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BP Energy Outlook 2016 PDF
BP Energy Outlook 2016 PDF
BP p.l.c. 2016
Contents
Page
Base case
Primary energy
19
Key issues
What drives energy demand?
44
48
52
58
Main changes
63
BP p.l.c. 2016
Contents (continued)
Page
Key uncertainties
71
74
78
82
Conclusions
86
Annex
Key figures and fast facts
90
92
94
Data sources
96
BP p.l.c. 2016
BP p.l.c. 2016
Second, the fuel mix continues to shift. Fossil fuels remain the dominant source of energy
powering the world economy, supplying 60% of the energy increase out to 2035. Within
that, gas looks set to become the fastest growing fossil fuel, spurred on by ample supplies
and supportive environmental policies. In contrast, the growth of global coal consumption
is likely to slow sharply as the Chinese economy rebalances. Renewables are set to grow
rapidly, as their costs continue to fall and the pledges made in Paris support their
widespread adoption.
Third, the outlook for carbon emissions is changing significantly. In particular, the rate of
growth of carbon emissions is projected to more than halve over the Outlook period
relative to the past twenty years. That reflects both faster gains in energy efficiency and the
shift towards lower-carbon fuels. Despite this, carbon emissions are likely to continue to
increase, indicating the need for further policy action. In BP, we believe carbon pricing has
an important part to play as it provides incentives for everyone to play their part.
2016 looks set to be another tough year for our industry. But we have faced similar
episodes in the past and we know that the market will eventually rebalance. We need to
respond to the near-term challenges, but we mustnt lose sight of the longer-term role of
our industry in providing the energy the world needs to grow and prosper, and doing so in
a safe and sustainable manner. We hope that this edition of the BP Energy Outlook can
make a useful contribution to informing discussions about future energy needs and trends.
Bob Dudley
Group chief executive
2016 Energy Outlook
BP p.l.c. 2016
Executive summary
The Energy Outlook considers a base case, outlining the 'most likely'
path for energy demand by fuel based on assumptions and judgements
about future changes in policy, technology and the economy, and
develops a number of alternative cases to explore key uncertainties.
In the base case, world GDP more than doubles, but unprecedented
gains in energy efficiency mean that the energy required to fuel the
higher level of activity grows by only around a third over the Outlook.
Fossil fuels remain the dominant form of energy powering the global
expansion: providing around 60% of the additional energy and
accounting for almost 80% of total energy supplies in 2035.
Gas is the fastest growing fossil fuel supported by strong supply growth,
particularly of US shale gas and liquefied natural gas (LNG), and by
environmental policies.
The oil market gradually rebalances, with the current low level of prices
boosting demand and dampening supply.
2016 Energy Outlook
BP p.l.c. 2016
BP p.l.c. 2016
Base case
Primary energy
BP p.l.c. 2016
GDP
Billion
Trillion, $2010
240
Contribution to GDP
growth 2014-35
Trillion, $2010
0
10
20
30
Other
Other
India
India
120
Africa
Africa
China
0
1965
180
OECD
OECD
2000
China
60
2035
0
1965
2000
10
2035
Population
Productivity
BP p.l.c. 2016
Over the same period, GDP is expected to more than double; around
one-fifth of that increase comes from population growth and four-fifths
from improvements in productivity (i.e. GDP per person).
China and India together account for almost half of the increase in global
GDP, with OECD economies accounting for around a quarter.
Africa accounts for almost half of the increase in the worlds population,
such that by 2035 it is projected to have 30% more people than China and
20% more than India. Yet Africa accounts for less than 10% of the
increase in both global GDP and energy consumption over the Outlook.
11
BP p.l.c. 2016
Thousands
Billion toe
18
12%
OECD
15
10%
China
Other
Other
Other
Asia
12
Other Asia
8%
Other
6%
World
6
3
0
1965
4%
China
2%
Industry
0%
OECD
Transport
2000
-2%
2035
12
1975
1995
2015
2035
BP p.l.c. 2016
The growth of energy is slower than in the recent past 1.4% per annum
(p.a.) versus 2.3% p.a. in 2000-14 reflecting significantly faster falls in
energy intensity (energy used per unit of GDP).
Chinas energy demand growth slows as its economy rebalances,
towards a more sustainable rate. By the final decade of the Outlook,
China contributes less than 30% of global energy growth, compared with
nearly 60% over the past decade.
The sharp slowing in Chinas energy demand growth is partially offset by
a pickup in other developing countries. India accounts for more than a
quarter of the growth in global energy demand in the final decade of the
Outlook, double its contribution over the past decade.
2016 Energy Outlook
13
BP p.l.c. 2016
50%
Renew.*
Oil
40%
Coal
30%
20%
10%
Hydro
150
Nuclear
Coal
Gas
100
Gas
50
Hydro
0%
1965
200
Nuclear
*Includes biofuels
2000
Renewables*
Oil
0
1994-2014
2035
14
2014-35
BP p.l.c. 2016
15
BP p.l.c. 2016
50%
Oil
75%
40%
Coal
50%
Gas
30%
25%
Nuclear
Renew.
Hydro
20%
1965
2016 Energy Outlook
2000
2035
16
0%
1965
2000
2035
BP p.l.c. 2016
17
BP p.l.c. 2016
18
Base case
Fuel by fuel detail
19
BP p.l.c. 2016
Supply
Mb/d
115
110
2035 level
Other
105
100
95
Mid East
Other Asia
Other
Brazil
India
US
China
90
85
80
2014
OECD Non-OECD
decline
growth
2014
20
Non-OPEC
growth
OPEC
growth
BP p.l.c. 2016
21
BP p.l.c. 2016
Mb/d
Billion toe
70
Transport
60
Industry
50
Other
Power
40
Electricity
Coal
Gas
Biofuels
Oil
(nonOECD)
30
20
Oil
(OECD)
10
0
1965
2016 Energy Outlook
2000
2035
22
0
1965
2000
2035
BP p.l.c. 2016
The other major source of demand growth for liquid fuels is industrial
use, especially in petrochemicals, which is the fastest growing source of
demand.
Growth in industrial use of oil is aided by the relatively limited scope for
efficiency gains and fuel switching. Moreover, over 40% of oil used in
industry is not combusted and so is less affected by climate policies.
2016 Energy Outlook
23
BP p.l.c. 2016
Vehicle ownership
Billion vehicles
900
20
Non-OECD
OECD
600
US
US light vehicles
EU
China
15
Japan
10
1
300
Germany
China
India
0
1975
1995
2015
2035
0
1975
1995
24
2015
0
2035 1975
1995
2015
2035
BP p.l.c. 2016
25
BP p.l.c. 2016
75
Other
non-OPEC
80%
50
Non-OPEC
conventional
crude
60%
25
40%
20%
-25
120
100
OPEC share
(right axis)
80
60
40
OPEC*
20
0
1990
2005
Mb/d
2020
0%
2035
-50
1990
Middle East
Europe
S&C America
N America
2005
FSU
Asia Pacific
Africa
2020
2035
26
BP p.l.c. 2016
27
BP p.l.c. 2016
2020
10
15
Other liquids
2020
US
Middle East
2025
2025
Other
Biofuels
2030
Crude and
condensate
NGLs
2030
2035
2035
28
BP p.l.c. 2016
29
BP p.l.c. 2016
Bcf/d
Bcf/d, 2014-35
500
120
Transport
Other
375
Industry
90
Power
250
60
125
30
0
1965
2016 Energy Outlook
2000
Non-OECD
2035
30
OECD
BP p.l.c. 2016
31
BP p.l.c. 2016
Bcf/d
Bcf/d
100
500
Non-OECD
shale
375
OECD shale
Total
75
50
250
125
0
1985
Non-OECD
other
25
OECD other
0
-25
2010
2035
32
BP p.l.c. 2016
Shale gas grows strongly (5.6% p.a.) throughout the Outlook, with the
share of shale gas in total production increasing from just over 10% in
2014 to nearly a quarter by 2035.
In the first half of the Outlook period, almost all of the growth in shale
output stems from the US. Further out, growth in Chinas shale gas
production increases, such that by 2035, China is the largest contributor
to growth in shale gas production.
33
BP p.l.c. 2016
40%
80%
60%
Total trade
30%
Europe
40%
20%
China
20%
Pipeline
0%
LNG
10%
-20%
0%
1990
2005
2020
-40%
1990
2035
34
US
2005
2020
2035
BP p.l.c. 2016
35
BP p.l.c. 2016
Billion toe
1.2
Other
0.8
Other
India
China
OECD
Total
India
0.4
2
China
0.0
1
0
1975
OECD
1995
2015
-0.4
2035
1975- 1985- 1995- 2005- 2015- 20251985 1995 2005 2015 2025 2035
36
BP p.l.c. 2016
37
BP p.l.c. 2016
Thousand TWh
5
4
3
Other
Brazil
North America
China
0
1965
0
1965
Other
North America
Europe
2000
OECD Pacific
2035
38
Europe
China
2000
2035
BP p.l.c. 2016
39
BP p.l.c. 2016
$2012/MWh
200
World
2012
China
150
EU
30%
Onshore wind
Utility-scale solar PV
US
2020
100
20%
2035
2012
2020
10%
50
0%
0
1995
2015
2035
40
2035
1
2
3
4
5
Capacity doublings from 2012
BP p.l.c. 2016
41
BP p.l.c. 2016
42
Base case
Key issues
What drives energy demand?
The changing outlook for carbon emissions
What have we learned about US shale?
43
BP p.l.c. 2016
Index (1965=100)
1200
0.7
1000
0.6
World
0.5
US
800
GDP
600
Primary
energy
0.4
400
200
0
1965
2016 Energy Outlook
China
EU
0.3
India
0.2
Africa
0.1
2000
2035
44
0.0
1965
2000
2035
BP p.l.c. 2016
OECD energy intensity declines at a faster rate than in the past 20 years,
and the growing importance of China means the continuing declines in
Chinas energy intensity have a bigger impact on the global trend.
The energy intensity of other major non-OECD economies, including
India and Africa, is projected to continue falling even as they go through
the industrialization phase of their economic development.
2016 Energy Outlook
45
BP p.l.c. 2016
-2%
-3%
1965-2014
1994-2014
Fastest
20-year
average
-4%
Thousands
0%
Billion toe
20
15
1965-2014
1994-2014
Base case
Flat demand
10
Base case
2014-35
Flat
demand
25
0
1965
46
2000
2035
BP p.l.c. 2016
47
BP p.l.c. 2016
Decline in
energy
intensity
4%
GDP
3%
Decline in
carbon
intensity
2%
1%
CO2
0%
Energy Outlook 2035
1994-2014
2014-35
48
BP p.l.c. 2016
49
BP p.l.c. 2016
Carbon emissions
% per annum
40
0%
1965-85
IEA 450
-1%
-3%
Base case
2014-35
Carbon
intensity
20
-2%
10
-2%
1994-2014
OECD
0
1965
-1%
0%
Non-OECD
30
Energy intensity
IEA 450
2013-40
2000
-3%
2035
50
BP p.l.c. 2016
For the given projected path of GDP, achieving anything close to the
IEAs 450 Scenario by 2035 would require an unprecedented pace of
improvement in both global energy intensity and carbon intensity.
A meaningful global price for carbon is likely to be the most efficient
mechanism through which to achieve these improvements.
51
BP p.l.c. 2016
Mb/d
Bcf/d
90
80
70
60
50
40
30
Forecast year:
2013
2014
2015
20
10
2016
0
2005
2015
2025
2035
52
2005
2015
2025
2035
BP p.l.c. 2016
53
BP p.l.c. 2016
Share
Tight oil
12
8%
6%
4%
2%
0%
2015
2025
10%
2005
Mb/d
12%
Share of liquids
production (right axis)
10
S & C America
Europe & Eurasia
Asia Pacific
North America
3
2
1
0
2035
2005-15
54
2015-25
2025-35
BP p.l.c. 2016
55
BP p.l.c. 2016
Share of total
production
(right axis)
80
40
30%
Shale gas
100
Bcf/d
Share
S&C
America
25%
Middle
East
30
20%
60
15%
40
10%
Europe &
Eurasia
20
Africa
Asia
Pacific
10
20
5%
0%
2005
2015
2025
North
America
0
2005-15 2015-25 2025-35
2035
56
BP p.l.c. 2016
57
BP p.l.c. 2016
% per annum
% per annum
10%
10%
No change in
economic structure
GDP
8%
8%
Primary energy
6%
6%
4%
4%
2%
2%
0%
0%
2000-14
2014-25
2025-35
Base case
Faster change
2000-14
58
2014-35
BP p.l.c. 2016
59
BP p.l.c. 2016
80%
Coal
1.2
0.8
40%
0.4
Non-fossils
Oil
0.0
0%
1985
2016 Energy Outlook
Gas
2010
-0.4
2005
2035
60
2015
2025
2035
BP p.l.c. 2016
61
BP p.l.c. 2016
62
Base case
Main changes
63
BP p.l.c. 2016
13.9%
200
100
0.6%
2.0%
2.1%
-100
-200
-2.8%
-0.8%
-300
Energy
-6.0%
Coal
Renew*
Gas
Oil
Hydro
Nuclear
BP p.l.c. 2016
65
BP p.l.c. 2016
Mtoe
1400
500
400
1200
300
1000
200
800
100
600
400
Forecast year:
2016
2015
200
2014
2013
2012
2011
-100
-200
-300
-400
2015
2020
2025
2030
Note: Projected growth from each Outlook applied to latest 2010 data
66
BP p.l.c. 2016
67
BP p.l.c. 2016
Billion toe
Mtoe
4.5
-300 -150
150
300
Europe -26%
4.0
Middle East
3.5
Forecast year:
2016
2011
3.0
Non-OECD Asia
North America
2.5
2010
2020
-13%
-9%
25%
2030
68
BP p.l.c. 2016
69
BP p.l.c. 2016
70
Key uncertainties
Slower global GDP growth
Faster transition to a lower-carbon world
Shale oil and gas have even greater potential
71
BP p.l.c. 2016
Key uncertainties
72
BP p.l.c. 2016
Key uncertainties
73
BP p.l.c. 2016
5%
GDP
Primary energy
Base case
4%
4%
3%
3%
2%
2%
GDP
Primary energy
1%
1%
0%
0%
China
World
China
1985
World
74
1995
2005
2015
BP p.l.c. 2016
75
BP p.l.c. 2016
Mtoe
-400
-300
-200
-100
-5%
China
-14%
Gas
-7%
-7%
-6%
Rest of World
-10%
Middle East
Coal
-8%
-10%
-7%
Nuclear
-5%
Hydro
-1%
Renew.
76
OECD
BP p.l.c. 2016
77
BP p.l.c. 2016
Faster transition
Carbon emissions
% per annum
40
0%
0%
30
-1%
20
10
0
1975
Carbon
intensity
Base case
IEA New Policies
Faster transition
IEA 450
1995
2015
Energy intensity
-1%
-2%
1994-2014
-3%
IEA NP
Base
case
Faster
transition
-2%
IEA 450
-3%
2035
78
BP p.l.c. 2016
Faster transition
79
BP p.l.c. 2016
Faster transition
Billion toe
250
Renew.*
200
Nuclear
150
Oil
Coal
100
3
2
Hydro
50
Coal
Gas
Gas
Oil
Total
-50
Hydro &
Nuclear
0
1965
2000
-100
19942014
Renewables*
2035
Faster
transition
CO2
2014-35
*Includes biofuels
2016 Energy Outlook
Base
80
BP p.l.c. 2016
Faster transition
Non-fossil fuels supply all of the increase in energy. Fossil fuels decline
slightly, with the share of fossil fuels in total energy falling from 86%
today to around 70% by 2035.
Natural gas and oil still increase in the 'faster transition' case, accounting
for a little over half of total energy supplies in 2035, although oil demand
is declining by the second half of the Outlook. Coal consumption suffers
the most, falling by more than 30% to its lowest level since 2002.
The big winner in the 'faster transition' case is renewables, with an
almost six-fold increase in output (nearly 9% p.a.) and a 15% share of
energy by 2035. The rate at which renewables gain share from 2020 to
2035 matches oils gain over the 15 years of 1908-23 years that included
the Texas oil boom, the discovery of oil in the Middle East, the British
Navy switching to oil, and the Model T Ford starting mass motorization.
81
BP p.l.c. 2016
Stronger shale
Case 3: Tight oil and shale gas having even greater potential
Differences in supply from base case
Mtoe
800
40%
Shale gas
Shale gas
Tight oil
Tight oil
600
30%
Stronger shale
Base case
400
20%
Stronger shale
200
10%
Base case
0%
0
2015
2016 Energy Outlook
2025
2015
2035
82
2025
2035
BP p.l.c. 2016
Stronger shale
The 'stronger shale' case assumes global shale resources are significantly
bigger than in the base case (in the US by 50% for oil and 30% for gas;
elsewhere by 100% and 50%), and productivity is 20% higher by 2035.
As a result, global supplies of tight oil and shale gas are much greater than
in the base case. The higher weight of shale gas within global gas supplies,
and the greater ability of gas to substitute for other fuels, means the
impact is more marked for shale gas than for tight oil.
Shale gas production is around 76 Bcf/d higher by 2035, with shale gas
accounting for more than a third of global gas supplies in the stronger
shale' case
Global tight oil output increases to 20 Mb/d by 2035, twice its level in the
base case, with its share of total liquids output reaching 18%.
83
BP p.l.c. 2016
Stronger shale
Consumption by fuel
Mtoe
Mtoe
1250
1000
750
400
OPEC crude
Shale and tight
Other
Total
Gas
Oil
Total
200
100
250
-100
-250
-200
-500
-300
Coal
300
500
Oil
Other
Gas
BP p.l.c. 2016
Stronger shale
In the oil market, tight oil is around 10 Mb/d higher by 2035 than in the
base case, whereas total oil production is only 6 Mb/d higher.
OPEC is assumed to respond to the stronger growth in tight oil by
increasing its own production in order to maintain its market share. As a
result, the decline in non-shale supplies relative to the base case (-4 Mb/d)
is concentrated within non-OPEC.
In the gas market, shale and tight gas (included in the positive supply
shock) are up by a combined 100 Bcf/d in 2035 versus the base case.
Conventional gas and coal-bed methane supplies are down by 45 Bcf/d in
aggregate, leaving total gas production 56 Bcf/d higher by 2035.
Fuel substitution is most pronounced in the power sector where gas
competes with all other fuels. The main casualty is coal, which is 260 Mtoe
lower by 2035 than in the base case; renewables are 110 Mtoe lower.
2016 Energy Outlook
85
BP p.l.c. 2016
Conclusions
86
BP p.l.c. 2016
Conclusions
Global demand for energy continues to rise
to power increased levels of activity as the world economy
continues to grow
87
BP p.l.c. 2016
88
Annex
Key figures and fast facts
Annual revisions in detail
Comparison with other energy outlooks
Data sources
89
BP p.l.c. 2016
Annex
Growth
2014-35
(cumulative)
2014
(share)
2035
(share)
Primary energy
Oil
Gas
Coal
Nuclear
Hydro
Renewables*
1.4%
0.9%
1.8%
0.5%
1.9%
1.8%
6.6%
34%
20%
44%
10%
50%
45%
285%
100%
32%
24%
30%
4%
7%
3%
100%
29%
26%
25%
5%
7%
9%
Population
GDP ($2010 PPP)
Energy Intensity
CO2 emissions
0.9%
3.5%
-2.1%
0.9%
21%
107%
-35%
20%
* Includes biofuels
90
BP p.l.c. 2016
Annex
91
BP p.l.c. 2016
Annex
Revised up
Energy demand
US
Other OECD
Liquids supply
China
Gas supply
India
Africa
Coal demand
Middle East
Other non-OECD
Non-fossil fuels
-400
-300
-200
-100
100
200
300
Mtoe
2016 Energy Outlook
92
BP p.l.c. 2016
Annex
Total primary energy has been revised down in 2035 by around 150 Mtoe
(or 1%) reflecting the judgement that energy intensity is likely to decline
faster than previously thought, helped by the agreements reached at
Paris COP21.
Oil supply has been revised up in the US (reflecting higher tight oil) and
Iran (due to improved investment prospects), partially offset by lower
output in Canada and Kazakhstan. The higher supply is largely matched
by higher transport demand, helped in part by current low prices.
Lower gas demand, combined with more US shale gas, has led to a
downward revision to non-OECD gas supply, particularly in Africa.
Coal demand has been revised down, due to a weaker profile for China
GDP growth and increased environmental polices.
Non-fossil fuels have been revised up in most regions, driven by faster
technological progress in solar and more supportive environmental
policy.
2016 Energy Outlook
93
BP p.l.c. 2016
Annex
Billion toe
Non-OECD
OECD
-1
-1
BP
IEA
MIT
Other
Coal
Liquids
IEEJ
BP
94
IEA
Nuclear
Gas
MIT
IEEJ
BP p.l.c. 2016
Annex
Beyond that, there are some significant differences among the outlooks,
at both the regional and fuel level, which reflect differences on key
assumptions, such as: the availability and cost of oil and gas supplies; the
speed of deployment of new technologies; the pace of structural change
in China; the impact of energy and environmental policies.
Technical note: in order to facilitate the comparison, all the outlooks have been rebased to a
common set of data for 2010, taken from the BP Statistical Review of World Energy.
IEA: 'World Energy Outlook 2015', New Policies Scenario.
MIT: 'Energy & Climate Outlook, perspectives from 2015'
IEEJ: 'Asia/World Energy Outlook 2015', Reference Case
2016 Energy Outlook
95
BP p.l.c. 2016
Annex
Data sources
BP p.l.c., BP Statistical Review of World Energy, London, United Kingdom, June 2015
BP p.l.c., BP Technology Outlook, London, United Kingdom, November 2015
Energy Information Administration, Annual Energy Outlook, Washington, D.C., United States, April 2015
European Environment Agency, Monitoring CO2 emissions from new passenger cars and vans in 2014, Copenhagen,
Denmark, November 2015
IHS Automotive, Winfor International Database - World Car and Truck Data 1970-2024, Englewood, CO , United States,
December 2015
Institute of Energy Economics Japan, Asia/World Energy Outlook 2015, Tokyo, Japan, October 2015
International Council for Clean Transportation, Global passenger vehicle standards, Washington D.C., United States,
August 2015
International Energy Agency, CO2 Emissions from Fuel Combustion 2015, Paris, France, 2015
International Energy Agency, Energy Balances of Non-OECD Countries, Paris, France, 2015
International Energy Agency, Energy Balances of OECD Countries, Paris, France, 2015
International Energy Agency, World Energy Outlook 2015, Paris, France, 2015
MIT Joint Program on the Science and Policy of Global Change, Energy & Climate Outlook, perspectives from 2015,
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