-2015
2015-2035
India
Africa
Other
1975-1995 2
China
1995-2015
2015-2035 © BP p.l.c. 2017
Global energy demand Growth in GDP and primary energy
Thousands
Energy consumption by region Billion toe 18 16
14 12 10
% per annum 6%
Other Africa Other non-OECD Asia India China OECD
5%
4% 3% 2%
8
1%
6
0%
4
-1%
2
-2%
0 1965 1975 1985 1995 2005 2015 2025 2035
-3%
2017 Energy Outlook
Energy intensity GDP Primary energy
3
1965- 1975- 1985- 1995- 2005- 2015- 20251975 1985 1995 2005 2015 2025 2035 © BP p.l.c. 2017
Fuel mix Shares of primary energy
Primary energy consumption by fuel Billion toe 18 16 14 12 10
50%
Renewables* Hydro Nuclear Coal Gas Oil
40% 30%
8
20%
6 4
10%
2
Oil
Coal Gas
Hydro
Renewables*
Nuclear 0% 1965 1975 1985 1995 2005 2015 2025 2035
0 1965 1975 1985 1995 2005 2015 2025 2035 *Renewables includes wind, solar, geothermal, biomass, and biofuels 2017 Energy Outlook
4
© BP p.l.c. 2017
China’s declining dependency on coal
Thousands
Coal consumption growth by region Billion toe 1.5
1.0
Shares of primary energy in China 80%
OECD Other non-OECD Asia India China Other Total
70%
Coal
60% 50% 40%
0.5
30% 20%
0.0
10%
Oil Gas
0% 1975 1985 1995 2005 2015 2025 2035
-0.5 1965- 1975- 1985- 1995- 2005- 2015- 20251975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Non-fossil
5
© BP p.l.c. 2017
Growth of the power sector Power sector’s share of primary energy consumption
Electricity consumption per capita MWh 10
50%
OECD China
8 40%
6
Coal World
Gas
4
30%
India
Renew.
2
Hydro
0 1965 1975 1985 1995 2005 2015 2025 2035
20% 1965 1975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Africa
6
© BP p.l.c. 2017
Oil • How might electric cars and the broader mobility revolution affect oil demand? • How might the abundance of oil resources affect the behaviour of low-cost oil producers?
2017 Energy Outlook
7
© BP p.l.c. 2017
Oil demand Liquids demand growth
Liquids demand
Mb/d, average annual growth 2.0 Power Industry 1.5 Transport
Mb/d 120
Power
100
Buildings Industry
80
Ships, trains & planes
40 20
1.0
Non-combusted
60
Buildings Non-combusted Total
0.5
Trucks 0.0
Transport Cars
0 2000 2005 2010 2015 2020 2025 2030 2035
-0.5
2005- 2010- 2015- 2020- 2025- 20302010 2015 2020 2025 2030 2035
Liquids includes oil, biofuels and derivatives of coal and natural gas 2017 Energy Outlook
8
© BP p.l.c. 2017
Growth of electric cars Illustrative path for battery pack costs
The global car fleet: 2015-2035 Billions of vehicles 2.0 Electric cars Conventional cars 1.5 Non-OECD OECD
$/kWh
1.0
150
250 Battery pack costs*
200
Range of estimates of cost parity between electric and oil-powered cars
100
0.5
50
0.0
By region
By type
2015
By region
By type
0 2015
2035
2020
2025
2030
2035
*For a Battery Electric Vehicle with a 60 kWh pack. Cost projections depend heavily on the degree of EV uptake, which is uncertain, so ranges should be treated as illustrative only. Current estimates of battery costs also vary widely, but this uncertainty is not shown
2017 Energy Outlook
9
© BP p.l.c. 2017
Liquid fuel demand from cars Decomposing changes in liquids demand from cars: 2015-2035 Mb/d 45 40 35 23
30
17
25
0.2
20
1.2
15 10
23
19
5 0 2015
2017 Energy Outlook
Growth in demand for travel
Gains in fuel efficiency 10
Switching to natural gas vehicles
Switching to electric vehicles
2035
© BP p.l.c. 2017
Mobility revolution • Electric cars: lead to a switch away from conventional cars
• Autonomous vehicles: improve fuel efficiency via efficient driving • Car sharing: can amplify the effects of new-technology cars • Ride pooling: reduce total miles driven by pooling journeys
2017 Energy Outlook
11
© BP p.l.c. 2017
Mobility revolution scenarios Digital revolution: Impact on oil demand in cars in 2035
Electric revolution: Impact on oil demand in cars in 2035
Mb/d 25
Mb/d 25
20
20
15
15
2017 Energy Outlook
12
© BP p.l.c. 2017
Oil • How might electric cars and the broader mobility revolution affect oil demand? • How might the abundance of oil resources affect the behaviour of low-cost oil producers?
2017 Energy Outlook
13
© BP p.l.c. 2017
Abundance of oil resources Oil supply of lower-cost producers
Estimates of technically recoverable resources and cumulative oil demand Trillion barrels 2.8 Europe 2.4 2.0 1.6
Mb/d 70
Asia Africa
60
S&C America N America
1.2
0.0
20152035
20152050
US
40
Russia
55% 50%
Middle East OPEC
10 0 1985
Cumulative demand Technically recoverable resources
2017 Energy Outlook
60%
50
20 Middle East
65%
Low-cost producer’s share of global liquids production (right axis)
30
CIS
0.8 0.4
Share
14
1995
2005
2015
2025
45% 40% 2035
© BP p.l.c. 2017
Natural gas Gas supply growth: 2015-2035
Gas consumption by sector
Bcf/d 140
Bcf/d 500
120
Australia
100
Russia
80
Middle East
60 40 20
Other Africa China
Other
400
300 200 100
US
0 Shale 2017 Energy Outlook
Transport Buildings Power Non-combusted Industry
0 1965 1975 1985 1995 2005 2015 2025 2035
Conventional Conventional decline growth 15
© BP p.l.c. 2017
Growth of LNG LNG supply
LNG demand
Bcf/d 80
70 60 50 40
Bcf/d 80
Other Russia Africa United States Australia Qatar
70 60
50 40
30
30
20
20
10
10
0 1990 2017 Energy Outlook
2005
Other Middle East S&C America Asia Europe
2020
0 1990
2035 16
2005
2020
2035 © BP p.l.c. 2017
LNG Trade Net LNG exports and imports in 2035 (Bcf/d) North America
Russia
Europe 17
22
5 Middle East
Other Asia
9 44 S&C America
Exports Imports 2017 Energy Outlook
Africa 7
2
Australia
17
17
17
© BP p.l.c. 2017
Carbon emissions
2017 Energy Outlook
18
© BP p.l.c. 2017
Carbon emissions Contributions to slower growth of carbon emissions
Carbon emissions
% per annum 2.5%
Billion tonnes CO2 40 IEA 450
2.0%
GDP
30
Base case
Energy intensity
1.5%
20 Fuel mix
1.0%
10
0.5% 0.0% 1995-2015 2017 Energy Outlook
0 1965 1975 1985 1995 2005 2015 2025 2035
2015-2035 19
© BP p.l.c. 2017
Faster transition pathways Carbon emissions
Reductions in emissions versus base case
Billion tonnes CO2 40
Billion tonnes CO2 in 2035 0
2
4
6
8
10
Power
CCUS*
30
Even faster transition Industry & Buildings
Base case Faster transition Even faster transition 20 1995
Faster transition
2005
2015
2025
Transport 2035 *Carbon
2017 Energy Outlook
20
capture, use and storage (predominantly in power sector) © BP p.l.c. 2017
Energy outlook under alternative transition pathways The changing fuel mix
Annual demand growth by fuel Mtoe per annum 250 200 150
Non-fossil
% of primary energy 50% Oil
Coal
40%
Coal
Gas
Non-fossil
Gas
100
Oil
30%
Total
50
20%
0 -50
10%
-100
CO2
-150 19952015 2017 Energy Outlook
Base
FT
0%
EFT
2015
Base
FT
EFT
2035
2015-35 21
© BP p.l.c. 2017
Comparison with other low carbon scenarios Faster transition
Even faster transition
IEA 450
MIT 2° Base
IHS Markit Greenpeace ‘Solar ‘Revolution’ Efficiency’
Growth rate (% p.a.) 2015-35 Carbon emissions
-0.7%
-2.0%
-2.0%
-2.0%
-2.8%
-3.2%
Total energy
0.9%
0.8%
0.4%
0.5%
-0.7%
-0.1%
Energy intensity
-2.4%
-2.5%
-3.0%
-2.9%
-4.0%
-3.5%
Carbon intensity
-1.5%
-2.7%
-2.3%
-2.5%
-2.1%
-3.5%
Share of total energy, 2035
Oil & gas
51%
48%
48%
46%
51%
39%
Renewables
16%
23%
17%
29%
19%
38%
>100%
89%
77%
74%
58%
35%
Share of abatement vs 2015 Power sector
2017 Energy Outlook
22
© BP p.l.c. 2017
Risks to gas demand Global primary energy shares
Natural gas growth 2015-2035
% of primary energy 40% Base case Slower gas case 35%
30%
Mtoe per annum 20 Increasing climate and environmental policies 15
Coal
Coal
10
25% 20%
Gas 5
15% 0
10% 1965 1975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Slower gas case 23
Base case
Faster Even faster transition transition © BP p.l.c. 2017
BP Energy Outlook 2017 edition
bp.com/energyoutlook #BPstats
Spencer Dale Group chief economist bp.com/energyoutlook #BPstats
Economic backdrop Contributions to GDP growth by region
Contributions to GDP growth by factor % per annum 5% Productivity 4%
% per annum 5% OECD
Population
4%
3%
3%
2%
2%
1%
1%
0%
0%
1975-1995 2017 Energy Outlook
1995-2015
2015-2035
India
Africa
Other
1975-1995 2
China
1995-2015
2015-2035 © BP p.l.c. 2017
Global energy demand Growth in GDP and primary energy
Thousands
Energy consumption by region Billion toe 18 16
14 12 10
% per annum 6%
Other Africa Other non-OECD Asia India China OECD
5%
4% 3% 2%
8
1%
6
0%
4
-1%
2
-2%
0 1965 1975 1985 1995 2005 2015 2025 2035
-3%
2017 Energy Outlook
Energy intensity GDP Primary energy
3
1965- 1975- 1985- 1995- 2005- 2015- 20251975 1985 1995 2005 2015 2025 2035 © BP p.l.c. 2017
Fuel mix Shares of primary energy
Primary energy consumption by fuel Billion toe 18 16 14 12 10
50%
Renewables* Hydro Nuclear Coal Gas Oil
40% 30%
8
20%
6 4
10%
2
Oil
Coal Gas
Hydro
Renewables*
Nuclear 0% 1965 1975 1985 1995 2005 2015 2025 2035
0 1965 1975 1985 1995 2005 2015 2025 2035 *Renewables includes wind, solar, geothermal, biomass, and biofuels 2017 Energy Outlook
4
© BP p.l.c. 2017
China’s declining dependency on coal
Thousands
Coal consumption growth by region Billion toe 1.5
1.0
Shares of primary energy in China 80%
OECD Other non-OECD Asia India China Other Total
70%
Coal
60% 50% 40%
0.5
30% 20%
0.0
10%
Oil Gas
0% 1975 1985 1995 2005 2015 2025 2035
-0.5 1965- 1975- 1985- 1995- 2005- 2015- 20251975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Non-fossil
5
© BP p.l.c. 2017
Growth of the power sector Power sector’s share of primary energy consumption
Electricity consumption per capita MWh 10
50%
OECD China
8 40%
6
Coal World
Gas
4
30%
India
Renew.
2
Hydro
0 1965 1975 1985 1995 2005 2015 2025 2035
20% 1965 1975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Africa
6
© BP p.l.c. 2017
Oil • How might electric cars and the broader mobility revolution affect oil demand? • How might the abundance of oil resources affect the behaviour of low-cost oil producers?
2017 Energy Outlook
7
© BP p.l.c. 2017
Oil demand Liquids demand growth
Liquids demand
Mb/d, average annual growth 2.0 Power Industry 1.5 Transport
Mb/d 120
Power
100
Buildings Industry
80
Ships, trains & planes
40 20
1.0
Non-combusted
60
Buildings Non-combusted Total
0.5
Trucks 0.0
Transport Cars
0 2000 2005 2010 2015 2020 2025 2030 2035
-0.5
2005- 2010- 2015- 2020- 2025- 20302010 2015 2020 2025 2030 2035
Liquids includes oil, biofuels and derivatives of coal and natural gas 2017 Energy Outlook
8
© BP p.l.c. 2017
Growth of electric cars Illustrative path for battery pack costs
The global car fleet: 2015-2035 Billions of vehicles 2.0 Electric cars Conventional cars 1.5 Non-OECD OECD
$/kWh
1.0
150
250 Battery pack costs*
200
Range of estimates of cost parity between electric and oil-powered cars
100
0.5
50
0.0
By region
By type
2015
By region
By type
0 2015
2035
2020
2025
2030
2035
*For a Battery Electric Vehicle with a 60 kWh pack. Cost projections depend heavily on the degree of EV uptake, which is uncertain, so ranges should be treated as illustrative only. Current estimates of battery costs also vary widely, but this uncertainty is not shown
2017 Energy Outlook
9
© BP p.l.c. 2017
Liquid fuel demand from cars Decomposing changes in liquids demand from cars: 2015-2035 Mb/d 45 40 35 23
30
17
25
0.2
20
1.2
15 10
23
19
5 0 2015
2017 Energy Outlook
Growth in demand for travel
Gains in fuel efficiency 10
Switching to natural gas vehicles
Switching to electric vehicles
2035
© BP p.l.c. 2017
Mobility revolution • Electric cars: lead to a switch away from conventional cars
• Autonomous vehicles: improve fuel efficiency via efficient driving • Car sharing: can amplify the effects of new-technology cars • Ride pooling: reduce total miles driven by pooling journeys
2017 Energy Outlook
11
© BP p.l.c. 2017
Mobility revolution scenarios Digital revolution: Impact on oil demand in cars in 2035
Electric revolution: Impact on oil demand in cars in 2035
Mb/d 25
Mb/d 25
20
20
15
15
2017 Energy Outlook
12
© BP p.l.c. 2017
Oil • How might electric cars and the broader mobility revolution affect oil demand? • How might the abundance of oil resources affect the behaviour of low-cost oil producers?
2017 Energy Outlook
13
© BP p.l.c. 2017
Abundance of oil resources Oil supply of lower-cost producers
Estimates of technically recoverable resources and cumulative oil demand Trillion barrels 2.8 Europe 2.4 2.0 1.6
Mb/d 70
Asia Africa
60
S&C America N America
1.2
0.0
20152035
20152050
US
40
Russia
55% 50%
Middle East OPEC
10 0 1985
Cumulative demand Technically recoverable resources
2017 Energy Outlook
60%
50
20 Middle East
65%
Low-cost producer’s share of global liquids production (right axis)
30
CIS
0.8 0.4
Share
14
1995
2005
2015
2025
45% 40% 2035
© BP p.l.c. 2017
Natural gas Gas supply growth: 2015-2035
Gas consumption by sector
Bcf/d 140
Bcf/d 500
120
Australia
100
Russia
80
Middle East
60 40 20
Other Africa China
Other
400
300 200 100
US
0 Shale 2017 Energy Outlook
Transport Buildings Power Non-combusted Industry
0 1965 1975 1985 1995 2005 2015 2025 2035
Conventional Conventional decline growth 15
© BP p.l.c. 2017
Growth of LNG LNG supply
LNG demand
Bcf/d 80
70 60 50 40
Bcf/d 80
Other Russia Africa United States Australia Qatar
70 60
50 40
30
30
20
20
10
10
0 1990 2017 Energy Outlook
2005
Other Middle East S&C America Asia Europe
2020
0 1990
2035 16
2005
2020
2035 © BP p.l.c. 2017
LNG Trade Net LNG exports and imports in 2035 (Bcf/d) North America
Russia
Europe 17
22
5 Middle East
Other Asia
9 44 S&C America
Exports Imports 2017 Energy Outlook
Africa 7
2
Australia
17
17
17
© BP p.l.c. 2017
Carbon emissions
2017 Energy Outlook
18
© BP p.l.c. 2017
Carbon emissions Contributions to slower growth of carbon emissions
Carbon emissions
% per annum 2.5%
Billion tonnes CO2 40 IEA 450
2.0%
GDP
30
Base case
Energy intensity
1.5%
20 Fuel mix
1.0%
10
0.5% 0.0% 1995-2015 2017 Energy Outlook
0 1965 1975 1985 1995 2005 2015 2025 2035
2015-2035 19
© BP p.l.c. 2017
Faster transition pathways Carbon emissions
Reductions in emissions versus base case
Billion tonnes CO2 40
Billion tonnes CO2 in 2035 0
2
4
6
8
10
Power
CCUS*
30
Even faster transition Industry & Buildings
Base case Faster transition Even faster transition 20 1995
Faster transition
2005
2015
2025
Transport 2035 *Carbon
2017 Energy Outlook
20
capture, use and storage (predominantly in power sector) © BP p.l.c. 2017
Energy outlook under alternative transition pathways The changing fuel mix
Annual demand growth by fuel Mtoe per annum 250 200 150
Non-fossil
% of primary energy 50% Oil
Coal
40%
Coal
Gas
Non-fossil
Gas
100
Oil
30%
Total
50
20%
0 -50
10%
-100
CO2
-150 19952015 2017 Energy Outlook
Base
FT
0%
EFT
2015
Base
FT
EFT
2035
2015-35 21
© BP p.l.c. 2017
Comparison with other low carbon scenarios Faster transition
Even faster transition
IEA 450
MIT 2° Base
IHS Markit Greenpeace ‘Solar ‘Revolution’ Efficiency’
Growth rate (% p.a.) 2015-35 Carbon emissions
-0.7%
-2.0%
-2.0%
-2.0%
-2.8%
-3.2%
Total energy
0.9%
0.8%
0.4%
0.5%
-0.7%
-0.1%
Energy intensity
-2.4%
-2.5%
-3.0%
-2.9%
-4.0%
-3.5%
Carbon intensity
-1.5%
-2.7%
-2.3%
-2.5%
-2.1%
-3.5%
Share of total energy, 2035
Oil & gas
51%
48%
48%
46%
51%
39%
Renewables
16%
23%
17%
29%
19%
38%
>100%
89%
77%
74%
58%
35%
Share of abatement vs 2015 Power sector
2017 Energy Outlook
22
© BP p.l.c. 2017
Risks to gas demand Global primary energy shares
Natural gas growth 2015-2035
% of primary energy 40% Base case Slower gas case 35%
30%
Mtoe per annum 20 Increasing climate and environmental policies 15
Coal
Coal
10
25% 20%
Gas 5
15% 0
10% 1965 1975 1985 1995 2005 2015 2025 2035 2017 Energy Outlook
Slower gas case 23
Base case
Faster Even faster transition transition © BP p.l.c. 2017
BP Energy Outlook 2017 edition
bp.com/energyoutlook #BPstats
