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BP Technology Outlook

Technology choices for a secure, affordable


and sustainable energy future

November 2015
1

About this
4.0 Conclusions and Contents
implications
page 37 1.0 Global context Introduction 2
Evolution of energy and the role of Key insights 3

publication
page 4
different technologies in the short, An overview of the energy landscape.
1.0 Global context 4
medium and long terms.

3.1 Emerging Technologies to meet


technologies energy demand 7
page 33 4.0
2.0 Energy resources 8
Overview of technologies
that are not widely used today, 2.1 Conversion and end use 15
but with the potential to transform 1.0
the energy landscape. Key influences on
energy technology 24
This publication sets out how technological developments could shape and
3.0 Natural resource constraints 25 influence the way we identify sources of energy and extract, convert, store
3.1 Emerging technologies 33 and ultimately consume them over the next 35 years.
Using insights from BPs data and analysis, it maps out a path that can deliver
3.1 4.0 Conclusions and implications 37 energy supplies that are secure, affordable and environmentally sustainable.
While we provide an overview of technologies across the energy system, we
70
Our approach 39
present more detail on oil-and gas-related energy technologies. We look at each
Key influences Glossary 40
major region in the world, focusing on North America as a specific example.
on energy Technologies More information 41
When analyzing costs, we use data from the period when oil prices were around
technology to meet energy 40 $100 per barrel, and show how technology could reduce costs relative to this
demand 2.0
benchmark. Clearly, other deflationary forces are at play in the lower-oil-price
environment and these can and should be differentiated from the technology
signal in this publication.
105

The analysis is, of course, based on what we know today. In that sense it can only
ever be a snapshot of new and emerging technologies some, such as carbon
3.0 145

External perspectives
capture and storage, are still in their infancy; others, such as solar photovoltaic (PV),
are developing quickly. We must also acknowledge the impact that breakthroughs
2.0 Energy resources Within this publication there are six in other sectors, such as data analytics, will have in helping us to meet global
page 8 opinion pieces authored by a range of energy demand in the most effective way. This trend of convergence between
2.1 Overview of technologies industry experts, including IHS Energy,
sectors is already making an impact.
that will enable improvements Bloomberg New Energy Finance, Ford
3.0 Natural resource in recovery of fossil and Motor Company, Princeton University, Naturally, the future is uncertain. This analysis looks at todays trends and the
non-fossil resources. Tsinghua University and Masdar Institute implications those trends may have for future governments, businesses and
constraints
page 25 of Science and Technology. wider society.
Impact of constraints related to The opinion pieces can be found on
water, minerals, land and climate pages 14, 19, 23, 28, 32 and 36.
on technology choices. 2.1 Conversion and end use
page 15
Comparative overview of electricity generation,
fuels production and vehicle technologies.
BP Technology Outlook Introduction 2

Introduction

We live in a world of rapid change where developments in For many years at BP we have regularly the industry to develop new technologies renewables and developments in areas
assessed energy technology developments, to reduce costs; however, the situation such as battery storage and smart energy
technology can transform societies, economies and industries. looking back to learn lessons and looking reminds us that energy is influenced by systems will widen options in an already
In the corporate world, history tells us that companies that do forward to anticipate the trends that will the interplay of many different factors. competitive market.
not anticipate or adapt to new technologies struggle to survive. shape our industry and others.
Technologies such as enhanced oil recovery, Societys challenge is how to balance
On the other hand, companies with leading technologies are BP Technology Outlook marks the first advanced seismic imaging, and digitization mitigating climate change while at
often the most competitive and successful. time we have shared the outcomes of our will have a huge impact on which of the the same time providing the energy
analysis with the wider world. It sets out available fossil resources we develop, how, security and affordability that drives
how technology could shape our energy where and when. Innovation will not only socio-economic development. The energy
landscape over the next 30 to 40 years. help to sustain the supply of hydrocarbons, industry can assist in the transition to
it will enable renewable resources most a more sustainable economy if policy
The analysis shows that the world is not
notably solar and wind to be more frameworks are developed to promote
running out of resources for its energy
competitive, changing the merit order of investment in lower-carbon technology.
needs. Fossil fuels of oil, gas and coal,
investment and resource development.
along with uranium, are plentiful while the Our aim for this publication, similar to
alternatives of renewable energies do not In terms of energys end use for transport, BP Energy Outlook 2035, and BP Statistical
deplete by definition. With existing and liquid fuels, including biofuels, are likely Review of World Energy 2015, is to make
incremental technology advances, we to continue as the major source of a valuable contribution to the debate about
have abundant and technically accessible transport fuel for at least the next 30 how best to shape a secure, affordable and
resources to meet foreseeable global years. They will be used more efficiently sustainable energy future. I hope you find it
primary energy demand out to 2050 as vehicles and engines become lighter and interesting and useful.
and beyond. The extent to which each smarter. In power generation, as well as
fuel is used depends on many factors. increasing contributions from renewables,
These include technology and policy new opportunities such as a global shift Bob Dudley
but also capital. At the time of writing, towards natural gas, improved energy Group Chief Executive
an abundance of supply and a fall-off in efficiency and, ultimately, carbon capture November 2015
demand growth have driven energy prices and storage technology will help us to
down and constrained the funds available move towards a lower-carbon future.
for investment. Such price falls compel Meanwhile, further falls in the costs of
BP Technology Outlook Key insights 3

Key insights
What the analysis shows

Some emerging technologies


could prove disruptive
Energy resources Transport is set to The nature of certain technologies, in areas such as digital systems, bioscience
and nanoscience, makes them potentially disruptive to markets, trends and
are plentiful become more efficient business models.
Energy resources are more than sufficient to
meet future, long-term demand.
The power sector offers greatest Continued improvement in the efficiency of
internal combustion engines (ICE) and vehicles
Developments in advanced materials could lead to extraordinary improvements in
the performance of batteries, solar conversion and the use of hydrogen as a fuel;
Technology has great potential to increase the
scope for reducing emissions will reduce emissions. however, these technologies could take decades to be applied globally, because
of the capital required.
supply of both fossil and non-fossil fuels, while Using technology to improve energy efficiency is often economic. The cost of supplying biofuels will fall,
reducing their costs. Beyond this, there is an immediate cost to reducing emissions, and particularly second-generation biofuels made Digital technology has particular potential to drive far-reaching change because it
this is generally lower in power generation than in transportation. from grasses, wastes and other non-edible offers multiple opportunities to make energy supply and consumption safer, more
The questions for policymakers are about reliable, more efficient and more cost effective.
agricultural matter.
choosing which resources to prioritize in meeting
In many regions, a modest carbon price can make new-build natural
demand, while limiting emissions and providing Despite their high energy efficiency, electric
gas more competitive than existing coal, and gas is cleaner.
energy security. vehicles or fuel-cell vehicles still need significant
At higher carbon prices, wind and solar become more competitive, technological advances to compete with ICE
providing there is backup power capacity. Capturing the carbon from vehicles on cost.
burning gas for power can also become economically viable.
BP Technology Outlook 1.0 Global context 4

1.0 Global context


Since 1800 the
global population
In the future, has grown from
one billion to Improvements in living standards in
transformational the twentieth century have doubled
change could seven billion.
average life expectancy to 60 years,
come from one
or more of a
a transformation largely fuelled by The twenty-first century energy journey
coal, oil and gas.
number of different

x2
technologies
working in unison.

EM
2050 E
In the past
30 years energy
consumption

RG
has doubled.

IN
G
EC
1800

ON
IN

Y
NC

OM
Which technologies will be most The journey so far On the supply side, technology has helped

DU
TA
Since 1800 much of the world has the energy industry discover more oil and

ST

IES
LIFE EXPEC significant in the world of energy
OLOGIES

RIA
industrialized, and the average life gas than society has consumed. Proved oil
in the coming decades? In this expectancy has doubled from 30 to 60 reserves, for example, now stand at more

LIZATION
1900 publication, we review the range years. It took all of human history for the than twice the level they were at in 1980.
of technologies used to find, worlds population to reach one billion in Key technologies driving this phenomenon
ECHN

1820; today it is seven billion and is forecast include advances in seismic imaging that
SED

produce, process and consume


to be eight billion in less than a decade. enable geologists to pinpoint subsurface
energy and how they might
ET

EA

This transformation has been largely fuelled reservoirs more accurately, and new
CR
UR

develop. We examine the journey by coal, oil and gas providing heat, power techniques to improve oil recovery that
N
T

that energy is likely to take and mobility, which in turn has helped drive prolong production from reservoirs.
I
FU

economic growth, create jobs and raise


RI

2000 and the technologies with the Meanwhile, other technologies such as
SE

N living standards.
LI potential to be significant at each horizontal drilling and hydraulic fracturing
I

VI The past decade and a half has seen a have opened up significant shale oil and
NG stage.
STA surge in these trends, driven by demand gas formations. Resources are now
NDAR
2020 DS from emerging economies, led by China and plentiful and the concern about oil and
India. Consumption of energy has almost gas running out has all but disappeared.
doubled. Although energy has played a The resources are unevenly spread,
ES There are now major part in lifting millions out of poverty however, with four countries accounting
NC
Y ADVA more than twice in recent decades, many lack the access for more than 50% of proved oil reserves.
TECHNOLOG the global proved to energy taken for granted in advanced The same is true for gas1. With such
oil reserves that
economies. For example, more than a billion disparities between where energy is
there were in 1980.
people still live without electricity. located and where it is used, net consumer
countries often seek to increase their
The carbon dioxide
domestic production and limit imports to
created by consuming
fossil fuels will continue BP Statistical Review of World Energy 2015.
1 enable energy security.
to be a major issue. Four countries control more than 50% of the worlds
proved oil reserves (Venezuela, Saudi Arabia, Canada
The 201415 drop in and Iran). Four countries control more than 50%
the oil price will drive Technologies, such as horizontal of the worlds gas reserves (Russian Federation, Iran,
further efficiency in drilling and hydraulic fracturing, Qatar and Turkmenistan).
oil production. have opened up significant shale
oil and gas formations.
BP Technology Outlook 1.0 Global context 5

Yanan Road and Peoples


Square, Shanghai, China.

Harvesting sugar cane


for biofuels in Brazil.
demand Demand is likely to grow but, with resources
resource being so plentiful, industry will need to adapt
and be resilient to lower prices.

Global primary energy consumption by region At the time of writing, the abundance of The journey ahead storage (CCS), a process whereby CO2 is
new supplies, coupled with a slow down BP Energy Outlook 2035 sets out how we collected from industrial exhaust streams
20
Other non-OECD in demand growth for energy in developed believe the journey will continue, based and injected into underground storage sites,
18
economies, has led to a dramatic drop in on a series of projections on current and is only now starting to be demonstrated
Billion tonnes of oil equivalent (toe)

16 Non-OECD Asia
oil prices. Demand is likely to grow but, expected trends in supply, demand, policy at scale.
14 with resources being so plentiful, industry and technology. Energy consumption
OECD Governments around the world have given
12 will need to adapt and be resilient to could grow by around 37% in the next two
some support to lower-carbon energy
10 lower prices. decades. Almost all this growth in energy
through many measures. These include
8 use an estimated 96% of it comes from
The past two decades have also highlighted emissions limits for vehicles and industrial
6 non-OECD3 economies, led by China and
the environmental challenges of using fossil plants, quotas that mandate certain
India. That level of growth in energy use
4 fuels. Greenhouse gas (GHG) emissions proportions of renewable energy in power
could result in CO2 emissions increasing
2 have risen in the past two centuries and or transport, and subsidies such as tax
Source: BP Energy Outlook 2035.
by 25% by 2035.
0 have been increasing by more than 2% credits and feed-in tariffs to help lower-
per year in the twenty-first century1. Policymakers face multiple challenges in carbon energy compete with fossil fuels.
1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035
Carbon dioxide (CO 2) from fossil-fuel use seeking to set frameworks for energy.
accounts for around two-thirds of the total2.
On the one hand, there is a continuing
Consumption by final sector The Intergovernmental Panel on Climate
and pressing need to improve access to
20 Change (IPCC) states: Without additional
Transport affordable energy for the billions who need
mitigation efforts beyond those in place
18 it in places such as Africa and Asia.
Billion tonnes of oil equivalent (toe)

today, and even with adaptation, warming


16 Power
by the end of the twenty-first century On the other hand, there is the
14
Other will lead to high to very high risk of environmental imperative of driving a
12 transition to a lower-carbon economy.
severe, widespread and irreversible 1
IPCC Fifth Assessment Report Summary for
10 Industry impacts globally. Policymakers.
This situation is further complicated by 2
IPCC Fifth Assessment Report WG 3.
8
the fact that, today, lower- or zero-carbon 3
Organization for Economic Cooperation and
6 Development (OECD) is a unique forum where
energy, such as solar, wind, wave, nuclear the governments of 34 democracies with market
4 and sustainable biofuels, are generally economies work with each other, as well as with
more than 70 non-member economies, to promote
2 more expensive and/or less reliable than economic growth, prosperity and sustainable
Source: BP Energy Outlook 2035. development.
0 fossil fuels. In addition, carbon capture and
1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035
BP Technology Outlook 1.0 Global context 6

However, renewables (excluding large-scale The role of technology Three priorities, therefore, recur throughout
hydro electricity and the use of biomass Technology underpins all these energy this publication:
in small-scale heating and cooking) still sources and therefore has an important
Energy security and growing
only make up around 3% of world primary role to play in the energy future.
demand given increasing demand
energy. While they are the fastest growing
In Chapter 2, we examine current and and concerns around energy security,
type of energy, they are only expected
future energy technology options, covering technologies for efficiently capturing
to reach around 8% by 2035. Responses
production, conversion and consumption. and utilizing primary energy resources
to the accident at the Fukushima nuclear
We also look at the scale and nature of will remain important.
power plant in Japan in 2011 have slowed
natural energy resources.
down the growth of nuclear power, which Affordability pressure on the industry
currently only accounts for around 4% of In Chapter 3, we consider the forces that to keep delivering energy competitively
global primary energy consumption. may influence the directions taken by means that technologies enabling
energy technology in the future. Firstly, energy to be produced and consumed
Many governments, businesses, including
we cover constraints relating to natural at a lower cost are in demand.
BP, and experts believe a decisive shift to
resources, including potential areas of
Technology has an lower-carbon energy can best be driven by Lower-carbon energy the risk
important role to play in scarcity, such as water and minerals,
putting an effective price on carbon, raising of climate change means that
the production of energy and the impact of carbon in the atmosphere
the costs of consuming higher-carbon- technologies limiting and, in time,
for domestic, commercial as a driver of climate change. Secondly, we
and industrial use across content energy, and tilting the economic reducing GHG emissions by increasing
review emerging technologies that are not
the globe, as well as in balance in favour of lower-carbon options. the efficiency of fossil-energy
widely used today and assess the potential
all modes of transport. consumption, or enabling switching
influence these may have in the future.
Miami, Florida, US. to a lower-carbon energy, will be a
In Chapter 4, we draw some conclusions major feature of the journey ahead.
from the way energy has evolved to date
These objectives are not ranked in order.
and the role different technologies might
It is for governments, regions and ultimately
play in delivering more energy to more
consumers to decide which needs are most
people at lower cost in the future. We also
pressing and how the balance between
assess how the growth in demand can be
these imperatives can be best achieved.
met while meeting GHG-emission-reduction
targets and moving to a lower-carbon
energy system.
BP Technology Outlook 77

Technologies to meet
energy demand
As energy demand grows in the coming decades, securing access to resources will
continue to be essential. Through technology, we will be increasingly able to recover
more from known resources and make those that currently face technical and cost
challenges more affordable.

Technology can provide


many possible routes
through an uncertain
energy future and
can help to meet the
projected growth in
global energy demand.
Dubai in the mist,
United Arab Emirates.
BP Technology Outlook 2.0 Energy resources 8

Energy resources are plentiful


Technology advances are helping to produce resources to meet
the worlds projected future energy demand many times over.
2.0 Energy resources
Unconstrained primary energy resource
availability 20501 Eurasia
70 billion toe/yr*
Hydroelectricity Oil
Ocean Gas
Geothermal
Coal

North As energy demand grows in the The International Energy Agency (IEA) thermal energy, while showing promise, are
America coming decades, securing access forecasts that by 2050 the worlds annual still in their infancy. Here too, technology
demand for energy will have risen from will play a vital role in their progress.
60 billion toe/yr
toe/yr* to new resources will continue todays level of nearly 13 billion tonnes of
In the meantime, as these lower-carbon
Global technically Nuclear to be essential. Technology will oil equivalent (toe) to between around 16 to
Offshore (uranium) technologies develop largely by becoming
wind recoverable increasingly enable us to recover 22 billion toe2. How close the outcome is
cheaper and more efficient the challenge
to the lower level depends on progress in
more from known resources and
energy in 2050 40 using energy more efficiently and therefore
is to identify, access and convert fossil-fuel

455
19,020
Onshore make those that currently face using less of it in total. Although demand
resources more efficiently as we transition
wind to a lower-carbon future.
technical and cost challenges is strong, our analysis shows that there are
more affordable. plentiful energy resources available to meet We present an overview of lower-carbon

EJ/yr
Biomass it, both conventional fossil-fuel energy and resources later, but start by considering
Middle East renewable and alternative forms. the future impact of technology on oil and
billion toe/yr* 40 billion toe/yr*
Indeed, several resources including wind
gas resources.
*tonnes of oil equivalent Oil
and solar could meet that demand on their
per year Gas
own if they were backed up by conventional
Coal Technology will help unlock future oil
Nuclear (uranium) sources of energy to counteract the
and gas resources and reduce costs
Solar challenges posed by intermittency, or
105 Biomass
of extraction
supported by wide-scale energy storage.
Onshore wind At issue though, is the practicality of We calculate that around 45 trillion boe
Offshore wind
providing energy to consumers when and of oil and gas were originally in place
Geothermal
Ocean (e.g. wave, tidal, thermal) where it is needed, at a price that is of which only 2 trillion boe have been
Hydroelectricity affordable and at a scale that is acceptable. produced to date. Ongoing development
Solar
It will be for communities and policymakers of these reservoirs can produce enough
1
This represents the energy resource potential per to meet anticipated global demand for the
to judge the practicality as well as the social
South and Asia Pacific year based on the availability of the underlying
source of energy, including locally sourced uranium and environmental acceptability of taking foreseeable future.
Central America 105 billion toe/yr* for nuclear, without reference to economic
viability. Fossil and uranium resources have been such steps. The availability of resources therefore is
annualized over a 50-year period for comparison with
35 billion toe/yr* renewables. We must also acknowledge that some less of a challenge than the impact of their
consumption on the sustainability of
Africa Energy Technology Perspectives 2014, IEA.
2 resource bases, such as wave and ocean

145 billion toe/yr*


Source: BP.
BP Technology Outlook 2.0 Energy resources 9

Plentiful volumes of oil and gas

Technically recoverable oil and gas resources from discovered


fields, using technology available today, are estimated at
4.8 trillion barrels of oil equivalent (boe).
Estimates of shale resources, not only in the US
but around the world, have more than doubled the
oil and gas originally in place globally from around
20 to 45 trillion boe.
Oil and gas original
80% of the world's in place volumes
technically recoverable 45 trillion boe
oil and gas is found in
the Former Soviet Union,
North America, South and
Central America and the 65% of today's the environment. While here we discuss
Middle East. technically our analysis of the potential scale of Enhanced oil recovery (EOR)
recoverable
recoverable resources, we do so mindful Once in production, typically only about 10% of the oil in a reservoir flows to
resources are from
conventional oil that governments, supported by many the surface under its own pressure. For decades a technique known as waterflooding
and gas. businesses and citizens, are increasingly has been used to push more of the remaining oil out of the reservoir. Using conventional
seeking to limit carbon emissions by using waterflooding the average recovery factor from the reservoir is around 35%, meaning
less energy and shifting towards lower- almost two-thirds of the total volume of oil contained in a conventional reservoir is
carbon fuels. This is likely to have an impact left behind. Clearly, the potential to recover more of the oil left in existing reservoirs
Unconventional1 on the proportion of these resources represents an enormous opportunity, perhaps even larger than that from anticipated
North America 16%
oil 12% produced, relative to other forms of energy. new discoveries.
Africa 5% Unconventional The effectiveness of waterflooding can be improved by modifying the water injected
gas 23%
A significant volume of fossil fuels will still
Asia-Pacific 11% into the reservoir, either by changing its ionic composition or by adding chemicals,
be used as part of the transition to a more
polymers and surfactants. Maximizing recovery can also be achieved by other gas-based
Europe 3% sustainable future energy mix including
EOR technologies, such as CO2 injection, miscible flooding and vaporization.
the use of natural gas as a substitute
Former for coal and it is therefore relevant to Extra-heavy oil and oil sands resources require a different set of techniques and
Soviet Union 16% technologies such as steam flooding, in situ combustion or solvent-assisted
understand the role of technology in finding,
producing and consuming fossil fuels. thermal flooding.
South and Central Conventional
America 15% oil 41% Longer term, breakthroughs in microbial and nano-particle technologies could raise
The most significant change to the oil and
Conventional
recovery factors even further.
gas resource base in the past decade has
Middle East 34% gas 24%
been the development of production from
shale and tight (or low-permeability) rocks, and produce new sources of hydrocarbons. stage hydraulic fracturing techniques that
2.0 trillion boe
particularly in the US. Estimates of shale Advances in seismic imaging, for example, have evolved over many years.
Cumulative production
to 2014 resources, not only in the US but around the have helped reveal previously undiscovered
The BP Statistical Review of World Energy
world, have more than doubled the oil and gas fields, particularly in deep water and
2015 records that there are 2.9 trillion
total estimated volumes of oil and gas below formations of salt in the subsurface.
4.8 trillion boe boe (as of 2014) of proved reserves.
1
Unconventional oil and gas includes
Technically recoverable in place globally with development potential.
shale oil, oil shale, tight oil, oil sands, The shale revolution has been made These are reserves that subsurface
shale gas, tight gas and coalbed resources New technology has been central to possible largely by developments in information indicates with reasonable
methane.
enabling the oil and gas industry to find directional and horizontal drilling and multi- certainty can be recovered from known
Source: BP, IHS Energy.
BP Technology Outlook 2.0 Energy resources 10

A geologist conducts
seismic interpretation on

35%
large screens displaying
detailed data in the Highly
Immersive Visualization
Environment in Jordan,
Middle East.
Technologies such as next-generation EOR, seismic
Aerial view from a Bristow imaging, and well construction and intervention
Super Puma helicopter
of a Petroleum Geo-Services could increase recoverable oil and gas resources by
Ramform Sterling seismic 2 trillion boe (~35%) by 2050.
vessel in the Ceduna
Basin, Australia.

and oil sands. Although no technological Technology advances will change the relative cost competitiveness of resource types
Seismic imaging breakthroughs are required to develop
unconventional resources, there are likely Technology improvements
Seismic imaging technologies underpin exploration deep into the Earths subsurface.
These technologies can be used for oil and gas (and other minerals) resource to be significant above-ground challenges. to 2050 will enable us to
2012
identification, access, exploration and recovery. The emergence of three-dimensional These will include government policy, recover more resources than

Cost per barrel of oil equivalent ($/boe)


seismic imaging during the 1990s had a dramatic impact on oil and gas exploration, in infrastructure, supply chains, public opinion we can today.
some instances raising exploration success rates from 30% to 50%. and consumer preferences.
Technology innovation will enable
2050
Since then, seismic acquisition technologies have advanced and can now illuminate the Between now and 2050 technological us to access resources more cost
subsurface from different orientations. Multi- and wide-azimuth surveys, for example, developments will also drive improvements effectively and they will have a
enable surveys to be carried out in different directions over the same area. 4D seismic, major impact on unconventional
in field recovery factors. This is particularly resources that today are high
which involves repeating the same survey at different times, plays an increasingly the case for unconventional gas and EOR cost and complex to recover.
important role in helping to determine how reservoirs are changing as oil, gas and water for conventional oil. These factors, when
move through the subsurface and are produced to the surface.
combined with the discovery of new oil
These advances have been enabled by rapid increases in cost-effective computational and gas resources from exploration, could
processing capacity and deep algorithmic expertise to process and interpret vast potentially add another 2.0 and 0.7 trillion
streams of seismic data. As interest in tight oil, shale oil and shale gas grows, advances boe respectively, over and above the
in imaging technologies that improve our understanding of subsurface factors and potential from current best available
identification of sweet spots will be of great value. Understanding reservoir structure, technologies.
rock and fluid properties is critical to cost-effective, large-scale developments and to
maximizing the recovery of unconventional hydrocarbons. Advanced EOR technology could increase
recoverable volumes of light oil by 30%.
Developments in imaging, well construction
Technically recoverable volume (boe)
reservoirs under existing economic and applying todays best available technologies and well intervention technologies will be
operating conditions. to conventional fields and including key to unlocking unconventional oil and gas.

y
av
unconventional resources. The latter

he
The technically recoverable oil and gas Technology advances will not only extend

er
y
require different production methods and

at

ra
er

av
resource base could be increased by

w
supply from existing oil and gas resource

t
at

he

ex
er

ep
w
extraction technologies and include oil and

s
at

e
re

re

re

l
nd
de

il
oi
w
around 1.9 trillion boe to 4.8 trillion boe by types, but can also open access

al
pw

to
ho

ho

ho
lo

sh
sa
e
a-
gas found in shale rock, tight formations

gh
al

al
ee
ns

ns

ns
ltr

il

il
Sh

Sh

Ti
O

O
D

U
Data excludes natural gas hydrates and deep coal.

Source: BP.
BP Technology Outlook 2.0 Energy resources 11

25%
Subsurface imaging, drilling and completions, facilities
and digital technologies could all contribute to reducing
todays cost of supplying oil and gas resources by as
much as 25% by 2050.

Increased recovery and reduced to resources in geographies previously


considered inaccessible, such as ultra-
cost in oil and gas (combined) deepwater or the Arctic. As well as the
question of whether these resources
Between now and 2050 technology innovation will both increase
are needed as part of a future mix, the
technically recoverable oil and gas volumes and reduce the cost
fundamental challenge the industry faces
of extraction. Totals refer to oil and gas combined.
in addressing these resources is to produce
12%
10% them safely and reliably. Developments
in remote sensing, automated operations
and data analytics are not only making
7% operations more efficient, but also
INCREASING VOLUMES

Increasing technically increasing operational reliability and


4% recoverable volumes enhancing safety, especially in higher-risk
2% Technology could increase
technically recoverable volumes
tasks and locations.
by nearly 2.0 trillion boe Advances in technology could reduce
(35% increase)
industry extraction costs1 by approximately
25% (in real terms) by 2050.
REDUCING COSTS

0% Reducing
Technology is likely to have the most
industry costs
-2% Technology could reduce
impact on resources that are difficult
industry costs by ~25% to produce or those that are sparsely
-5% -4% exploited today such as ultra-deepwater
and unconventionals. At a time of lower
prices, revenues and capital spending,
digital technologies including sensors,
y
er
ov
ec

-13%
lr
oi
ed

Undiscounted greenfield life-cycle costs were


1
Technology advances
Im s

g
e
nc

in
l

iti

assessed at 2012 levels and include exploration, access


ita

ls

continue to open
ag
ha

cil
el
ig

En

and production capital expenditure, and operating costs,


Fa
W
D

but exclude above-ground costs such as processing, up new deepwater


Source: BP. transportation, tax and royalties. frontiers.
BP Technology Outlook 2.0 Energy resources 12

Oil and gas resources are abundant

Advances across a range of technology applications


will improve recovery in existing resources and help
discover and unlock new resources.

Todays technologies will enable


us to more than meet demand
for oil and gas to 2050. Source of resource

Seismic
Well construction and
imaging
intervention, in tandem with
imaging technologies, are
vital for increasing recovery

Re
of unconventional resources. Technically
recoverable oil and gas

cov
in the conversion of coal, rather than its
Enhanced oil recovery is the 4.8 Digital technologies extraction, where the greatest opportunities
biggest contributor to increasing Projected oil and gas tr

era
Directional
recoverable oil volumes. demand to 2050 2.5 drilling
Digital technologies in addition to seismic imaging will make radical lie for technological advances, particularly
tri

ill
changes to how we find, extract and use energy, providing opportunities

ble w
with ultra-supercritical and integrated
ll

io
for more efficient operations through unparalleled levels of data analysis. gasification combined-cycle power plants

nb
io
In the oil and gas industry, sensor technologies in equipment such as pumps, wells and that can reduce the level of carbon

nb

arre

ith
appliances are increasingly being used. When connected to data collection mechanisms, emissions per unit of power produced.

oe
they provide real-time information on field activities. Intelligent wells providing updates Being able to access very deep or very

ls of oil equ

todays techno
2050
on well condition from top to bottom are now becoming a reality, a development that complex seams would require incremental,
reduces both non-productive time and cost. Together with the rapid development of rather than step, changes in technology.
data analytics and management techniques, the industry can find oil and gas resources Techniques such as underground coal
faster and more effectively, and operate refineries and manufacturing plants more gasification could make resources available
efficiently. Digital technologies also provide a route to faster and better decision-making
2.0

that are currently inaccessible, particularly


Floating boosting safety, productivity and efficiency.

i
subsea.

v
t ri

ale
facilities
lli o

Nuclear technology is often seen as an

nt

logy
bo data analytics and automated systems technological improvements in oil and
n

(b established lower-carbon source of energy


Unconventional e oe
gas technology stand out as the leading contributors for gas we also expect to see gains made for power and heat generation. Identified
Imp

)
0.7 tri reducing costs. These technologies have in all other resource types, with nascent conventional sources of uranium for nuclear
l li o n important roles in enabling and integrating technologies in areas such as marine and fission are abundant and there has been
rov

boe
other technologies, and enhancing safety offshore wind having the most scope limited exploration. Although technology is
ed

and reliability. for improvement. likely to have the most impact in conversion
Technologies for
re

After oil, coal is the second largest where atoms split to create energy, there is
ve Enhanced oil unconventional
co

scope for improvement in several aspects


ry recovery oil and gas
Technology will deliver benefits
contributor to meeting primary energy
demand and, globally, the largest source of of the nuclear supply chain. Exploration for
across a broad range of primary uranium could be enhanced through
fuel for electricity generation; however, it
Exploration energy resources globally better field mapping and detection. In fuel
also has the highest carbon content of any
processing there is scope for improved
New Technology lies at the heart of accessing primary energy source. Coal is abundant,
discoveries and harvesting all forms of primary with North America and Asia Pacific holding milling, conversion, enrichment and
Source: BP. energy. In the same way that we envisage nearly 70% of the global resource. It is fabrication techniques. In addition to
BP Technology Outlook 2.0 Energy resources 13

Engineer in control room of


nuclear power station,
Suffolk, England, UK.

The turbine hall at Russias


largest hydroelectric power
station Sayano-Shushenskaya.
Nuclear technology is often seen as an
established lower-carbon source of energy
for power and heat generation.

Biomass is currently the most widely


utilized renewable source of primary energy.
mined uranium, reprocessed spent fuel, It is used extensively in low-efficiency Many of the potential locations where water today, with increases in future technical
re-enrichment of depleted uranium and stoves for residential cooking and heating in can sustainably drive turbines at scale have potential largely expected to come from
enriched fuels from nuclear stockpiles developing countries, as well as for biofuels already been exploited. Small increases in multi-junction solar cells able to harvest
can also be used in some reactors. There is and sometimes for power generation using its technical potential may come through a greater range of the light spectrum
hope that small modular nuclear could more advanced technologies. improved turbine design coupled with and solar thermal to operate at higher
mitigate upfront capital costs, which better regulation of flow and reduction of working temperatures. Following bioenergy, hydroelectricity is the most
Technology can assist by enabling gains in
hamper nuclear economics. head energy losses. widely accessed renewable source of primary energy.
crop yields through biosciences as well as In general, wind and solar face challenges
Renewables (primarily biomass, hydro, mechanization of agriculture in emerging Of the remaining sources of renewable with regard to their intermittent nature a
wind and solar) do not deplete over time, so economies. Advances in fertilizers and energy, wind and solar are most prominent feature that could have a destabilizing effect
the requirement to continually discover new pesticides and improved irrigation today even though they currently make on electricity networks. Deployment in
resources to replace those consumed does techniques, coupled with optimization relatively small contributions to the global tandem with storage technologies could
not exist. through satellite imaging, will contribute energy mix. For wind, future improvements eliminate these issues but at the expense of
to improving yields. Opportunities also lie are expected to come from increased higher costs and lower efficiencies.
While renewables generally have smaller
downstream in the use of technologies turbine size, blade length and design, hub For wind, future improvements are expected
carbon footprints, the delivery of energy
capable of turning cellulosic (i.e. non-food) heights, tower technologies and gearbox to come from turbine size, blade length and
from sources such as wind and solar is
variable and, in many cases, poorly matched
feedstock into biofuels, thus reducing improvements. Offshore innovation, such design, hub heights, tower technologies and
competition with food crops for land and as advances in structure design, floating gearbox improvements.
to demand. Renewables are also of lower
other natural resources. Increased recycling platforms and foundations to support larger-
energy density than fossil fuels and are
and/or reuse of waste biomass, such as the scale towers, could open access to wind
often located in areas remote from demand
production of liquid fuels from waste food resources at water depths greater than
sources significantly increasing end-use
oils or biogas from landfills and manure, are 200 metres.
cost. In total, renewables of all kinds
possible, but likely to play a limited role.
contributed nearly 15%1 of total global Solar is the most abundant of all energy
primary energy demand in 2012. Following bioenergy, hydroelectricity resources, with future potential driven by
is the most widely accessed renewable various capture and conversion technologies Solar is the most abundant of all energy resources,
Biomass is currently the most widely with future potential driven by various capture
source of primary energy. As a resource, at different stages of development. PV and
utilized renewable source of primary energy.
it is well understood and technologies to solar thermal are the most widely deployed and conversion technologies at different stages
harvest its energy are largely mature. of development.

1
Source: IEA World Energy Outlook 2014.
BP Technology Outlook 2.0 Energy resources | External perspective 14

Paul Markwell Judson Jacobs


VP of Upstream Oil and Gas Consulting and Research, Director of Upstream Oil and Gas Research,
IHS Energy IHS Energy

Oil and gas technology development is


revolution to develop solutions that draw key insights
Optimization a long game. Producers must commit from high-volume data streams, such as detecting
Automation and to unwavering innovation through the when a piece of equipment is going to fail or identifying
mechanization oil and gas price cycles if they are to sweet spots in unconventional oil and gas plays.
meet demand safely and at competitive
technologies developed in the defence and
cost through to 2050 and beyond. manufacturing sectors to oil and gas operating
Nevertheless, rapid changes in price environments. Applications include deploying robots to
such as the halving of the oil price inspect difficult-to-access elements such as offshore
between 2014 and 2015 naturally bring risers, and piloting unmanned aerial systems into areas
that are dangerous for human intervention.
into focus the need for oil companies and
their suppliers to reduce costs to maintain simulation tools to increase production regularity and
viable returns. Technology offers help run equipment and facilities closer to their designed
on two fronts. capacities.

The first is in raising short-term production, the A common thread running through these areas is
denominator in the cost-per-barrel equation. The other the increasingly critical and enabling role of digital
involves attacking capital costs and operating expenses technologies. Evidence analysed by IHS Energy in the
Data-driven past decade confirms that digital technologies applied
analytics head on. Both place an emphasis on efficiency.
in practice can improve oilfield performance on several
A focus on efficiency is not new to the oil and gas sector, fronts, including:
but IHS Energy observes that until recently it has been
limited to select industry pockets of excellence. One
such pocket has been the exploitation of shale gas and
tight oil resources. Their phenomenal growth since
the late 2000s can be attributed largely to continuous The new emphasis on efficiency places high demands
improvements in manufacturing-style drilling and well- on a digital infrastructure that is able to collect, transmit,
completion technologies and techniques. In the lower- analyse and act on data acquired throughout asset
Robotics and operations. It is also setting oil and gas companies on
unmanned systems oil-price environment post-2014, producers need to
mirror such improvements across their broader portfolios. the path to becoming true digital organizations, thereby
The resulting areas of active technology development that accelerating a movement that was already under way.
External perspective aim to deliver on these expectations include: More broadly, a host of upstream technology innovations
seismic imaging, drilling, engineering, enhanced oil

Prioritizing technologies
repetitive oil and gas activities. Drilling automation is an
opportunity area that is attracting significant research
recovery, digital technologies will help to unlock oil
and gas resources; however, the industry will need to
be nimble to prioritize different technology elements

through the oil and gas price cycles and development attention. throughout the price cycle.
BP Technology Outlook 2.1 Conversion and end use 15

y choices
in power and tran
spo
rta
tio
2.1 Conversion
g
hn
o lo n
and end use
c
Te

In the following section, we focus on the


The continued growth in
electricity generation and transportation
Sources of global electricity
energy demand, particularly in sectors, which together accounted for supply in 2014
non-OECD countries, provides approximately 61%1 of the worlds primary
the backdrop for the changes energy consumption in 2014. We have Nuclear 11%
placed less emphasis on the heat sector, Non-hydroelectric
in primary energy conversion renewable sources 6%
which accounts for around 50%1 of global
and use. In the future, new final energy demand today, delivered either: Oil 4%
extraction, conversion and
Directly through the combustion of
consumption technologies at fossil fuels and biomass, or from natural
times encouraged by government sources such as solar and geothermal.
policies will compete with more Indirectly by electricity or through the Coal 40%
established power generation recovery of waste heat from combustion.
and transport fuels production In the US, for example, nearly 70%2
pathways. This competition is of heating demand is met directly by
likely to result in some market fossil fuels and nearly 30%2 indirectly by Gas 22%
electricity. Technologies that reduce the Hydro 17%
Liquid fuels, volatility and disruption for demand for heating, such as insulation,
including biofuels, incumbents.
will continue to could have major impacts on the carbon
dominate the footprint of heating in more mature Nuclear, non-hydroelectric renewable sources and hydro
New approaches
transportation economies, as more generally could heat data is from BP Statistical Review of World Energy
to how we gather, 2015. Oil, gas and coal data are estimated.
market. supplied from lower-carbon sources,
convert, store and
use energy will have such as electrification combined with Source: BP.
profound implications in Technology advances heat pumps. It is difficult to compete cost
power and transportation will continue to drive effectively with the sheer instantaneous
markets in future. down the cost of scale of energy delivery of heating fed by
renewable power
towards the cost of
1
IEA World Energy Outlook 2014.
fossil-fuel power, but 2
US Department of Energy and US Energy Information
system integration Administration.
costs may rise with
their deployment.
BP Technology Outlook 2.1 Conversion and end use 16

x2 x2
-14% -24% Areas of opportunity for cost
reduction in onshore wind
Consistent with historical trends, we would expect turbine technology
the costs of onshore wind and utility-scale solar PV to
continue to decline at around 14% and 24% respectively
per doubling of cumulative installed capacity.

natural gas systems. The future shape of In recent years wind and solar PV Electricity generation technology
the heat sector is likely to be influenced installations have been the dominant form cost trends Onshore wind technologies
most by the relative costs of different of new-build capacity additions in some Incremental improvements in technology Technology advances in onshore wind, such as increasing tower heights, Blades and
control
feedstock options and policies that regions of the world. Their impact on global have continued to feature across most longer rotor blades, improved site optimization and increased turbine efficiency, 25%
could jointly drive greater electrification electricity generation output, however, has conventional electricity generating have led to improvements in recent years in resource capture. For instance,
of heating and decarbonization of the been less significant than this growth might technologies. For instance, in the past increasing the height of towers to accommodate 50-metre-diameter rotor blades,
in average wind speeds of 7.5 metres/second, has increased the amount of wind Drive train
electricity sector. imply because of the intermittent nature decade or so, there have been incremental 10%
of sunlight and wind. Consequently, the advances in combined-cycle gas turbine energy captured by approximately 20%. Turbines with 50-metre-diameter blades and
larger rotors accounted for more than 80% of installed capacity in the US in 2014,
amount of electricity that can be generated (CCGT) power-plant design that have taken Tower
compared with 50% in 2012 and less than 10% in 2009. Advances such as these are
The electricity generation sector for a given period from 1GW of wind or conversion efficiency from approximately 5%
contributing to significant reductions in the levelized cost of electricity for new-build Hub and
solar PV capacity is much lower than from 50% to 53%, on a higher-heating-value onshore wind. nacelle
Current status
1GW of fossil-fuelled or nuclear generation. basis. The recent growth of wind and solar 5%
The electricity sector has long seen Continued advances in onshore wind technology are expected to occur across a
PV capacity has been driven by technology Development
competition between different primary Depending on the location and quality of range of elements such as ground base and structure design technologies to support 15%
advances and economies of scale.
energy feedstocks and conversion the resource, for any given year, average taller towers, and new materials and manufacturing processes to further increase
Consistent with historical trends, we would
technologies, with coal, gas, hydroelectric utilization levels are likely to range from blade sizes and reduce failures at higher loads. Improved blade designs will enable
expect the costs of onshore wind and Balance of
and nuclear each individually providing more 20% to 50% for onshore wind and 10% to construction of larger-scale components, with developments in sensors and control
utility-scale solar PV to continue to decline systems enabling active aerodynamic control throughout the blade length. Better plant
than 15% of annual global electricity supply 25% for solar PV. Despite these relatively 10%
at around 14% and 24% respectively per drive design and improved gearbox reliability, together with prognostic maintenance Grid
at any one time in the past 25 years. In 2014 low levels of potential generation and the
doubling of cumulative installed capacity. systems, predictive technologies and active control systems, will further increase connection and
approximately 90% of global electricity was recent economic downturn placing pressure transmission
This shows how the costs of small turbine reliability and efficiency. In short, significant scope remains for wind
supplied from these sources with a small, on the public finances, which have been 5%
modules, such as onshore wind turbines, technology to improve performance and reduce costs. Lifetime care
but growing 6% from non-hydroelectric needed to subsidize and incentivize their
batteries or solar cells, can decline much 15%
renewable sources (predominantly deployment, wind and solar have grown
faster than those of large capital intensive
bioenergy and onshore wind). Since 2010 significantly, albeit starting from a low base.
modules, such as nuclear or CCS. However, Low-cost
global wind generation capacity has grown
such developments themselves would manufacturing
at an average rate of 17% per year reaching 5%
also benefit from economies of scale and Raw
a total of 370 gigawatts (GW) by the end
mature, extensive supply chains, albeit to material cost
of 2014. A total of 40GW of new solar PV 5%
a lesser extent.
capacity was installed in 2014, almost as
much as the cumulative amount installed up
Source: BP.
to 2010, to reach a total installed capacity of
around 180GW at the end of 2014.
BP Technology Outlook 2.1 Conversion and end use 17

Operators assembling a
turbine rotor at ground-
level, before it is lifted on
to the tower at the Cedar
Creek Wind Farm in Weld
County, Colorado, US.

Cooling towers of a nuclear


power plant, Clay Station,
California, US.

Increasing contribution from increased penetration of intermittent We estimate that grid integration costs
intermittent renewable generation sources of electricity generation will could range from $8 for each megawatt
For electricity, it is imperative that supply create challenges for the continued stable hour (MWh), supplied by the intermittent
and demand are constantly matched operation of electricity networks, and will generator in a mature, no-growth system
within very narrow operational parameters. result in greater curtailment and/or other with established reserve capacity and
Unplanned or sudden deviations mechanisms for managing over-generation. existing increasingly under-utilized flexible
(intermittency) in electricity supply or The incremental cost of integrating plants providing backup, to $30/MWh for a
demand have been an ever-present intermittent generation such as wind growing system with new flexible gas-fired
challenge for power-system planners and and solar into electricity systems, which plants built to provide backup. Gas-fired
operators seeking to maintain system increases as greater volumes are connected single-cycle gas turbines (SCGT) generally
stability and keep the lights on. to the grid, is generally not included when provide one of the most economically
considering their respective investment viable and immediate options since they
The frequency and magnitude of
economics. It is a highly complex variable are highly responsive and have low
intermittency, however, has grown with
that depends on factors such as generation construction and fixed costs. These are
the addition of some renewable sources
and demand profiles, the scale and variety important considerations when building
of electricity generation, particularly wind
of the installed generation base (including plants that will have low operating hours
and solar PV in recent years. Although no
the reserve margin) and the levels of and can be deployed quickly and at scale.
generating asset will ever be 100% reliable, flexibility and reliability inherent in any Integration costs are likely to be even higher
gas, coal, nuclear, biomass, geothermal given network. if intermittent renewables provide the major
and some forms of hydroelectric plant are
To manage intermittency, there are share of electricity production.
considered sufficiently reliable (at rates
higher than 80% availability) to be deemed essentially four technology-based options: Looking at the medium to long term,
firm (dependable) and therefore able to 1. Increased connectivity and integration of system operators will be able to source
provide baseload generating capacity. transmission and distribution grids. some of the balancing services, required
2. Flexible generation (typically fossil fuelled). to manage intermittency, by deploying
Assuming current levels of system
3. Electricity storage. smart grids enabling greater and more
Solar PV and onshore flexibility, some power systems may be
wind are two 4. Demand response (smart grids). immediate demand response. In the short
able to accommodate 2550% intermittent
technologies that are term, however, these are a more expensive
renewable electricity penetration. Beyond The last two are largely nascent and
destined to play an proposition than sources such as flexible
this level, or if current levels of system currently expensive. Flexible generation
increasingly important generation that are readily available today.
role in the future. flexibility are not maintained, the offers the most immediate solution to
intermittency in many countries.
BP Technology Outlook 2.1 Conversion and end use 18

Levelized cost of electricity in North America to 2050


The costs shown in the chart are our expected case in 2012 US dollars.
$ per megawatt hour (MWh)

Carbon price of $80 per tonne of carbon dioxide (CO 2) equivalent

Carbon price of $40 per tonne of CO 2 equivalent


We see conventional gas and coal remaining the
210 lowest-cost options for generating electricity in
Integration cost of $30 per MWh
North America and most other regions through to 2050,
Integration cost of $8 per MWh although it would only take a modest carbon price (~$40/
Full life-cycle electricity generation cost tonne of CO2) for new-build gas and increasingly lower-cost
renewables to displace existing coal.

145
137
133
Electricity generation We see conventional gas (excluding for North America. Although CCS is a
120
technology cost projections imported liquefied natural gas) and coal nascent option, it could provide flexible,
103 107 Public policy measures can vary the cost remaining the lowest-cost options for dependable and near zero-carbon
of electricity generated from power plants generating electricity in North America generation at costs lower than many
84 by requiring the adoption of emission and most other regions through to 2050, renewable generation options.
80 75
74 74 71 control technologies or imposing a cost although it would only take a modest carbon
66
on emissions such as CO2 via a carbon price (~$40/tonne of CO2) for new-build gas
59
tax or emissions trading system. These and increasingly lower-cost renewables to
44 favour the substitution of higher-carbon displace existing coal. In North America,
38
options with lower-carbon ones such as new-build onshore wind farms have the
renewables for fossil fuel or natural gas for potential to provide energy at less than $50/
coal in the fossil-fuel sector. Other public MWh but would require flexible back-up
2012

2050

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050

2050

2012

2050
policy measures, including subsidizing generation, such as gas-fired power, in
lower-carbon technologies such as wind, times of low wind and/or high demand.
solar PV and nuclear, can make them cost
With a higher carbon price, natural gas
competitive. The cost assessments in this
Existing Existing New New Retrofit Onshore Nuclear CCGT with Utility-scale is increasingly advantaged over coal.
combined-cycle coal CCGT coal biomass1 wind carbon capture solar publication do not include any incentives or
gas turbine and storage photovoltaic Without a carbon price and excluding CO2
special provisions for any technology, but
(CCGT) (CCS) 2 transportation and storage costs, adding
do include grid integration costs (ranging
CCS to coal and CCGT plants would
between $8/MWh and $30/MWh) to
Reconfigure coal power plant to biomass power plant.
increase the cost of generation by $25/
1
facilitate a fairer comparison. Solar PV
Power sourced from gas or coal MWh and $16/MWh respectively by 2050.
will remain the lowest cost without
2
Because, in 2012, there were no commercial-scale CCS plants we have not included a cost and wind are particularly sensitive to the
profile for 2012. Zero cost is assumed for CO 2 transportation and storage, because storing However, a higher carbon price makes CCS
a carbon tax or price. quality of their primary energy resource and
CO 2 could have both a net cost (in case of standard CO 2 storage) or a net value (when CO 2 increasingly competitive and consistently
is used for enhanced oil recovery). capital expenditure costs, leading to higher
Renewable power costs will lower cost than nuclear, especially when
Not shown are niche technology options such as geothermal, and even higher-cost uncertainty with their projections.
continue declining. renewable options such as concentrated solar thermal, offshore wind, engineered used with natural gas, as illustrated
geothermal systems, wave, tidal or ocean thermal power.
Values for coal of $80/tonne, gas of $5/mmBtu and pelletized biomass of $80/tonne have
been used for consistency. Weighted Average Cost of Capital (WACC) = 10%.
All assessments exclude incentives and special provisions.

Source: BP.
BP Technology Outlook 2.1 Conversion and end use | External perspective 19

Jenny Chase
Solar Analyst,
Bloomberg New Energy Finance (BNEF)

External perspective

Major savings through The major changes in power in the


next 40 years are likely to be in energy
higher efficiency and numerous other incremental
tweaks. These will continue to reduce costs to $0.21/W

new energy technologies


by 2040, even if there are no dramatic breakthroughs
storage and integration technologies, (such as perovskites adding a second active layer to
whereas the changes in the past 10 years the cell). Balance of plant, engineering, control and
have been about decreases in wind and monitoring system costs will also come down.
solar photovoltaic (PV) costs. In wind, the story is similar, with both capital expenditure
reductions and performance improvements, including
Solar PV, in particular, has become cheaper, with PV lighter materials, improved aerodynamic control, better
modules priced around $0.60/W in 2015 compared with operation and maintenance strategies, and site-specific
$4.49/W in 2005 (in 2014 dollars). This has been mainly turbine design. When combined, these factors will
driven by the establishment of special factories for solar- contribute to a fall in the cost of wind from about
grade silicon, thinner wafers, better-shaped busbars for $100/MWh in 2000 to about $60/MWh in 2015.
Solar PV and onshore wind generation costs now begin
to be attractive at a system level for power infrastructure
planners, even though provision must be made to manage
The silicon PV experience curve intermittency, for example, by running fossil-fuel plants
at low utilization and by having the means to curtail
100
1976 renewable generators when necessary to avoid damage
to the grid.
Consequently, solar PV and onshore wind generation

Price per W (2014 $)


1985
10
2003
costs are not directly comparable with the generation
cost from fossil fuels and, in most places, intermittent
2006 generation will carry a discount.
1 2012 BNEF expects the average cost of residential stationary
2014
Q4 2012 energy storage systems to fall from $1,600/kWh in 2015
2013
to below $1,000/kWh in 2020 and $260/kWh in 2040.
Although there are products currently below this price
0.1
1 10 100 1,000 10,000 100,000 1,000,000 point, these are not yet on the market and are currently
Solar PV and onshore Cumulative capacity (MW) subject to supply constraints.
wind will become
increasingly attractive as Experience curve Historic prices (Maycock)
the cost of production Chinese c-Si module prices (BNEF) Thin-film experience curve
reduces through First solar thin-film module cost
improved technology.
Source: Maycock, Bloomberg New Energy Finance.
BP Technology Outlook 2.1 Conversion and end use 20

Liquid fuels, including biofuels, will continue Liquid fuel production cost in North America to 2050
to dominate the transportation market. The costs shown in the chart are our expected case in 2012 US dollars.
$ per gigajoule

Carbon price of $80 per tonne of CO 2 equivalent

The transport sector Raw materials costs typically represent Compared with crude oil and liquid Carbon price of $40 per tonne of CO 2 equivalent
7080% of refining production costs, so products, natural gas is much more difficult 43.0
Brazilian sugar cane is forecast to
Fuels production Fuel production cost
remain the lowest-cost fuel to 2050,
efficiencies in operations and capital to transport over long distances, creating
Global demand for energy for transport even with a carbon price applied.
expenditure, while valuable, will have less niche opportunities for liquids production 35.6 35.0
is likely to be met largely by liquid fuels.
impact on overall fuel production costs. using low-cost gas from stranded fields. 34.4 Lignocellulosic (LC) ethanol is the most
Crude oil will be abundant enough to expensive fuel today, but with technology
Although refining technology is relatively
sustain refining as the major source of Today, production cost is one of the factors advances could be cheaper than corn
mature, we expect that incremental
transport fuels and will offer low feedstock limiting biofuels penetration into the transport 29.0 ethanol in the 2050 timescale.
improvements in refinery efficiencies
and conversion costs. A few alternative fuel market, although some pathways have 26.5
will continue to be made through the Biomass-to-liquids have few opportunities
pathways may compete, such as sugar cane the technical potential to be competitive. 24.5
development of conventional technology to reduce costs and look to remain
ethanol, but most other pathways will need Brazilian sugar cane ethanol can already 22.3 uncompetitive.
and new-build refineries or major upgrades,
major advances. compete economically with fossil fuels, 19.0 19.3
resulting in higher efficiency. Refineries 17.8 17.6
but other types of bioethanol currently
Consumption of energy in the transport will have to adapt to changes in crude
rely on government support. Corn milling
sector is expected to continue growing at composition and impurity levels (nitrogen
and fermentation technologies are mature
approximately 1% per year in the coming and sulphur compounds or metals,
(there are more than 150 plants in the US
decades, although it will slow after 2025. for example) that have an impact on
alone) so they have limited scope to improve
The growth comes primarily from non- processing. In addition, research into new
manufacturing yields and operating costs.
OECD countries due to a rapid increase in vehicle engine technologies may encourage
Roughly half to two-thirds of the production

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050
vehicle ownership there. This is expected changes in fuel quality, such as higher-
cost is due to the price of corn, although this
to be partly offset by a decline in OECD octane gasoline.
may be partly offset by co-products such
demand, caused by vehicle efficiency
The implementation of GTL technologies, as animal feed.The cost of transporting raw
improvements outpacing slower growth in
which make liquid fuels and chemicals biomass is significant. With biomass logistics
the size of the vehicle fleet.
from natural gas, may be spurred by the often constraining the scale of biomass Refinery Gas-to-liquids Biomass-to- Sugar cane Corn ethanol LC
abundance of shale gas in North America. conversion facilities, achieving economies of via syngas liquids ethanol (Brazil) ethanol
Refining, coal- and gas-to-liquids (CTL and via syngas
GTL) and biofuels production are the key Current GTL FischerTropsch technology scale becomes critical.
fuel conversion pathways. Raw materials using natural gas at $34/mmBtu will
Values for oil of $80/bbl Brent, gas of $5/mmBtu, pelletized biomass of $80/tonne and
(or feedstocks), plant, infrastructure and compete today with conventional refining sugar cane of $33/tonne have been used for consistency. Energy grass for LC ethanol
declines from $73/tonne to $44/tonne over the period. 10% cost of capital for fixed-asset
operating costs play out differently in each using crude at $80/per barrel (bbl). investments. No taxes or subsidies included.
of these pathways.
Source: BP.
BP Technology Outlook 2.1 Conversion and end use 21

Technologies for creating a more efficient, less


energy intensive vehicle fleet include hybrid
vehicles, and advanced fuels and lubricants.

The cost of producing LC ethanol, which renewable energy content in fuel blends. lubricants. Liquefied natural gas (LNG)
is derived from the de-polymerization and Most gasoline vehicles manufactured to could displace diesel from some of the
fermentation of energy grasses, wood or date have a 10% limit on the amount of heavy-duty market, with compressed
agricultural residues, is around double that ethanol that can be present in the gasoline natural gas (CNG) increasing its share of
of diesel and gasoline when crude oil is at they use. A 16% bio-butanol gasoline blend the light-duty vehicle market in regions with
$80/bbl. To achieve cost parity on an energy would be compatible with these vehicles low-cost natural gas and policy support.
basis with fossil fuels in the US and other and double the renewable energy content,
temperate regions, cellulosic biofuels are helping to transition the ethanol blendwall. Fuel economy of
likely to need policy support for at least a new car fleet
decade or more.
Transport vehicles Fuel economy
20 of
Demand for personal mobility is growing
Vehicle Fleet
There is, however, significant potential to
new
rapidly in the developing world, but slowing
car fleet
3
improve. In particular, better pre-treatment in OECD countries as the market saturates.
20

Litres of gasoline per 100 kilometres


NON-OECD US LIGHT VEHICLES
and enzymes can improve LC operating Vehicles with internal combustion engines 15
costs and ethanol yields. Today, the cost (ICEs) offer a range
OECD of reliable choices to EU
of raw materials represents about one- the consumer. Refined fuels from oil serve
Litres of gasoline per 100km

15 CHINA
quarter to one-third of the total cost of most of the road transportation energy
10
Billions of vehicles

production, depending
2 on local conditions demand worldwide, with some exceptions
and including the value of co-products. such as ethanol in Brazil and the US, and
Improving the yield reduces the feedstock natural gas where available locally at low
10
element of the ethanol production cost and cost, such as in Argentina, Bangladesh, 5
also reduces the size of equipment needed Egypt and Pakistan.
and hence capital1 expenditure. In part, the
Vehicles powered by liquid fuels, including
long-term economics depend on technology 5
biofuels, are likely to dominate global sales 0
development, but will also be influenced
through to 2035 and beyond. We expect 1975 1995 2015 2035
by improvements arising through
the average efficiency of new light-duty
experience from developed commercial- US
Vehicles powered by
0 vehicles offered to the market to improve 0
scale LC operations.
1975 1995 2015 2035 per year as a result of increased 1975 1995 2015 2035 liquid fuels, including
by 23% European
Union biofuels, are likely to
Alternative bio-molecules, such as bio- hybridization and improved powertrains
dominate global sales
butanol, provide anSource
optionBPto increase
Energy the2035
Outlook combined with advanced fuels and China Source: BP. through to 2035.
*New European Driving Cycle
BP Technology Outlook 2.1 Conversion and end use 22

Technicians preparing
a car for fuel economy
testing at BPs
Technology Centre in
Bochum, Germany.

Vehicle refuelling at
BP service station,
Chicago, Illinois, US. Technical potential of transport vehicles to 2050
Medium-sized passenger vehicle cost (in 2012 US cents per km).

Carbon price of $80 per tonne of CO2 equivalent

Carbon price of $40 per tonne of CO2 equivalent

Fuel cost 42.9


Vehicle technologies such as direct As their only tailpipe emission is water, The internal combustion-based vehicles
Global vehicle fleet Vehicle cost
have very similar cost profiles due in large
fuel injection, engine downsizing and fuel-cell vehicles running on hydrogen
2.5 turbocharging, as well as the use of advanced provide local environmental benefits. part to a trade-off between fuel and vehicle
cost, and there is little to choose between
fuels and lubricants, are boosting the However, steam methane reforming, them on a lifetime-cost basis.
effectiveness and efficiency of the internal which generates CO2 emissions, is
2 Currently, electric vehicles cannot compete
combustion engine. Such innovations mean currently the main route to making hydrogen.
on cost but, if the overall vehicle cost can
that gasoline engines could approach the Toyota and Hyundai have already launched 26.2 reduce by about 50% over time, they will
Billions of vehicles

efficiency of diesel engines. fuel-cell vehicles in certain markets, start to become economically competitive.
1.5
and some other Original Equipment Fuel-cell vehicles are currently about
Advances in battery technology mean
Manufacturers (OEMs) plan launches soon. 19.8 four times the cost of a conventional
that electric vehicles are likely to be a
1 Several OEMs have also built up their vehicle. Very significant technical progress,
viable future option, especially in urban 16.8
as well as an economic hydrogen
capability in fuel cell technology. However,
environments where stopstart driving 13.9 14.3 infrastructure, is required for them to
given the technical, hydrogen production, 13.2 12.6
is typical. Hybrid vehicles are becoming become cost competitive.
0.5 storage and refuelling infrastructure 11.4 12.0 11.7 11.4 11.6 11.7
available at more modest costs and, The gains in future vehicle efficiency will
challenges, as well as the relative vehicle
although electric vehicle batteries remain be driven by a shift in vehicle fleet mix
costs (see opposite), it is unlikely that
0 relatively expensive, technology advances toward more fuel-efficient powertrains,
significant adoption of these vehicles will including manufacture of cars with
1975 1995 2015 2035 and economies of scale are likely to reduce
take place in the immediate future. powertrains other than those shown in

2050

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050

2012

2050
2012
their costs over the next two to three
Non-OECD the figure, which may have powertrain
decades. Life-cycle emissions from electric additions (for example, turbocharging)
OECD vehicles vary as the electricity used may and/or combinations (for example,

2010

2050
come from renewables and nuclear power, D D CNG plug-in hybrids).
Source: BP Energy Outlook 2035.
or from fossil energy such as coal or gas-
fired power stations. In regions where coal Gasoline Gasoline Diesel Compressed Battery
Diesel Fuel cell
Source: BP Energy Outlook 2035. is the primary source of power generation, hybrid natural gas electric
hybrid
hybrid
the overall emissions associated with
electric vehicles can exceed those of diesel
Vehicle cost per kilometre (km) is based on North America average distance travelled of ~194,000km over the vehicle
or non-plug-in hybrid vehicles. life. Fuel cost includes a 10% weighted average cost of capital for fuel production plant with nominal oil and gas
prices of $80/bbl and $5/mmbtu. Vehicle and fuel costs do not include taxes or sales margins.

Source: BP.
BP Technology Outlook 2.1 Conversion and end use | External perspective 23

Andreas Schamel
Director Global Powertrain,
Research and Advanced Engineering, Ford Motor Company

External perspective

The continuing evolution technologies, as well as in-air flow management


are in development and could deliver significant
improvements in engine thermal efficiency.
Hydrogen fuel-cell stacks are likely to be cost
competitive with the internal combustion engine in
the next five to 10 years, although their take-up will

of automotive technology Hybrid vehicles of which there are already more


than three million on US roads are set to become
more popular. The stopstart applications in use
be affected by the overall vehicle cost, availability of
supporting infrastructure and the original energy
source used for hydrogen production.

Over many years technology has There is no sign of the pace of technological change now are basic levels of hybridization and we can see Engines aside, next steps in computational technology
slowing in the automotive market. So, what technologies opportunities to develop that more. Hybrids still rely could fundamentally change the way in which we
transformed the design and manufacture
might come to the fore in the face of growing customer on efficient combustion engines. Pure electric and drive. For example, the car that handles traffic jams on
of our everyday vehicles. There is more demand, the need for cost competitiveness and hydrogen fuel-cell vehicles offer alternative solutions, motorways and returns control to the driver once the
computing power in the average car increasing environmental requirements? although they, too, have their challenges. Unlike a jam clears, has already become a reality. Developments
today than there was in the Apollo 11 combustion engine, a battery must carry the fuel, such as this predict a radically different driving
For the past 100 years, the internal combustion engine the reactant and the waste product within it, resulting environment to that we experience today, just as
space craft when it landed on the
has dominated car manufacturing. It is easy to see in limitations in a cars performance and travelling technology has revolutionized our experience of the
moon in 1969. why, with the availability of large quantities of relatively range. The other challenges are about fuel source automobile in the past 50 years.
cheap oil, combined with the simplicity of the chemical notably whether the electricity is produced from
Advances in design, engineering, computing, materials, reaction involved. Continuing advances in engines, fuels sustainable sources or from fossil fuels and battery
engine efficiency, fuels and lubricants have greatly and lubricants such as boosting and injection charging speed.
improved vehicle reliability, safety and performance
while progressively reducing environmental impact.
Parts for Fords 1.0-litre EcoBoost engine
laid out. The engine was named 2014
International Engine of the Year for the
third year in a row. The engine lowers fuel
consumption without sacrificing power.
BP Technology Outlook 2424

Key influences on
energy technology
So far we have discussed current technologies and how they may develop in the
future. The directions taken by energy technologies depend on many factors beyond
technology and innovation alone. In particular, future outcomes may be influenced
by increasing constraints related to natural resources and new possibilities from
emerging technologies, many of them relevant to a range of industrial sectors.

Diverse factors will shape the future technology landscape,


influencing the direction of travel and the final destination.
Hsin-Chu City, Taiwan.
BP Technology Outlook 3.0 Natural resource constraints 25

Energy and natural resources


The BP-funded Energy Sustainability Challenge research programme
investigated the relationship between natural resources and energy Of global man-made
greenhouse gas (GHG)
3.0 Natural resource
constraints
demand and supply.
emissions, about 30%
Based on world averages in 2010. are associated with food
production and about
More than 10% of 67% come from fossil-fuels
global energy use is production and use.
for the mining and
processing of
materials.

About 5% of annual Atmosphere


steel production is
used in the oil and GHGs
gas industry. Energy production and The energy technology choices we make Increasing stresses on natural resources,
can have a significant impact on the mix driven by socio-economic and population
82% of phosphorus consumption result in GHG
is used as and scale of natural resources needed growth, present major challenges to
fertilizers. emissions and associated climate when producing and using energy. providing affordable energy sustainably.
change a truly global challenge. Scarcity of resources already creates
Materials Agriculture
For example, power plants need water
uses 2% of
These processes also require the for cooling, and oil production facilities
significant issues in some regions of
the world, while GHG emissions and
global energy. use of natural resources water, need water for waterflooding and other
associated climate change are a global
land and minerals with varying uses. However, the volume of water
problem.
withdrawn or consumed varies enormously
Energy impacts around the world.
according to the processes being used. Historical analysis of the relationship
Similarly wide variations exist when between growth and GHG emissions
considering the land, water and fertilizers shows that a major shift will be required to
used by bioenergy crops or the minerals decouple GHG emissions from continued
Land underpinning solar PV energy, wind farms, economic and social development,
Biofuels use electric motors and batteries. particularly where development has been
2% of global built on fossil energy.
Energy production results in GHG
crop land.
emissions. In 2010 emissions from fossil- Technology plays a vital role in managing
fuel production and use accounted for natural resource constraints and making
about 67% of global man-made GHG the transition to a lower-carbon future
Water emissions, much of the rest being from affordable and sustainable.
other activities such as agriculture and
land use.
Less than 1% of global
water withdrawals is for
fossil-fuel extraction and
refining, compared with
about 12% for electrical
power generation and
70% for agriculture. 3% of global
energy is used
for water supply
and treatment.
BP Technology Outlook 3.0 Natural resource constraints 26

$2,050
Impact of technology on cost $1,100
$900
of reducing CO2 emissions Passenger cars
500
Downsized gasoline
today vs 2050 450
Emissions reduction in power is $430 Diesel engine
400
generally cheaper than in transport.
Full hybrid e.g.Prius

Relative cost ($) to avoid one tonne of CO 2


350
Continuous improvement in 300 E85 (sugar cane)
internal combustion engine cars $250
will reduce emissions at low cost, 250 Fuel cell (methane A global shift from coal to natural gas for power, improvements in energy
based H 2)
but large-scale decarbonization can 200 efficiency and ultimately CCS technology could be key parts of the transition
be achieved at a lower cost in the Electric vehicle
150
$170 (CCGT power) to a lower-carbon energy future.
power sector. $130
$130 Electric vehicle
100 (nuclear power)
In transport, technologies such as
downsized gasoline engines and 50
$50
diesel powertrains are the most 0
cost-effective options for reducing -$20
D
Todays cost Climate change Decarbonization can be achieved at lowest Renewables have the potential to make a
comparatively smaller amounts -50 In BP Energy Outlook 2035, we project that cost in the power sector. A global shift large impact in the medium to longer term.
of CO2. 2050
-100 -$90 -$90 GHG emissions from energy use will rise to natural-gas-fired power in place of Taking into account a modest carbon price
Note: Baseline is port by 25% over the next two decades, mainly coal, for example, represents a significant and costs for grid integration, they are likely
The cost to reduce CO2 via electric -150 fuel-injected gasoline
and hydrogen fuel-cell vehicles is engine car,which emits driven by increased energy consumption opportunity to create a bridge to a lower- to become competitive against coal, but
-200
high, and will will continue to be so, -$200 88kg CO 2 /GJ of gasoline in emerging economies. Although the carbon future. require backup, for example, from gas-fired
even with a rapid decrease in battery used (480km travelled).
-250 -$220 growth of emissions is expected to be power in North America.
and fuel cell costs. CO2 emissions per MWh from CCGTs are
less than that of energy demand as energy
less than half those from modern coal- The costs of GHG-mitigation technologies
In power, new-build natural gas use becomes less carbon intensive, the
fired plants. To secure this benefit through such as CCS are likely to fall. However,
combined-cycle power plants projected rate of increase is still higher than
the whole value chain, fugitive methane even following a prolonged period of
already offer negative avoidance the level that scientists and governments
costs relative to ultra-supercritical
Power generation emissions from natural gas systems need dedicated support for CCS demonstration,
500 say would be needed to keep the global
coal power plants in North America. CCGT to be monitored and managed. Gas is we believe a sustained carbon price of
450 mean surface temperature rise within 2C
Reducing emissions by adding CCGT with readily available in most parts of the world. at least $100/tonne is needed for it to
carbon capture and storage (CCS) to carbon capture of pre-industrial levels during the twenty-
400 For these reasons we project it will be be competitive for the majority of power
combined-cycle gas turbines (CCGT) Ultra-supercritical coal
first century.
the fastest-growing fossil fuel in the next stations and industrial plants where large
appears low cost relative to the coal
Relative cost ($) to avoid one tonne of CO 2

350 with carbon capture


power plant, but the cost of CO2 An effective energy transition will require two decades. amounts of CO2 would otherwise be
300 Nuclear
avoided increases to $140/tonne an increase in energy efficiency, while emitted to the atmosphere. Exceptions are
Nuclear power also provides a material
today comparing CCGT with and 250 $240 Onshore wind switching from higher- to lower-carbon- the rare instances where industrial plants
without CCS. with CCGT backup option for the power sector to decarbonize
200 intensity sources. This involves GHG- have particularly highly concentrated CO2
Solar PV with with some national power systems, such as
CCGT backup mitigation technologies across the whole streams and where projects can be linked
Intermittent wind and solar 150 France, already close to being zero-carbon
photovoltaic (PV) power require $110 economic system (including food and to local EOR initiatives.
100 $90 via a large nuclear contribution. In France,
backup sources, which increase construction sectors) and lower-carbon
73% of power comes from nuclear and
their cost and likely greenhouse gas 50 $25 $70 $50
$60 energy production deployed at scale.
footprints. $40 the average electricity emissions factor of
Energy companies have a vital role in
0 -$20
$0 $5 70 grams of CO2 per kWh is 85% lower
providing and using energy competitively as
Assumptions: North America cost basis. -50 than the global average. New-build nuclear
10% cost of capital for fixed-asset -$30 Todays cost well as finding the most flexible and lowest-
investments. No taxes or subsidies included. power, however, is expected to face cost
-100 cost routes to large-scale, lower-carbon
Values for oil of $80/bbl Brent, gas of $5/ 2050 and acceptability challenges, such as those
mmBtu and sugar cane of $33/tonne have -150 energy production and energy efficiency.
been used for consistency. Emissions are
Note: Baseline is baseload around safety, liabilities for decommissioning
ultra supercritical coal
on a well-to-wheel basis. -200 power plant emitting and the long-term storage of waste.
280kg CO 2 /GJ.
Source: BP. -250
BP Technology Outlook 3.0 Natural resource constraints 27

Recharging an electric
vehicle.

In Salah Gas operators


at the Krechba, Algeria,
gas field, where
approximately 4 million
Only about 12% of primary energy captured at tonnes of CO2 has been
source ends up as useful heat, light and motion. captured and injected
between 2004 and 2011.

Carbon capture and Flue gas CO2 injector Recycled Separation of Energy efficiency provides CO
Flue gas many
2 for of the CO2 injector doubling in size over the next 20 years, fuel technological advances are required to
storage (CCS) and with CO2 well/s CO2 CO2 from oil with CO storage
most affordable and2 practical means to
well/s
demand is only predicted to rise by 29%, make them more affordable and extend
enhanced oil recovery
(EOR) reduce GHG emissions in the near term. driven mainly by more efficient fuel and their range.
Carbon dioxide (CO2) Today only about 12% of global primary transportation technologies adopted by
Oil export Industrialization and urbanization are making
emissions from power/ energy captured at source ends up as the market. Tailpipe emissions of CO2 have
air quality an increasingly important issue for
industry mitigated by Power station CO2 capture Production useful heat,
Powerlight and motion.
station CO2 Wide-scale
capture fallen in many countries in the past decade
public health. Since 1950 the global urban
capture, transport and fuelled by gas systems wells oil + CO2 fuelled byof
implementation systems
gasenergy-efficiency and government targets exist to continue
injection for EOR. or coal or coal population has increased fivefold, and is
Pure CO2 technologies that could render the entire this downward trajectory. Measures that
for EOR
expected to increase by another 60% by
energy system more efficient would: promote more efficient use of products,
2050, when about 6.3 billion people are
such as raising awareness about energy
Oil-filled Increase affordability (by using Naturally sealed projected to live in urban settlements. In
reservoir formation (reservoir) efficiency or more innovative approaches
less energy). China, rapid urbanization of the population
such as vehicle sharing and dynamic road
has been accompanied by the growing use
Support energy security (by reducing management systems, also have a role
of cars for personal transport, and coal for
import dependence). to play in minimizing consumption and
home heating and power generation.
reducing emissions.
Help sustainability (by reducing
ector Recycled Separation of Flue gas CO2 for CO2 injector Compared with natural gas, combustion
CCS only emissions). Efficient powertrain technologies and
well/s CO2 CO2 from oil with CO2 storage well/s of these fuels releases higher amounts
CO2 emissions internal combustion engines that use
from power/industry In many cases this could be achieved cost of compounds and particulates that have
lower-carbon biofuels offer a particularly
mitigated by capture, effectively. As such, energy efficiency can adverse impacts on human health. A shift
Oil export cost-effective pathway to a lower-carbon
transport and injection be seen as being good for all seasons. In from coal to gas for power and to higher-
in geological storage. future. Electric and plug-in hybrid vehicles
commercial and residential buildings, for efficiency engines and more advanced
Production Power station CO2 capture may provide an increasingly common route
wells oil + CO2 fuelled by gas systems example, where energy consumption is fuels in the transportation sector could
or coal to emissions reduction, providing the power
forecast to grow rapidly, many opportunities substantially cut emissions of harmful
O2 sector is decarbonized in parallel. Our current
R exist for improved design and more efficient particulate matters, and sulphur and
projections suggest that combined hybrid
energy use, which could reduce energy nitrogen oxides.
Oil-filled Naturally sealed and battery electric vehicle sales will grow
reservoir formation (reservoir)
demand.
from approximately 2% of global vehicle
Better product design could also substantially sales in 2014 to approximately 10% in 2025.
reduce carbon emissions. For example, However, even full-battery electric vehicles
despite the global vehicle fleet potentially are not emissions free and significant
BP Technology Outlook 3.0 Natural resource constraints | External perspective 28

Professor Rob Socolow


Co-Director of The Carbon Mitigation Initiative,
Princeton University (New Jersey, US)

External perspective

Whats the price of atmospheric CO2?


All aspects of the flow of carbon through the Gas will gain on coal, and carbon capture and storage with $40 per barrel of oil
global economy will be affected by policies coal and gas power may become viable. On average today
in industrialized countries, 70% of the electricity leaving
that embed a concern for climate change.
At the extraction stage, the carbon in coal,
a power plant is consumed in a residential or commercial
building, so decarbonization will be further achieved by
or
oil and gas will be monitored and many

$100 per tonne


investments that create efficiencies in heating, cooling,
relatively low-cost opportunities to reduce lighting and appliances.
$5 per million Btu
associated atmospheric CO2 emissions will
emerge, such as avoiding methane leakage
and gas flaring.
New technology will enable all of these responses. To
stimulate the technological imagination, it is useful to
of CO2 = of natural gas
think through how various industries would respond to
a significant economy-wide price on atmospheric CO2
Major investments will shrink the carbon footprints of
networks that move energy by pipeline, rail, ship and
electric power line. A new network may be added that
emissions, say $100/tonne of CO2.
or
The impacts of such a price are particularly dramatic
moves CO2 from sites of capture, such as refineries,
upstream: it is equivalent to an increase in production costs
$200 per tonne
cement and power plants, to sites of use, such as for
of $40/bbl for oil, $5/mmBtu for natural gas and $200/tonne
enhanced oil recovery or safe permanent storage in
for high-quality coal. Downstream, the consequences are
saline aquifers.
more muted because the addition of unchanged distribution
costs leads to smaller percentage increases in retail prices.
of high-quality coal
At $100/tonne of CO2, a US gallon of gasoline costs an
additional 80 cents, while a kilowatt-hour of electricity costs
an extra 8 cents if produced from coal and an extra 4 cents
if produced from natural gas.
BP Technology Outlook 3.0 Natural resource constraints 29

Materials used in the energy Criticality indicators


Criticality indicators History has shown that reserves of materials are
sector and their criticality
This chart shows the main uses of key
Cr Cu
Cr Li
Cu Mo
Li Mo
6 1 High High
dynamic and that economics, geological understanding
and new technologies continuously drive reserve growth
?
materials in energy pathways and the
CHROMIUM COPPER
CHROMIUM LITHIUM
COPPER MOLYBDENUM
LITHIUM MOLYBDENUM 6 1
to meet demand.
factors that are critical to their production 5 2 Medium
5 2 Medium
and supply. These factors include reserves,
4 3 Low 4 3 Low
trade, environmental impact, processing,
substitutability and recyclability.

Energy supply chains are critically dependent 1. Recyclability Materials temperature-resistant permanent magnets.
on several key materials in making them Difficulty in recycling due to the availability Materials are widely used across the This suggests that material design in the
efficient, economic and clean. of suitable technology, logistics and
concentration of materials in end-of-life energy system. There would be no future may well proceed in a transformative
Changes in the energy system, driven by the products. electricity system as we know it without fashion, rather than incrementally.
copper, nor any piston, drilling rig, pylon
Ni Nb P Pt
need for decarbonization, will bring dramatic 2. Substitutability

Ni Nb P Pt
Research shows that many elements have
changes in the demand for certain materials. Loss of performance using alternative or nuclear reactor without chromium for
(non-critical) materials. a wealth of reserves. More importantly,
their corrosion-resistant steel. Material
Time is an important factor in addressing the NICKEL NIOBIUM PHOSPHORUS PLATINUM 3. Processing history has shown that similar to oil and
NICKEL NIOBIUM PHOSPHORUS PLATINUM extraction and production are also energy
criticality of materials. For example, a strike Complexity of production technology. gas reserves of materials are dynamic and
or fire in a large mine could suddenly affect and carbon intensive. Energy technology
4. Reserves that economics, geological understanding
supply (and price) worldwide and it typically choices may, in turn, fundamentally affect
An indication of shortage based on and new technologies continuously drive
takes years for a new mine to progress from reserve-to-production ratios. the requirements for materials and ores.
initial exploration to production. reserve growth to meet demand. In
5. Trade In recent centuries energy demand and its addition, increased recycling rates and
Influence of monopolies and/or
technologies have dramatically increased better recycling technologies together
non-open markets.
the demand for materials. The pursuit of with substitution and more efficient
6. Ecological impact
Impact, including on humans, due to new energy pathways will only be made manufacturing can provide a substantial
toxicity, radioactivity or handling risks. possible by having a sufficient supply contribution to supply. Fortunately, metal-
of critical materials at prices that make based materials can generally be used and
Main uses Main uses
Ag W U
economic sense. repeatedly reused.
RARE EARTH
ELEMENTS
RARE EARTH
ELEMENTS
SILVER
Ag
TUNGSTEN
W
URANIUM
U Automotive Nuclear
Automotive Nuclear
Material complexity also brings risks.
The potential substitutes for most
Ultimately, material reserve is a poor
indicator of criticality. It is the effectiveness
SILVER TUNGSTEN URANIUM
Batteries Oil and gas
Batteries Oil and gas materials are generally inadequate, supply of markets, and the complexity of supply
constrained, non-existent or not yet chains that determine availability of materials
Biofuels Photovoltaics discovered. For example, silver could be a for well-functioning energy systems.
Biofuels Photovoltaics
substitute for copper, but price excludes its
Coal Refining
Coal Refining widespread use. Replacing molybdenum,
Appliances cobalt, nickel or rhenium for specialist
Transmission
Appliances
and lighting
and lighting
Transmission steels with alternatives usually results in
a decrease in performance. There is no
Generation Wind
Generation Wind known substitute for dysprosium used in
Source: Materials critical to the energy industry An introduction (2nd edition).
BP Technology Outlook 3.0 Natural resource constraints 30

Water
Water in Energy
in energy Non-fresh/seawater
Non-fresh water
Ranges
Ranges of of freshwater
freshwater consumption
consumption intensities in key energy sectors.and dry washing 10
intensities
Amounts in key energy
displayed in m3 /TJsectors.
on logarithmic scale. 1 100
Amounts displayed in cubic metres per Freshwater
For power generation,
terajoule freshwater withdrawal
(m3/TJ) on logarithmic scale. intensities are also shown. flooding
Withdrawal occurs when water is removed from surface or groundwater,
0 1,000
atWithdrawal
least temporarily. m 3/TJ
occursConsumption
when waterisisthe portion of withdrawal which
is not returned to the same source from which it was removed. il
removed from surface or groundwater, lo
at least temporarily. Consumption is na
Worldwide, thermal power generation n t io
Non-fresh/seawater in
g
the portion of withdrawal that is not e in 10,000
withdraws 20 times more fresh water o nv
a lm
Non-fresh water

il
returned to the source from which C o

lo
than fossil-fuel extraction. Cand dry washing s

na
a 10 Shale
it was removed.

io
1 G gas

nt
100

ve
Fossil-fuels

on
Conventional Fresh water

nc
gas flooding production

U
100,000
0 1,000
m 3/TJ
Water generation is not consumed but is returned The amount of fresh water used varies
greatly within each energy sector. IL Rain fed
Water use in different energy sectors can to its source. Water consumption in cooling L
O 10
vary greatly depending on local water towers the source of the columns of Best available technologies including N
A G 1 100
reuse, recycling and replacement of I O IN
availability, regulations and technological water vapour associated with power N
T IN 10,000
fresh water could drastically reduce VE M

LE
L
choices. Where water scarcity is an issue, stations can be reduced by alternatively N A

A
water use. CO CO S

SH
0 1,000
A Shale
technology can help reduce demand for using once-through cooling. However, with m 3/TJ G

IL
Gas

O
fresh water. its requirement for larger amounts of water Fossilgasfuels
On average, natural is by far g Conventional
to be withdrawn from and returned to its production
the most water-efficient fossil fuel.
f in
in Gas 100,000
The proportion of fresh water withdrawn For biofuels, the extent to which a crop re n Irrigated
source, the use of once-through cooling il io
for fossil-fuel extraction is less than 0.5% is irrigated is a key factor in freshwater O v at 10,000
may be precluded by constraints on water l ti
consumption; however, economics cu

n
of total freshwater withdrawals worldwide.

t io
e
availability or regulation. usually limit irrigation. an n

va
io
This can be reduced further through rc

l ti
rs

cu
a ve
ug Rain fed

s
technologies that allow reuse, recycling There are also important trade-offs between n Irrigated Oil refining

op
In thermal power generation, the S co 10

cr
or replacement of fresh water by lower water, energy and emissions. For example, choice of cooling technology affects 1 els 100 100,000 and biofuels
OIL

c
si
fu
-

lo
quality water. in China the expansion of inland nuclear freshwater use more than the fuel - to

lu
el
s COAL
choice. Also, important differences as

oc
power plants will reduce emissions, Once-through saline cooling

gn
In thermal power generation which and trade-offs exist between water 0 om 1,000
Bi

Li
but may increase freshwater demand. consumption and water withdrawal. m /TJ 3 10 GAS
withdraws more than 20 times the fresh 1 100
Unintended consequences can also occur
water used in fossil-fuel extraction the IN
G
c o n s u mp t i o n
BIOENERGY
with the expansion of air-cooled condensers N
choice of cooling technology affects water FI L Irrigated
(dry cooling) for thermal power generation. RE N 0O
1,000
10,000
NUCLEAR
use more than the fuel choice. Improved O
IL A 3
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While reducing water requirements, this ET
con

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technology also reduces the average ar N consumpt

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io
fresh water with alternatives are examples E le IO ion

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efficiency of power generation, leading to A N ER al
of methods that can reduce water use in Oil Refining RC

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higher fuel consumption and emissions, as A i

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N

wi
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the power sector. However, they can cost and Biofuels CO

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well as increased capital costs.

as
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aw

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their adoption. In analyzing options it is generation

N
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LI
important to distinguish carefully between (withdrawal and
Once through saline cooling
water withdrawal and water consumption 100,000 consumption)
Source: Water in the energy
and to consider the trade-offs between industry An introduction. 10
1 Once-through
the two. Most water withdrawn in power 100
fresh cooling
c o n s um
p tio
n
0 1,000
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BP Technology Outlook 3.0 Natural resource constraints 31

How far can we travel on biofuels?


An assessment of the annual distance that can be travelled today by a typical
US family car using biomass from one hectare of land. Also shown is the
share of the worlds current agricultural land that would be required to meet
the global road transport energy demand today using exclusively biofuels
(based on current world weighted average annual yields and greatest
recorded yields).

Share of current worlds A large bioenergy industry could increase average


agricultural land food prices by only 3% by 2050.

km
33% 17,000
Corn
17% 33,000 Bioenergy and land use to fuels will be necessary. Careful selection efficiency improvements in fuel conversion
Biomass supplies 10% of todays global of land, crop management, technologies and food production will mitigate
primary energy, mostly for traditional and uses are all required. The choice of competition with food for land.
12% 49,000 small-scale heating and cooking. It is crop must balance high yield with low
Research at the MIT also shows that a
Sugar cane often seen as part of a lower-carbon inputs, low impact on the environment and
large bioenergy system does not
7% 84,000 future, mainly because of the potential net positive climate impact, together with
necessarily imply a decrease in natural
for biofuels in transport and biomass in understanding of how to grow the crop
forests, providing these are protected with
power. Agricultural land is a finite resource over large acreage.
dedicated land-use policies, including a
however, and different bioenergy crops
23% 25,000 Because of its high yield, sugar cane price on land carbon.
require water and fertilizers in varying
Switch grass ethanol is already a competitive transport
amounts. Understanding how land can be
14% 40,000 fuel in some regions and, in the longer
best used to meet energy needs, while
term, LC ethanol from crops such as
minimizing the impact on other natural
miscanthus or switchgrass could be a cost-
resources, requires consideration of the
and carbon-competitive fuel in many parts
10% 57,000 many different ways to optimize crop
of the world.
Miscanthus production for food, feed and fuel.
5% 122,000 The use of biomass for energy has proved
Our research shows that production of
a contentious issue, with differing
150200 exajoules (EJ) of primary energy
perspectives in different parts of the world
per year which is comparable in size to
about land use, accompanied by concerns
16% 46,000 todays oil sector from biomass could
about food availability. Research at the
Oil palm be sustainably achieved by 2050. This
Massachusetts Institute of Technology
10% 75,000 would represent a significant energy
(MIT), supported by BP, has shown that
source and a substantial increase from the
the impact of a large bioenergy industry
current biomass utilization of about 50EJ
worldwide on food prices would be
per year (EJ/yr). To realize this potential,
100% 7,000 relatively modest: a 150EJ/yr bioenergy
the productivity of crops would have to
Soy bean sector in 2050 would result in an average
World average yield increase, through advances in agricultural
80% 9,000 food price increase of approximately 3%
Best yield techniques. Alongside this, improvements
compared with business as usual. This is
in the processes used to convert biomass
because technology, crop choices and
Sources: Biomass in the energy industry An introduction.
FAO Statistics. IEA Energy Technology Perspectives 2015.
BP Technology Outlook 3.0 Natural resource constraints | External perspective 32

Professor Zheng Li
Director, Tsinghua BP Clean Energy Research
and Education Center, Tsinghua University (Beijing, China)

External perspective

Energy technology
choices to reduce demand
on natural resources Although energy production and
consumption are closely linked to natural
resources consumption, technology
The third way is the optimization of the entire supply
chain. Taking the coal-power supply chain as an example,
trade-offs exist between water consumption in upstream
coal washing and downstream power generation.
innovation could play an important role Increasing the amount of water being used for coal
in reducing demand in three ways. washing may actually result in less water used during
power generation. This is because washed coal, with
The first way is to improve technology incrementally, less ash, sulphur and heavy metals:
either with higher energy efficiency or with less natural- Increases combustion efficiency thereby decreasing
resource consumption per unit of energy or service. specific water consumption per kWh produced.
An example is replacing coal-fired subcritical steam power Reduces electricity demand for railways, which have
plants with ultra-supercritical ones. This increases the to carry less weight of coal.
net power generation efficiency from about 38% to Reduces the parasitic electric load from flue gas
about 4445% and consequently decreases cooling desulphurization (a process that also requires water).
water consumption.
Because of these benefits, coal washing, a technology
The second way is to develop alternative technologies that previously did not get enough attention, is bound
that consume fewer natural resources. One example to be applied more and more.
is replacing coal-fired power generation with wind.
The advantages are significant: using wind instead of In practice, the three ways above should be pursued
coal reduces air pollution, carbon emissions and since simultaneously to minimize natural resources
it requires no cooling during operation eliminates consumption and other environmental effects.
water consumption.

Guangxi Province,
China.
BP Technology Outlook 3.1 Emerging technologies 33

3.1 Emerging
technologies

Emerging technologies present Some technologies with the potential transportation and storage. Advances in
to enhance existing business models understanding corrosion mechanisms and
business risks and opportunities
are either ready now or on the cusp of prevention can also have widespread
for the energy industry. benefiting the energy industry. applications across other industrial sectors,
such as aerospace, marine and automotive.
While new technology breakthroughs are In the oil and gas sector, for example,
infrequent, transformational or disruptive remote sensing via satellites and Quantum technologies have the potential
change can take place sometimes within unmanned aerial vehicles are already to process huge data sets at faster rates
relatively short time scales and with undertaking surface mapping, contaminant than todays silicon-based, digital computers
dramatic consequences. In these cases, characterization, inspection and spill can. They use electrons or even polarized
breakthroughs often come when tools, detection. Technologies applicable to light that can be interlinked to perform many
techniques or approaches in one sector oilwater separation, crude oil desalters or operations at once, greatly increasing
are applied in another. Advances also water/organic-chemical processors are computation speeds. While currently at an
happen when a known technology reaches also advancing, and are likely to have a early stage of development, quantum and
an economic tipping point as a result of positive impact on existing refining and nano technologies have been identified as
multiple incremental innovations. processing activities. having significant potential.
The pace of innovation and development Developments in new materials
Emerging technologies is increasing. This is being facilitated by technologies, such as lightweight
in oil recovery, digital, diverse institutions working together on construction materials, coatings and
energy storage (such as large-scale and long-term initiatives in membranes, have great potential to
batteries) and solar collaborative partnerships. Developments improve many parts of the energy value
photovoltaics have the may involve private companies, universities, chain. For instance, corrosion-inhibiting
greatest potential to While new technology research institutes, specialist consultancies coatings can improve uptime and reliability
transform the way we breakthroughs are and funding bodies all working together. in oil and gas production as well as further
produce, supply and infrequent, transformational downstream in refining, petrochemicals
use energy. change can take place
manufacture, lubricants blending, product
often within relatively short
time scales and with
dramatic consequences.
BP Technology Outlook 3.1 Emerging technologies 34

Emerging technologies
Time range from commercialization to significant impact.

2050
Emerging technologies in oil recovery, digital, energy
storage (such as batteries) and solar PV have the
Hydrogen greatest potential to transform the way we produce,
infrastructure supply and use energy.
and storage
Widespread Beyond silicon
availability of hydrogen computing
for the consumer
Ultra-fast, high-efficiency
computing utilizing next-
generation materials
and approaches
Data analytics
Creating value from Digitization Energy storage: battery technology advances
vast data sets
Exponential increases in the power and speed of Batteries for vehicles and electricity-grid applications,
computers and the accompanying decrease in costs are such as energy storage technologies, have significant
having a huge impact on the energy business and have the potential to influence future fossil-fuel demand in the transport
Better batteries potential to do much more. sector and enable greater penetration of intermittent renewable
Automation 2015
for vehicles
via robotics energy.
Enhancing the growth Data analytics, visualization tools and computational techniques
Enabling safe and of vehicle electrification
reliable operations are addressing long-standing challenges when operating Battery technologies for transportation are improving to meet
and reducing emissions
in hostile natural environments in the upstream oil and gas performance demands. Particular progress is being made on
business, including understanding the subsurface, tackling battery reliability, costs, safety and capacity for enhanced range.
3D printing hydrate formation and maintaining facility reliability. For These developments are having an impact on the forecast
Bespoke custom example, intelligent data analysis is guiding exploration teams production of electric vehicles.
components in high- on where to drill and improving their understanding of reservoir
value applications Next-generation batteries, such as rechargeable lithium sulphur
Solar conversion depletion. This is also enabling the development of better
batteries, are expected to increase energy capacity threefold
Breaking through the
strategies for enhanced oil recovery.
by 2025 from 150Wh/kg to 450Wh/kg and to reduce vehicle
30%-efficiency barrier Fuel cells In fuels and lubricants, molecular-level models can determine weight and cost. Next-generation batteries could be established
using low-cost Modular approach
fabrication methods if certain types of molecule can reduce friction in engines. in the electric vehicle market by 202530. The continued
to power generation
and biotechnology development of these technologies is supported by regulatory
In chemicals, molecular modelling is driving improvements
to drive agriculture pressures for greater fuel economy and lower tailpipe emissions
in catalysis.
per kilometre driven, which makes their contribution to better
In biofuels, the scale and speed of data analysis, such as the urban air quality a particular advantage. Consumer demand is
pioneering work on gene sequencing, is helping to drive also likely to increase.
Timeline understanding of the microorganisms that increase yield and
deliver better products.
2050
2040 In the power sector, data analytics will lead to improved
2030 infrastructure management and operational efficiency.
2020
2015
Examples include the emergence of smart grid systems
to maximize the uptime of generating assets and improve
reliability for the customer.

Source: BP.
BP Technology Outlook 3.1 Emerging technologies 35

High-temperature solid
oxide fuel cells.

Technician with a 16kW


fibre laser coupled to
a six-axis Kuka robot
in the Manufacturing
Technology Research
Laboratory at the
University of Manchester,
part of the new BP
International Centre
for Advanced Materials.

Other emerging technologies could radically


transform existing markets. In the energy Modular power generation: fuel cells
sector, these include alternative forms of The development of fuel cells and associated hydrogen infrastructure will
transportation, energy infrastructure and significantly affect future fuel demand. Fuel-cell vehicles typically have a potential
storage each of which could significantly range of 400500km, which would alleviate the range anxiety inherent with todays
disrupt existing paradigms. battery-powered electric vehicles. However, fuel-cell vehicles have to overcome
significant hurdles of cost and low levels of hydrogen availability for consumers before
In transportation, advances in batteries mass adoption can occur. The introduction of fuel cells in the utility sector has the
for vehicles and fuel-cell vehicles are potential to enable establishment of a more distributed power generation network.
potential disruptors. In the power sector,
In some markets, tax credits and subsidies are supporting the growth of consumer
the continued development of cost-
hydrogen infrastructure, which will be essential for fuel-cell vehicle market penetration.
effective energy storage (for intermittent
For example, plans are being made for networks of hydrogen fuelling stations in Japan
energy management) and next-generation and the US and, in both markets, automobile manufacturers have plans for launching
solar could have a significant impact on fuel-cell vehicles.
future power supplies and could lead to a
reduction in dependence on fossil fuels.
Technology crossover from other fields
such as information technology will
continue to have an impact on how the
energy industry operates. Advances in bio-
engineering can bring benefit to biofuels
and EOR. In addition, biotechnology itself
has significant potential to continue to
deliver improvements in agriculture, which
Advanced materials in turn would provide more biomass at
will function at
higher pressures and
lower cost. Advanced nuclear power, as a
temperatures than source of lower-carbon energy, could also
ever before. be a future disruptor in the power sector.
Technology Experience,
London, July 2012.
BP Technology Outlook 3.1 Emerging technologies | External perspective 36

Dr Steven Griffiths
VP for Research and Associate Provost,
Masdar Institute of Science and Technology (Abu Dhabi, UAE)

External perspective The future energy landscape will be shaped mitigate the need for new transmission and distribution

Future energy
infrastructure and to provide demand management
by a significant growth in energy demand and ancillary grid services. Widespread adoption of
and a shift towards energy supply from advanced grid storage technologies must meet safety and
unconventional and renewable resources. performance requirements while being cost competitive.

landscapes
Solar photovoltaics (PV), stationary energy Performance requirements include the ability to ramp to
full power in minutes, sustain full power for hours, cycle
storage and methane hydrate recovery between charging and discharging with high efficiency
represent three emerging and disruptive and operate for thousands of cycles. The development
areas of innovation within this new and/or demonstration of novel technologies, such as flow
supply paradigm. batteries, molten-salt batteries and compressed air
storage, are still required. In the near term, energy
Solar energy is our most abundant natural resource, storage technologies available now, such as lithium
with tremendous potential to transform the energy batteries, will increasingly be deployed for off-grid and
landscape. PV technologies have grown particularly local distribution systems, setting the stage for the
rapidly in recent years, as maturation of wafer and uptake of large-scale grid storage.
thin-film PV manufacturing has dramatically reduced PV
module costs and government incentives have further Methane (or gas) hydrates represent an enormous
stimulated market demand. The global urbanization recoverable resource at least of the order of shale gas.
megatrend and growing scarcity of available land in Gas hydrate resources are global and Asian economies
high population areas necessitates that PV increasingly that are heavily dependent on imported energy are
integrates with the built environment, with easy making gas hydrate recovery a strategic imperative.
installation and low maintenance requirements. To drive By 2050 gas hydrate recovery may account for 5% or
greater penetration of solar power into electricity supply, more of all global gas production, if public and private
industry players must focus on reducing the costs of sector initiatives develop safe and cost-effective
installation, overheads, financing and power electronics. extraction technologies based on depressurization,
They will also need to achieve smooth electricity grid thermal stimulation and chemical or gas injection.
integration through energy storage or other means of Each emerging technology domain described requires
mitigating solar intermittency. Longer-term challenges industry to develop and demonstrate state-of-the-art
involve increasing cell and module efficiencies, reducing technologies and then optimize supply chains and
materials use and reducing manufacturing complexity manufacturing capabilities for commercialization.
and costs. Industry leadership will catalyse markets ready to adopt
Stationary energy storage for electricity-grid services the new generations of technology that will inevitably
is disruptive in its capacity to support the integration of follow from further advances in biological, material and
renewable energy sources with the electricity grid, to geological sciences.

Solar PV farm, France


BP Technology Outlook 4.0 Conclusions and implications 37

lo w
er-
ca
4.0 Conclusions
rb
on and implications

en
er
gy
fut
ure
The long-term trends The key metrics that will show how So what technologies will be the most
these trends evolve are the amount of important as this journey unfolds? In the
discussed in this publication
energy used and the level of GHG short term, we can expect a continued
depict an energy sector emissions. Both are influenced by a series emphasis on technologies, such as seismic
of increasing diversity and of factors. Energy supply and demand are imaging and EOR, to find and produce
complexity. New resources governed by factors such as economic and fossil fuels as cost effectively as possible
demographic growth and the capacity of while also continuing to enhance and
are becoming available, led by
technology to produce resources cost reduce costs of lower-carbon energy. In the
shale oil and gas. Energy prices effectively. Emission levels are influenced medium to longer term we expect to see
have returned to their traditional by policy and regulation, for example, by technology enable lower-carbon energy to
pattern of volatility. Policies and the pricing of carbon through taxation or mature and become deployed at increasing
emissions trading, by subsidies and quotas scale while the remaining hydrocarbons are
regulations on environmental
for renewable energy, and by regulations used even more efficiently.
issues vary from country to such as building standards and tailpipe
In the early stages of the journey ahead, there
country and may develop in emission limits for cars.
will be a continuing need to discover more
different ways. At first glance, the idea of using more fossil-fuel resources as existing fields are
energy with less environmental impact depleted. Technology is also transforming oil
Within this complex and uncertain picture, seems contradictory. Over time, however, field recovery rates. No longer is it routinely
two trends that will have a bearing on the it can be achieved: firstly, by using energy expected that around two thirds of the oil in a
entire framework are clear. Firstly, we more efficiently and thus limiting the given field will remain underground. Recovery
will need to deliver more energy to more total volume consumed and, secondly, by rates well in excess of 50% are now in
people at lower cost. Secondly, the switching the energy that is used towards prospect thanks to EOR technologies.
Technology options growth in energy demand needs to be
exist to reduce lower-carbon forms of fuel and power.
greenhouse gas met while reducing GHG emissions and This includes replacing coal with gas in
emissions sharply but making a transition to a lower-carbon power stations, using CCS at power
the transition to a energy system. plants and other facilities, and using more
lower-carbon world
The world will renewable and nuclear energy.
requires political will
need more energy and readiness to pay.
provided securely,
affordably and
sustainably.
BP Technology Outlook 4.0 Conclusions and implications 38

Technology will give greater choice in how we meet future energy demand
securely, affordably and sustainably.

These new technologies that enhance oil In the power sector, the substitution of still coming from fossil fuels, led by gas,
and gas recovery from already discovered lower-carbon natural gas for coal can make the cleanest fossil fuel. We can expect
fields will be at least as important as those a significant contribution to reducing carbon technology to help us use fossil fuels much
that help explorers find new ones. emissions, supplemented by renewable more efficiently and sparingly, while it also
technologies such as wind and solar PV underpins commercially viable lower-
At the same time, in periods when oil and
accounting for a higher share of generation. carbon energy renewables, nuclear
gas prices are low and operators are
In transport, we expect vehicles to remain and CCS.
seeking efficiencies, technologies that
fuelled mainly by oil-based liquid fuels and,
reduce costs of finding, producing and Within an environment that supports
to a lesser extent, biofuels. We expect
processing energy resources will be prized innovation and encourages the private
engines and vehicles to become lighter,
putting greater emphasis on the need sector to invest, energy companies have
more efficient and smarter, complemented
for effective research and development in a vital role to play in responding to the
by advanced, increasingly efficient
areas such as digital technologies and challenges ahead by developing and
lubricants and fuels.
advanced materials. deploying the innovative technological and
In the medium to long term, we can expect commercial solutions that meet societys
Such developments in the conventional
progressive decarbonization in the transport needs and aspirations.
energy system are expected to be
sector with a greater move toward hybrid
augmented by the progressive development The future is uncertain, but we know that
and electric passenger cars. Liquid fuels
of lower-carbon technologies, with technology will help provide the energy the
will be much more difficult to displace from
government support. As and when world needs, and the means to use it more
commercial transport such as shipping,
governments act to constrain or mitigate efficiently, with lower GHG emissions.
trucks and aircraft, however, due to their
emissions more strongly, we can expect Most of all, technology will give greater
high energy density.
a greater drive to invest in research, choice in how we meet future energy
development and deployment of lower- The IEA has developed a scenario for demand safely, securely, affordably
carbon technologies, including those that a world in which the global mean surface and sustainably.
are nascent, such as CCS. Technologies temperature rise on pre-industrial times
that increase energy efficiency will become is limited to 2C widely seen as the
increasingly important as they help reduce threshold to avoid significant climate change.
energy costs and limit CO2 emissions a In that scenario, the world uses a lot less
Technology will help
winwin outcome. energy than in business-as-usual provide the energy the
projections, but with around half in 2050 world needs.
BP Technology Outlook Our approach 39

Our approach

In BP Technology Outlook we This publication includes selected highlights Our research covered eight geographic In assessing the primary energy resource For each technology we developed a view on
from our research into the potential future regions that resulted in 30,000 possible base, we covered a spectrum of fossil fuels, capital, fixed and variable costs, along with
provide a perspective on future impact of technology across the energy routes or value chains, extending from the fissile material (nuclear) and renewable projections relating to efficiency and carbon
system, from the availability of energy harvesting of primary energy resources to resources. We considered the performance emissions. We included sensitivity analysis,
trends in technology and their resources through to their conversion and their conversion into products and to their and costs of the technologies used to gain which assessed the impact of carbon
potential impact on the energy eventual end use. We focus on developments consumption. At each stage of the value access to resources and projected how they emission policy (in the form of a carbon price).
in primary energy resources, oil and gas chain, we considered various options for how might evolve to 2050. We gave particular Policy measures of this type serve to increase
system, using insights from our extraction, power generation, transport fuels each energy source or product might be consideration to the potential for improvement the full life-cycle cost of any value chain that is
research. This analysis, carried and vehicles. transported. For instance, natural gas can be in two metrics: our ability to recover more dependent on fossil fuels at any point.
transported by pipeline, shipped as LNG or energy more efficiently and the scope to
out with our external research We provide an industry-wide assessment of converted to electricity and transported as reduce access costs. The climate perspectives have been informed
what is technically possible and while it is in addition to internal research and reputable
partners since 2012 and building impossible to predict with any certainty what
gas-by-wire.
For oil and gas, we assessed 22 different sources such as the IPCC and the IEA by
on similar assessments in 2005 is likely to occur, it sets out a vision of the Technology underpins each element of every resource classes spanning conventional and the Carbon Mitigation Initiative, a 15-year
way technology may shape the energy chain and the way in which technology unconventional types located in onshore and partnership between BP and Princeton
and 2009, describes what landscape over the next 35 years. We draw on develops will shape how we think about offshore environments. With some resource University with the goal of finding solutions
BPs view of the global energy system energy and use it in the future. Consequently, classes such as methane hydrates and to the carbon and climate challenge. Our
lessons can be learnt from as reflected in BP Energy Outlook 2035 and each value chain has a unique set of offshore unconventionals excluded, assessment of the relationships between
technology evolution and how BP Statistical Review of World Energy 2015. technologies, costs, efficiencies and the assessment can be considered to be natural resources and the supply and use
Both these publications have become standard sustainability implications that influence the conservative. For renewable energy, of energy, including how technologies can
these might shape our future references for those with an interest in the choices we make. the accessible resources for solar, wind, mitigate the potential effect of resource
energy choices. energy industry.
We developed a view of how each element
geothermal, biomass, hydro and marine scarcity, builds on the Energy Sustainability
were also evaluated by region, alongside Challenge. This is a BP-funded global
Todays global energy system is already might evolve to 2050, drawing on expert coal and nuclear. multidisciplinary research programme
complex, and projecting the direction in which opinion, historical trends and third-party established in 2010, involving 15 leading
it might evolve to 2050 is bound to involve and benchmarks. To ensure a clear focus on For value-chain modelling, we adopted a universities around the world.
introduce uncertainties. The absolute figures in technology, we excluded the impact of techno-economic approach to determine
this publication, therefore, are less important above-ground factors such as government cost-effective pathways for creating products
than relative comparisons and the long-term policy, incentives and subsidies. Our research from primary energy fossil and renewable
trends they might imply. comprised two major components: analysis of resources and for delivering end use services
the worlds primary energy resource base and such as mobility in transportation and heating
These trends include probable and possible comprehensive value-chain modelling. in buildings. To complete the full value-chain
changes in resource availability, conversion assessment, we also modelled mid-stream
and end use, and the implications these could We complemented these elements by elements such as electricity generation,
have for decision makers in government, analyzing emerging and disruptive technologies refining and petrochemicals. Views on how
business and society. and assessing the role of technologies to technology might progress took account of
address climate change and constraints on anticipated learning-curve effects, extending
natural resources such as fresh water, land from the level of a technologys current
and minerals. maturity and projecting to 2050. This required
us to develop a view on likely demand and
deployment rates. For example, we deemed
that onshore wind and PV technologies would
continue on the pathway of rapid growth
based on trends in recent years.
BP Technology Outlook Glossary 40

Glossary
Blendwall: Most gasoline vehicle drivetrains Depolymerization (of biomass): pretreatment Gas-to-liquids (GTL): process of chemically Levelized cost of electricity (LCOE): method
3D printing Gas Photovoltaics (PV)
on the road in the US today and many gasoline process (sometimes using enzymes) that converting natural gas into liquid fuels via a to calculate the fully built-up cost of electricity
storage and dispensing systems are designed to breaks polymeric biomolecules such as syngas intermediate. There are several different from a generating asset in its lifetime. Key inputs
Automotive Greenhouse gas (GHG) Refining handle gasoline blends which contain no more cellulose, hemicellulose or starch into their types, including FischerTropsch and MTG to calculating LCOE include capital costs, fuel
than 10% ethanol. As a result, 10% ethanol monomers,which are typically simple sugars. technology both of which have been operated costs, electrical efficiency, fixed and variable
represents a maximum practical level for gasoline commercially. operations and maintenance costs, depreciation
Automation via robotics Gas-to-liquids (GTL) Renewables
blends, and has been described as the ethanol Desalting: washing process to remove the salt and an assumed utilization rate for each plant type.
blendwall. impurities usually present in crude oil. Greenhouse gas (GHG): gas that contributes to
Appliances Geothermal Seismic imaging the Earths greenhouse effect (a phenomenon in Lignocellulosic (LC) ethanol: biofuel produced
Biomass-to-liquids (BTL): process of chemically Digital technologies: term used to describe which the atmosphere traps radiation emitted by from wood, grasses or the inedible parts of
converting woody biomass into liquid fuels via the use of digital resources to effectively find, the sun) by absorbing infrared radiation. Carbon plants. The name derives from the primary
Batteries Hybrid Solar a syngas intermediate. In principle, this could analyse, create, communicate and use dioxide and methane are examples of GHGs. components of this type of biomass: lignin,
involve FischerTropsch or MTG technology, but information in a digital context. cellulose and hemicellulose.
as yet BTL is not commercial. Horizontal and directional drilling: method
Biofuels Hydraulic fracturing Sugar cane Direct fuel injection: engine where fuel is of drilling non-vertical wells. For oil and gas, it Methanol-to-gasoline (MTG): process for
Carbon capture and storage (CCS): process delivered directly into the cylinder rather than the delivers a number of benefits, including exposing converting syngas into methanol, then methanol
whereby CO 2 is collected from industrial intake port or pre-chamber of traditional gasoline greater sections of a reservoir, enabling access into liquid hydrocarbons, mainly suitable for
Biomass-to-liquids (BTL) Hydro Shale gas
exhaust streams and injected into underground and diesel engines, respectively. The technology where vertical wells are difficult or not possible, gasoline engines.
storage sites. is normally applied to improve efficiency, both allowing multiple wellheads to be grouped
Combined-cycle gas turbine (CCGT) Hydrogen storage Tight oil directly via combustion improvements and as a together at a single location and creating less Offshore facilities: basket of technologies such
Carbon price/tax: financial cost applied by key technology in enabling engine downsizing. surface area disturbance. In conjunction with as compliant towers, tension-leg platforms,
governments to emissions of carbon dioxide or hydraulic fracturing, it is used extensively in spars, subsea systems, floating production
Carbon capture and storage (CCS) Imaging Transmission
other greenhouse gases (e.g. methane) in units Drilling, well construction and completions: systems, and floating production, storage and
process of creating an oil or gas well by drilling accessing unconventional shale and tight oil and
of carbon-dioxide equivalence. The price can be gas formations. offloading systems used in offshore oil and gas
set directly, as a carbon tax on emissions. It can into the Earths surface and through rock production and enabling access to increasingly
Coal Land Unconventional gas
also be established indirectly, by requiring formations, often to depths of more than 4,000 Hybrid vehicle: utilizes more than one form of deeper waters.
emitters to obtain emission permits, which are metres, casing the wellbore, ensuring structural propulsion system (prime mover) to power the
Corn ethanol Lignocellulosic (LC) ethanol Wells
issued by the government in limited numbers to integrity, installing barriers to prevent leaks and vehicle motion. The most common application of Originally in place (oil and gas): total volume
place an overall cap on emissions, and which creating a flow path to enable oil or gas to flow this approach is in hybrid electric vehicles, which of oil or gas estimated to be in a reservoir,
can then be bought and traded in a carbon into the well bore and to the surface. combine an internal combustion (IC) engine and regardless of whether deemed recoverable or
D Diesel Liquid fuel Water
market. The carbon price should ideally reflect Engine downsizing: use of a smaller engine in a fuel tank with one or more electric motors and not, before the production starts.
the cost of the environmental damage caused a vehicle that provides equivalent performance a battery pack. The hybrid system can improve
Directional drilling Lubricants
by GHGs, and it provide a clear economic vehicle efficiency by allowing the IC engine to Power plant cooling: systems to exchange the
of a larger engine normally for the purpose heat from the steam condensers commonly used
incentive for potential emitters to emit less, of improving vehicle fuel efficiency. This is operate more optimally and by recovering energy
Digital Materials either by stopping or reducing an emitting to the battery during braking. Plug-in hybrid in thermal power generation plants. The main
commonly achieved by applying turbocharging types include: wet-tower cooling, a closed-loop
activity or finding a way to perform the activity and direct fuel-injection technology. vehicles are able to store and use energy that
more efficiently. has been generated by an external source. system in which water is cooled by atomization
Enhanced oil recovery (EOR) Marine Fermentation: biological process where into a stream of air, and heat is lost through
Coal washing: process in the preparation of micro organisms such as yeast or bacteria Hydraulic fracturing: fracturing of rock using evaporation; once-through cooling, an open-loop
Electric car Nuclear
coal feedstock that improves its quality by convert simple sugars into useful chemicals high-pressure fluid consisting of water, sand and system in which heat in the steam condenser
removing impurities. such as ethanol. chemicals. Small grains of hydraulic fracturing is removed using a stream from large surface-
proppants, usually either sand or aluminium water sources such as lakes, major rivers or the
Energy storage Offshore wind Combined-cycle gas turbine (CCGT): FischerTropsch (FT): process for converting oxide, hold the fractures open allowing oil and ocean; dry cooling, which works in a similar way
form of highly efficient energy generation syngas into liquid hydrocarbons, mainly suitable gas to flow. as engines are cooled in cars, by passing large
technology that combines a gas-fired turbine for diesel engines or gas turbines. The syngas volumes of air over a heat exchanger and using
Floating facilites Onshore wind with a steam turbine. Improved and enhanced oil recovery
may be derived from natural gas, coal, residual no water.
oils or biomass. (IOR/EOR): range of techniques used to
Data analytics: method of examining raw data increase the natural volume of resources Predictive technology: tools capable of
Fuel cells Oil with the purpose of creating information to recoverable from an oil or gas field. They often discovering and analyzing patterns in data so
enable conclusions to be drawn and decisions to involve injecting water with chemical additives that past behaviour can be used to forecast
Facilities Power generation be made better and faster. Also used to verify or and/or hydrocarbon gases or CO2 into a partially likely future behaviour.
disprove existing models or theories. depleted reservoir.
BP Technology Outlook More information 41

More information
Pretreatment (of biomass): processes Technically recoverable oil and gas Energy unit conversions BP Energy Outlook 2035 Disclaimer
required to convert raw biomass such as resources: proportion of estimated original- 1 tonne oil equivalent (toe) = 7.33 barrels of oil Projections for world energy markets, This document contains forward-looking
cereals, energy crops or agricultural residues in-place volumes deemed recoverable using equivalent (boe) considering the potential evolution of the global statements, particularly those regarding
into simple sugars. current and future technology and regardless economy, population, policy and technology. technology development, global economic
of whether it is economic to do so at current 1 megawatt hour (MWh) = 3.6 gigajoule (GJ)
Proved reserves (oil and gas): generally taken Published annually. growth, population growth, energy
market prices. 1 million British thermal units (Btu) = 1.05GJ bp.com/energyoutlook consumption, policy support for renewable
to be those quantities of oil and gas that
geological and engineering information indicates Ultra-supercritical coal: power plant that energies and sources of energy supply.
1 tonne oil equivalent on a calorific basis = BP Statistical Review of World Energy Forward-looking statements involve risks and
with reasonable certainty can be recovered in operates at temperatures and pressures above heat units An objective review of key global energy
the future from known reservoirs under existing the critical point of water, at which point there uncertainties because they relate to events,
trends. Published annually. and depend on circumstances that will or may
economic and operating conditions. is no difference between water vapour and
bp.com/statisticalreview occur in the future. Actual outcomes may differ
liquid water. These power plants deliver higher
Remote sensing: acquisition of information efficiency and lower emissions than subcritical depending on a variety of factors, including
about an object or phenomenon without making Energy Sustainability Challenge
coal plants. solid fuels BP-funded multidisciplinary research product supply, demand and pricing, political
physical contact with the object and thus in
programme involving 15 leading universities stability, general economic conditions, legal and
contrast to in situ observation. Examples Underground coal gasification (UCG):
include satellite and unmanned aerial vehicle industrial process that converts coal into product worldwide examining the relationships regulatory developments, availability of new
remote imaging. gas. UCG is an in situ gasification process between natural resources and the supply technologies, natural disasters and adverse
electricity and use of energy. Key findings have been weather conditions, wars and acts of terrorism
carried out in non-mined coal seams using
Resources (oil and gas): a generic term injection of oxidants, and bringing the product
published in a suite of handbooks on biomass, or sabotage and other factors discussed
covering primary hydrocarbon energy sources, gas to surface through production wells drilled water and materials available at elsewhere in this document.
whether original in place, or technically or from the surface. bp.com/energysustainabilitychallenge
economically recoverable. Paper
Unmanned aerial vehicles: aircraft piloted by Information about technology at This publication is printed on Mohawk PC 100
Seismic imaging: range of techniques for remote control or on-board computers. made from 100% FSC recycled certified fibre
BP can be found at
investigating and imaging the Earths sub- sourced from de-inked post-consumer waste.
surface geological characteristics. They are used Water flooding: water flooding or injection bp.com/technology
The printer and the manufacturing mill are
extensively in exploring for new sources of oil refers to the method in the oil industry where Acknowledgements both credited with ISO14001 Environmental
and gas and developing 3D- and 4D-modelling water is injected into the reservoir, usually to BP would like to thank its partners in the
increase pressure and thereby stimulate
Management Systems Standard and both are
representations of structures to enable better production of this publication: IHS Energy
reservoir development and management. production. Water flooding or injection wells can FSC certified.
and Marakon for their work, and support on
be found both on and offshore, to increase oil Design
Single-cycle gas turbines (SCGTs): most the primary energy resource, Ricardo plc and
recovery from an existing reservoir. thebigwindow.co.uk
frequently used in the power generation, aviation Baringa Partners for their support on the power
(jet engine), and oil and gas industry (electricity Water withdrawal: water removed from and transport sector analysis. BP p.l.c. 2015
generation and mechanical drives). This differs surface or groundwater, at least temporarily,
from a combined-cycle operation in that it has to produce or process energy, or for some External perspectives were provided by
only one thermodynamic cycle (i.e. no provision other purpose. Water withdrawals are typically Paul Markwell and Judson Jacobs from IHS
for waste heat recovery and steam cycle). classified as either surface (from rivers, lakes or Energy, Jenny Chase from Bloomberg New
impoundments) or groundwater withdrawals. Energy Finance, Andreas Schamel from
Steam methane reforming: process in which Ford Motor Company, Professor Rob Socolow
methane from natural gas is heated, with steam, Water consumption: portion of withdrawn from Princeton University, Professor Zheng
to produce a mixture of carbon monoxide and water not returned to the surface or groundwater Li from Tsinghua University and Dr Steven
hydrogen used in organic synthesis and as a fuel. in the same drainage basin from which is was Griffiths from Masdar Institute of Science
abstracted. Consumed water is evaporated,
Syngas (synthesis gas): a mixture consisting and Technology.
transpired, incorporated into products or crops,
primarily of hydrogen and carbon monoxide, or otherwise removed.
with smaller amounts of other simple gases. It is
typically made by gasifying a carbonaceous feed Well intervention: operation carried out
such as natural gas, coal or woody biomass. on an oil or gas well to extend its producing
life by providing well diagnostics, improving
performance or providing access to stranded
or additional hydrocarbon reserves. Typical
intervention services include wireline, tractors,
coiled tubing and hydraulic workovers.
Where might energy technology take us?
As the worlds population grows and living standards improve, the demand for
energy continues to rise. Technology is a vital lever in enabling the world to meet
energy demand securely, affordably and sustainably.

This publication provides a perspective on future trends in technology and their


potential impact on the energy system. It draws on BPs research into long-term
technology potential and the factors governing its development and deployment.

BP p.l.c. 1 St Jamess Square London SW1Y 4PD


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BP p.l.c. 2015