Global energy demand is forecast to rise by 41% between 2012 and 2035, according to a new report BP Energy Outlook 2034 (Outlook), which was published by British oil and gas giant BP.
The authors of the fourth annual edition of Outlook explain that global energy demand continues to expand, driven mainly by China, India and other emerging economies, but it is slowing down.
During the latter years of the forecast period, energy demand is expected to decline in the advanced economies of Asia, Europe and North America. Approximately 90% of global energy demand growth is expected to come from the emerging economies.
Fossil fuels will continue to dominate the energy market
Fossil fuels will continue representing at least 80% of energy sources, with coal, natural gas and oil making up about 27% each of the total mix. The rest will come from hydroelectricity, nuclear power and renewables.
Natural gas is the fastest growing fossil fuel, and is being used increasingly as a cleaner and more environmentally friendly alternative to coal for several sectors, especially power generation.
BP Group Chief Executive, Bob Dudley, said:
“Outlook highlights the power of competition and market forces in unlocking technology and innovation to meet the world’s energy needs. These factors make us optimistic for the world’s energy future.”
“The Outlook leads us to three big questions: Is there enough energy to meet growing demand? Can we meet demand reliably? And what are the consequences of meeting demand? In other words, is the supply sufficient, secure and sustainable?”
“On the first question, our answer is a resounding ‘yes’. The growth rate for global demand is slower than what we have seen in previous decades, largely as a result of increasing energy efficiency. Trends in global technology, investment and policy leave us confident that production will be able to keep pace. New energy forms such as shale gas, tight oil, and renewables will account for a significant share of the growth in global supply.”
The energy security map will change
Regarding security, the reports offers a broadly positive view. While the US is heading towards total energy self-sufficiency, India, China and Europe will become increasingly dependent on imported energy sources.
Dudley notes that Asia is forecast to become the world’s major energy importing region “This need not be a cause for concern if the market is allowed to do its work, with new supply chains opening up to these big consuming regions.”
CO2 (carbon dioxide) emissions are expected to increase by 29% over the 2012-2035 period, with all that growth coming from the emerging economies.
As natural gas progressively replaces coal, emissions growth is expected to slow down, and actually decline in Europe and the US. In fact, towards latter part of the study period most advanced economies will have a combination of economic growth with falling energy use.
Christof Rühl, BP’s Chief Economist, said:
“This process shows the power of economic forces and competition. Put simply, people are finding ways to use energy more efficiently because it saves them money. This is also good for the environment – the less energy we use the less carbon we emit. For example CO2 emissions in the US are back at 1990s’ levels.”
According to Outlook, energy demand globally will continue to increase at an average of 1.5% annually to 2035, with a 2% average until 2020 and then 1.2% after that.
Ninety-five percent of this growth will come from non-OECD nations, mainly from India and China (at least half the increase).
By the end of the study period energy use in non-OECD countries is forecast to be 69% higher than in 2012, compared to just 5% among OECD nations. OECD nations’ energy demands will have fallen after 2030, even though their economies are projected to continue growing.
Even though new sources of energy are coming into the mix, fossil fuels – oil, gas and coal – will continue to be dominant. Nuclear power, hydroelectricity and renewables will account for 5-7% of energy sources each by 2035.
Oil as an energy source
Demand for oil will grow much more slowly than the other major fuels, approximately 0.8% per year. In spite of this slowdown, by 2035 demand for oil and other liquid fuels will be almost 19 million barrels per day higher than today.
Oil supply will probably come mainly from the Middle East and the Americas; more than half from non-OPEC nations. While mature sources are expected to decline, they will be more than offset by increased production in the US, Canada and Brazil.
The US is expected to overtake Saudi Arabia next year as the world’s biggest producer of oil and liquids. Over the study period US oil imports are forecast to drop by almost 75%.
While OPEC’s share of oil production is expected to fall, it will increase again after 2020.
Natural gas as an energy source
Natural gas production is forecast to grow considerably faster than the other two fossil fuels, with demand increasing at approximately 1.9% per year over the study period. Seventy-eight percent of this growth is expected to come from non-OECD countries.
Most of the growing demand for natural gas will come from industry and power generation.
By 2035, shale gas is expected to represent 68% of US gas production, 21% of world gas and 46% of the increase in global demand for gas. After 2020, the production of shale gas in the US is expected to slow down, while increasing in other parts of the world. Despite the decline in the US, the country should account for 71% of global shale gas production in 2035.
Demand for coal
Demand for coal is expected to grow slowly, but not as slowly as oil. Demand is projected to rise by 1.1% per year until 2035. After 2020 growth will slow down to 0.6% annually.
Approximately 87% of the growth will come from China and India. In 2012, China and India represented 58% of global coal demand, this is expected to rise to 64% by 2035.
Other sources of energy
Nuclear power is forecast to increase by approximately 1.9% per year during the study period.
About 96% of global growth will come from Russia, India and China. Nuclear power output is expected to fall in the European Union and United States.
Hydroelectric power output is predicted to increase by about 1.8% annually until 2035. Half of this growth will come from Brazil, India and China.
Renewables will continue growing rapidly as a class of energy, rising by about 6.4% per year during the study period.
Five percent of global electricity production today comes from renewables, this is expected to increase to 14% by 2035.
Renewables refers to energy that comes from:
- Geothermal heat
The authors wrote:
“While the OECD economies have led in renewables growth, renewables in the non-OECD are catching up and are expected to account for 45% of the total by 2035. Including biofuels, renewables are expected to have a higher share of primary energy than nuclear by 2025.”
Source: BP Energy Outlook 2035