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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 results 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.
Energy Outlook 2030 2 BP 2011
Contents
Page Introduction Global energy trends Oil (and other liquid fuels) Gas, power and coal What can bend the trend? Key themes Data sources 4 7 25 45 63 75 80
BP 2011
Welcome to BPs Energy Outlook 2030. The outlook for global energy is not just a matter for energy companies: its an issue for all of us. Around the world, there is a lively and important conversation taking place on the choices that face us all as consumers, producers, investors and policy-makers. By sharing this Energy Outlook, we hope to contribute to that discussion. Our starting point in contributing to this debate has been BPs work on the Statistical Review of World Energy, which this year celebrates its 60th anniversary. The Statistical Review, which documents trends in the production and use of energy, started out as an internal BP document and was made public for the first time in 1956. In a similar way, the Energy Outlook, which contains our projections of future energy trends, has been used only internally so far. However, we feel it is part of our responsibility as a company to make important information and analysis available for public debate all the more so if the issue at hand is as vital to all of us as is energy, its relation to economic development on one side, and to climate change on the other. In this outlook we seek to identify long term energy trends, and then add our views on the evolution of the world economy, of policy, and technology, to develop a projection for world energy markets to 2030. It is a projection, not a proposition, and this is an important distinction.
Energy Outlook 2030 4 BP 2011
You will see, for example, that our outlook expects global CO2 emissions to continue rising, along with import dependence in many key consuming regions. This does not mean BP downplays the importance of climate change or the role of energy security in international relations. Rather, it reflects a to the best of our knowledge assessment of the worlds likely path from todays vantage point. To me personally, it is a wake-up call, not something any of us would like to see happening. We also highlight potential alternative outcomes, assessing in particular a case based on more aggressive policies to address climate change, as well as sensitivities for different economic growth paths. This is done to highlight the economic mechanisms that govern global energy markets, and how these can translate alternative policies into alternative outcomes. The discipline of building a numerical projection sharpens our thinking, but the precise numbers are less important than the underlying story of the challenges we all face and the choices we make in producing and consuming energy. In this way the outlook highlights the central role markets and well designed policy can play to meet the dual challenge of solving the energy needs of billions of people who aspire to better lifestyles, and doing so in a way that is sustainable and secure. We hope you find the BP Energy Outlook 2030 a useful addition to the global energy debate. Bob Dudley Group Chief Executive
Energy Outlook 2030 5 BP 2011
BP 2011
Primary energy
Billion toe
12 10 8 6 4 2 0 1970 1990
8 Forecast
GDP
Trillion, $2009 PPP
Forecast
OECD Non-OECD
OECD Non-OECD
100 80 60 40 20 0
OECD Non-OECD
2010
2030
1970
1990
2010
2030
BP 2011
BP 2011
* Includes biofuels
Energy Outlook 2030
increasing quantities of energy consumption. increasing efficiency of energy use, in production and consumption. increasing diversification of sources of energy. increasing demand for clean and convenient energy at the point of use.
The first great wave of industrialisation was based almost entirely on a truly disruptive technology, the steam engine, and on coal. Coal remained the dominant fuel until after WWII. The next major transition came with electricity and the internal combustion engine, which enabled diversification away from coal. Oil replaced coal use in transport. And while coal remains the principal fuel in power generation, it is gradually being replaced first by natural gas, and now by renewables.
11
BP 2011
0.4
China US
0.2
World India
0.0 1820
1840
1860
1880
1900
1920
12
1940
1960
1980
2000
2020
BP 2011
Increases: As countries industrialise and the share of energy intensive industry in GDP rises relative to other sectors. Peaks: Usually coincides with a peak in the share of the industrial sector in GDP. Also the nature of industry changes (from heavy and energy intensive to lighter and high value added) and industry becomes more energy efficient. Converges across countries: Driven by energy trade, the use of common technologies, and similarities in consumption patterns.
As one would expect, regional peak levels decline over time (as energy efficiency improves) and are higher in countries with abundant energy resources. Global competition and open markets drive convergence.
13
BP 2011
% p.a.
4% 3% 2% 1% 0% -1% -2% 1970-1990 1990-2010 2010-2030 GDP Population Energy Energy per capita Energy per GDP
14
BP 2011
18 16 14 12 10 8 6 4 2 0 1990
OECD Non-OECD
18 16 14 12 10 8 6 4 2 0
2000 2010 2020 2030
* Renewables
* Includes biofuels
BP 2011
as the fuel mix gradually shifts away from oil and coal
World primary energy consumption grew by 45% over the past 20 years, and is likely to grow by 39% over the next 20 years. Global energy consumption growth averages 1.7% p.a. from 2010 to 2030, with growth decelerating gently beyond 2020. Non-OECD energy consumption is 68% higher by 2030, averaging 2.6% p.a. growth from 2010, and accounts for 93% of global energy growth. OECD energy consumption in 2030 is just 6% higher than today, with growth averaging 0.3% p.a. to 2030. From 2020, OECD energy consumption per capita is on a declining trend (-0.2% p.a.). The fuel mix changes relatively slowly, due to long asset lifetimes, but gas and non-fossil fuels gain share at the expense of coal and oil. The fastest growing fuels are renewables (including biofuels) which are expected to grow at 8.2% p.a. 2010-30; among fossil fuels, gas grows the fastest (2.1% p.a.).
17 BP 2011
Contributions to growth
2.5% 2.0% Renewables* Hydro Nuclear Coal
Oil
Coal
Gas
10%
Gas Oil
Hydro Nuclear
1990 2010
0% 1970
Renewables*
2030
* Includes biofuels
BP 2011
18
Hydro Nuclear Renew. Electricity Gas Biofuels Oil Industry Other Coal
Inputs to power
20
Inputs to power
BP 2011
by fuel
Billion tonnes CO2 40
GDP
30
30
Coal
20
Non-OECD
300 250
20
Gas
10
Energy CO2
10
OECD
Oil
0 2030 1990
0 1990
2010
2010
22
2010
2030
BP 2011
25
BP 2011
Demand
Other S&C Am Mid East Other Asia China
Supply
2030 level
Other Iraq Oil Sands Biofuels Brazil FSU Saudi NGLs
OECD Declines
NonOECD Growth
26
2010
105 90 75 60 45 30
105 90 75 60 45 30 15
Non-OECD Ind & Other Non-OECD Transport OECD Ind & Other OECD Transport Power 1990 2010 2030
BP 2011
8 7 6 5 4 3 2010 2020
2030
BP 2011
8 4 0
2009 2030
OPEC NGLs OPEC crude Biofuels Oil Sands Other nonOPEC Non-OPEC conventional
BP 2011
OPEC production
50%
50 40 30 20 10 0 1990
Energy Outlook 2030
45%
40%
2010
2020
2030
BP 2011
37
BP 2011
10 8 6
4 projects
7 projects
4 2 0 Current
2020
2030
BP 2011
Biofuels supply
Mb/d
1.5
40%
30%
Europe
10%
0%
BP 2011
41
BP 2011
Growth 2010-30
1 5 8 9 17
Non-refined NGLs: 2
Liquids demand
43
BP 2011
45
BP 2011
Bcf/d
500
Bcf/d
500
2.1% p.a.
400 300
2.4% p.a.
300
200 100
0 1990
Energy Outlook 2030
2010
2030
Demand by sector
Bcf/d
500 Transport 400 Non-OECD Power Non-OECD Ind & Other OECD Power 100 OECD Ind & Other 1990 2010 2030
BP 2011
300
200
49
BP 2011
BRICs
Bcf/d
100 80 60 40 20 0 2030 1990 2010
50
Bcf/d
Other non-OECD
Transport Power Other Industry
100 80 60 40 20 0
2030
1990
2010
2030
BP 2011
and most rapidly in China, the Middle East, India and Brazil
Non-OECD gas use is driven by economic growth, accompanying industrialisation, industrial policy, the power sector and the development of domestic resources. Middle East gas consumption grows 3.9% p.a. over 2010-2030. The power sector accounts for 44% of this growth as domestic gas and imports in some countries displace oil burning. Petrochemical industries are contributing to the projected 3.2% p.a. growth in industrial gas use. Brazil, Russia, India and China (BRICs) contribute 40% to the total nonOECD gas consumption increment. Gas use grows most rapidly in China (7.6% p.a.), India (4.7% p.a.) and Brazil (4.6% p.a.), facilitated by rising domestic production and imports. Industrial activity accounts for 50% and the power sector for 29% of the gas consumption growth. Elsewhere in the non-OECD, gas consumption expands most strongly in power (2.9% p.a.) and industry (2.0% p.a.). Residential, commercial and other sector growth is modest (0.6% p.a.), primarily due to expected efficiency gains in FSU countries outside Russia (-0.6% p.a.).
Energy Outlook 2030 51 BP 2011
North America
Share 100%
80% 60% 40% 20% 0%
OECD Europe
Share 100%
80% 60% 40% 20% 0%
OECD Asia
Oil
Coal
Gas
1990
52
2010
2030
1990
2010
2030
BP 2011
North America
Bcf/d
100 80 60 40 20 0
Europe
Bcf/d
China
Net imports:
100 80 60 40 20 0
1990 2010 2030
54
Pipeline LNG
Domestic 4 Column production:
Syngas from coal Shale gas and CBM Conventional (inc tight gas) 1990 2010 2030
BP 2011
Bcf/d
70
60 50 40 30 20 10 0 1990
2000
2010
2020
2030
BP 2011
20
2.9% p.a.
Nuclear Coal
2 0
1990
10
BP 2011
OECD
Mtoe 3500
3000 2500 2000 1500 1000 500 0
Non-OECD Asia
Other
Mtoe 3500
3000 2500
RoW
Oil
Industry
2000 1500
Power
1000 500 0
1990
60
2010
2030
1990
2010
2030
BP 2011
63
BP 2011
15
Low GDP Case
10
-10% -15%
-20%
High Case
Low Case
BP 2011
64
65
BP 2011
Base Case
Iraq
35 30 25 20 2000
Policy Case
Energy efficiency
2010
2020
2030
* a back-cast which illustrates what is required to stabilise greenhouse gas concentrations at 450 ppm from IEA, World Energy Outlook 2010 Energy Outlook 2030 66 BP 2011
Mtoe 200
3. Chinas pathway
Industrialisation
Industry share - % of GDP
50 45 40 35 30 25 20 15 10
US 1820-2009
Japan 1870-2009
US 1879-2009
China 1913-2030
BP 2011
OECD Europe
Oil & Gas Consumption
US
China
100%
75%
250 0
1990
2030 1990
0% 2030
Oil
BP 2011
73
BP 2011
Key themes
75
BP 2011
77
BP 2011
78
BP 2011
Data sources
BP p.l.c., BP Statistical Review of World Energy, London, United Kingdom, June 2010 Cedigaz, Paris, France Energy Information Administration, Washington, D.C., United States Etemad, B., J. Luciani, P. Bairoch, and J.-C. Toutain, World Energy Production 1800-1985, Librarie DROZ, Switzerland, 1991 International Energy Agency, CO2 Emissions from Fuel Combustion, Paris, France, 2010 International Energy Agency, Energy Balances of Non-OECD Countries, Paris, France, various editions up to 2010 International Energy Agency, Energy Balances of OECD Countries, Paris, France, various editions up to 2010 International Energy Agency, World Energy Outlook 2010, Paris, France, 2010 Maddison, A., Statistics on World Population, GDP and Per Capita GDP, 1-2008 AD, 2009 Mitchell, B.R., International Historical Statistics, Palgrave Macmillan, New York, United States, various editions up to 2007 Oxford Economics Ltd, Oxford, UK United Nations Population Division, UN World Population Prospects: 2008 Revision, New York, United States, 2009 United Nations Statistics Division, National Accounts Statistics, New York, United States, 2011 Waterborne Energy, Inc., Houston, Texas World Bank, 2005 International Comparison Program, Washington, D.C., United States, 2008 Plus various national sources Historical data compilation: Energy Academy, Heriot-Watt University, Edinburgh, United Kingdom 80 BP 2011