By Sebastine Obasi
GLOBAL energy demand is expected to increase by around 30 percent between 2015 and 2035, an average growth of 1.3 percent yearly, driven by increasing prosperity in developing countries, partially muted by rapid gains in energy efficiency, the 2017 edition of BP Energy outlook stated.
“The global energy landscape is changing,” said Bob Dudley, BP Group Chief Executive.
Traditional centres of demand, according to the report, are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns.
“While non-fossil fuels are expected to account for half of the growth in energy supplies over the next 20 years, the outlook projects that oil and gas, together with coal, will remain the main source of energy powering the world economy, accounting for more than 75percent of total energy supply in 2035, compared with 86 percent in 2015”, it added.
According to the report, oil demand grows at an average rate of 0.7 percent yearly, although this is expected to slow gradually over the period.
The transport sector is said expected to continue to consume most of the world’s oil with its share of global demand remaining close to 60 percent in 2035.
However, non-combusted use of oil, particularly in petrochemicals, takes over as the main source of growth for oil demand by the early 2030s.
“The possibility that the most important source of growth in oil demand in the 2030s won’t be to power cars or trucks or planes, but rather used as an input into other products, such as plastics and fabrics, is quite a change from the past,” said Spencer Dale, BP’s group chief economist.
The transport sector accounts for around two thirds of the growth in oil demand. Within that sector, oil demand for cars increases by around 4 million barrels daily, underpinned by a doubling in the global car fleet. The number of electric cars is assumed to increase from1.2 million in 2015 to around 100 million in 2035, around 5 percent of the global car fleet.
The outlook constructs two illustrative scenarios to consider the impact of the broader mobility revolution affecting the car market, including autonomous cars, car sharing, and ride-pooling.
“The impact of electric cars, together with other aspects of the mobility revolution, such as self-driving cars, car sharing, and ride pooling, is one of the key uncertainties surrounding the long-term outlook for oil” said Dale. The slowing rate of oil demand growth is contrasted by the abundance of global oil resources. The outlook predicted that the abundance of oil may cause low-cost producers, such as Middle East Organisation of Petroleum Exporting Countries, Russia, and the US, to use their competitive advantage to increase their market share at the expense of higher-cost producers.