Last month BP released their “Energy Outlook” report that says the demand for oil will peak at about 110 million barrels per day between 2035 and 2040 before plateauing for the years to come. Consumption is currently around 97 million per day.
The report also forecasts BP’s future and the rest of the energy industries future. A small portion of the report even looked at how self-driving cars are going to bring down Uber and Lyft costs by 50%.
Even though BP is a giant in the gas and oil industry their report predicts that global oil consumption will likely peak by the late 2030’s, and gives possible reasons why this might occur. Including the rise in renewable energy, electric vehicles and increasing regulations are the core reasons for this economic shift inside the industry.
BP’s tainted history gives us another insight at a more impactful reason for an economic shift. In the spring of 2010 more than 3 million barrels of oil made its way to the beaches and the wetlands through Texas and Florida. This was a disaster for wildlife at the time and the area is still recovering today!
This was not a good time to be a representative or be a shareholder in the company that caused this environmental disaster: BP. Which today the company is one of the world’s leading integrated oil and gas companies. Despite, the environmental disaster BP’s stock didn’t drop heavily and they have continued to be a powerhouse in the oil and gas industry. In 2015 the company did end up having to pay the Department of Justice over $20.8 billion.
BP’s Energy Outlook is based on predictions from its “Evolving Transition” scenarios which reflects societal trends, technological advances, and government policies. BP predicts consumers are going to switch to electric vehicles, and by the time it’s 2040 there will be more than 300 million of them on the road compared to the 2 million today; that may seem like a lot, but the world is expected to have over 2 billion people driving on the road.
BP’s chief economist Spencer Dale talked to the Telegraph about the report, “The suggestion that rapid growth in electric cars will cause oil demand to collapse just isn’t supported by the basic numbers—even with really rapid growth.” He continued, “Even in the scenario where we see an ICE [internal combustion engines] ban and very high-efficiency standards, oil demand is still higher in 2040 than it is today.”
Despite all of this growth for wind and clean energy, the BBC also pointed out that inside the outlook BP expects carbon emissions to rise by 10 percent by 2040. BP points out that this is way more than what the Paris climate pledges to accomplish, but if oil consumption fell to 85 million per day by 2040 they could reach the goals of the accord.
BP recognizes that renewable energy is the fastest growing energy source, but that there is still a lot that has to be done for that section of the industry to grow.
There are a lot of interesting things in this report, especially because a company that relies on oil knows that the market is going to change, maybe this is also a beginning in the type of energies the company supplies, because if they know that the future is solar then there is a chance that they’ll begin to put some of their resources into this section of the energy industry.
What do you think about this report?