One of the world’s six “supermajor” oil and gas companies, BP, has released its annual Energy Outlook, and in addition to predicting a 37% increase in global demand for energy, the company also believes that — if nothing is done to corral them — carbon dioxide emissions are likely to rise by 25% by 2035.
The Outlook, amongst many other criteria, considered global CO2 emissions based on the company’s projections of energy markets and likely evolutions of carbon-related policies. The projections show that emissions will rise by 1% each year by 2035, totaling 25%, “on a trajectory significantly above the path recommended by scientists as illustrated, for example, by the IEA’s ‘450 Scenario’.”
“The most likely path for carbon emissions, despite current government policies and intentions, does not appear sustainable,” writes Bob Dudley, Group chief executive. “The projections highlight the scale of the challenge facing policy makers at this year’s UN-led discussions in Paris. No single change or policy is likely to be sufficient on its own. And identifying in advance which changes are likely to be most effective is fraught with difficulty.”
On the whole, despite the recent weakening in the global energy market, continued economic growth in Asia — particularly in China and India — is expected to drive the planet’s demand for energy over the next 20 years, which is expected to rise by 37% from 2013 to 2035 on an average of 1.4% per year.
In terms of million tonnes of oil equivalent (Mtoe), the demand for energy is just going to continue to grow.
And as BP’s chief economist, Spencer Dale says, “the vast majority of growth” is expected to be “coming from fast-growing developing economies such as India and China.”
Spencer Dale was highlighted by BP in a video released in conjunction with the Outlook.
Interestingly, BP doesn’t see renewables making up much of the overall energy mix in 2035, but whether because it is being more realistic than those of us within the industry, or because they are paid to be biased, I’m unsure.
But it’s BP’s analysis of carbon emissions that is really interesting, and beneficial coming from such a major contributor of said-emissions.
Dale highlights three “additional messages” that came out of their analysis that deal with carbon emissions:
First, no single initiative or improvement is likely to be sufficient on its own. Second, it is really hard for policymakers to pick in advance which of those improvements will be a winner. Third, the best way to pick those winners and losers is to let the market decide; for policymakers to take steps that result in a meaningful global price for carbon. That would provide the incentives for everybody to play their role – energy companies in terms of the types of fuel they produce and consumers in terms of the types of energy that they demand.
This is the sort of talk we expect to hear from “supermajor” oil and gas companies, as it allows for their business models to continue relatively unaffected — maybe with only slight adjustments to production. And while, in broad strokes, Dale is correct — it is very difficult to pick the best initiative or improvement — solid governmental decisions need to be made to provide the investment security necessary for renewables and energy efficiency methods to gain the traction their dirtier-cousins already hold (thanks in large part to governmental incentives).
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