The oil major’s annual outlook is widely watched for hints at the firm’s view of the energy world. Its 2017 edition, published this week, is the sixth in a row to raise forecasts for wind and solar energy. It also cuts the outlook for coal for the fourth consecutive year and gas for the third year.
Carbon Brief has produced a series of interactive charts to show how the BP Energy Outlook is slowly adapting to the global energy transition.
Energy Outlook
The BP Energy Outlook is part of an eagerly awaited annual cycle of forecasts*, along with the International Energy Agency (IEA) World Energy Outlook published each autumn. Before delving into the details of this latest offering, it’s worth pausing to consider its limitations.
Forecasting the future of energy is a huge challenge. These outlooks have repeatedly failed to anticipate major shifts, from the explosive growth of Chinese coal use in the 2000s to its recent decline, through to the emergence of US shale gas to the rise of modern renewables.
BP dubs its “base case” outlook the “most likely” scenario. Given the caveats above, however, it should probably be thought of more as a window into the slowly changing minds of BP executives, rather than as a realistic picture of future trends.
Last year, for instance, the outlook had barely changed in response to the Paris Agreement on climate change. This signaled BP’s belief that the world would fail to meet its collective climate goals, despite a first-ever global deal to tackle warming.
The 2017 outlook broadly maintains this view, with coal, oil and gas remaining the top three sources of energy through to 2035, as the chart below shows.
Despite rapid growth taking them past both hydro and nuclear, BP sees wind and solar energy still far behind fossil fuels in 2035. All low-carbon sources combined, at 3,785Mtoe in 2035, would still supply less energy than coal, oil or gas alone.
One notable shift is already visible in the chart, however. BP now expects global coal use to peak, plateau and then decline during 2025-2030. This is the culmination of repeated downgrades to coal’s growth prospects in the BP outlook, as shown below.
Note that BP still expects global coal use to increase over the next decade. This would be a turnaround from the record fall in global coal use reported in BP’s own data for 2015. Figures for 2016 are not yet available.
Changing outlooks
The 2017 BP Energy Outlook is also the first to downgrade expectations for oil demand growth. BP now says global demand will reach 4,892Mtoe in 2035, some 91Mtoe, or 2% below the 4,983Mtoe it expected last year.
It’s worth noting that this still represents an increase of 15% from 2015 levels, when demand was 4,257Mtoe. Until this year, successive outlooks since 2011 had repeatedly raised the baseline for global oil demand, though the expected rate of growth has remained relatively constant.
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