In June 2014 BP presented its latest Statistical Review of World Energy. Now, in March, they have used these statistics to make estimates of future energy use. The results were presented in BP Energy Outlook 2035. This year, BP has made a special analysis of North America, i.e. Canada, the USA and Mexico. But before BP presented their predictions they made a disclaimer. The question is what value BP’s future scenarios have in the light of the disclaimer. Does BP really believe its scenarios describe our future? In any case we will certainly see references to their scenarios in the media. I suggested that you download a suitable version and study it. (Download). I will address some of BP’s future scenarios and if you wish to discuss what BP has presented then I invite you to make some comments on my blog. Here is their “Disclaimer”:
This presentation contains forward-looking statements, particularly those regarding global economic growth, population growth, energy consumption, policy support for renewable energies and sources of energy supply. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual outcomes may differ depending on a variety of factors, including product supply, demand and pricing; political stability; general economic conditions; legal and regulatory developments; availability of new technologies; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation. BP disclaims any obligation to update this presentation. Neither BP p.l.c. nor any of its subsidiaries accept liability for any inaccuracies or omissions or for any direct, indirect, special, consequential or other losses or damages of whatsoever kind in connection to this presentation or any information contained in it.
By 2035 the population of North America is calculated to increase by 85 million people. It is this increase and the increased income per person that is the driving force behind the growth in demand for energy. At the same time it is noted that the USA has been relegated to 2nd place among the world’s economies.
Meanwhile, the estimated growth in energy supply is rather modest (see the figure) and that means that BP is expecting that the future’s strong economic growth will occur without significantly increased energy use. Historically economic growth has required greater growth in energy use. For economic growth to occur with no increase in total energy use requires increased energy efficiency and in terms of transport vehicles we have already seen a clear improvement. It will be exciting to watch this development.
Here you can see the expected fantastic growth, reduction of CO2 emissions and nearly constant energy supply.
In terms of the fuel mix BP predicts a radical change in coal use. Despite that the USA has the world’s largest reserves of coal, BP believes that coal use will decrease to half of that of 2010. This decrease will be compensated for by increased use of natural gas and renewable energy, while oil consumption will be fairly steady. The change shown will primarily affect electricity generation.
In the image above you can see that it is electricity generation that requires more natural gas and, in the USA, this is to be delivered by production of shale gas that is expected to double by 2035. It would have been appropriate for BP also to describe which shale gas fields in the USA are to supply this gas. The best known, existing fields have already reached maximal production.
An increase of renewable energy to supply a few percent of the USA’s energy is predicted to occur but the rest of the change can be described with just one word, “FRACKING”. At the moment the fracking industry is experiencing its most rapid decline in active drilling rigs ever seen. They will soon be down to half the number of rigs that were active in November 2014. When we see that BP imagines that fracking-led production will double by 2035 then this will require twice as many active rigs as were drilling in November 2014. It is fracking that will also make North American a net hydrocarbon exporter.
In 20 years I will be quite old but I hope to still be around. I am completely certain that the scenarios that BP is now presenting will differ markedly from reality.