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BP Energy Outlook 2016 edition
Outlook
to 2035 Spencer Dale, group chief economist
© BP p.l.c. 2016
OECD
2016 Energy Outlook 2
Disclaimer
This presentation contains forward-looking statements, particularly those regarding global
economic growth, population growth, energy consumption, policy support for renewable energies
and sources of energy supply. Forward-looking statements involve risks and uncertainties because
they relate to events, and depend on circumstances, that will or may occur in the future. Actual
outcomes may differ depending on a variety of factors, including product supply, demand and
pricing; political stability; general economic conditions; legal and regulatory developments;
availability of new technologies; natural disasters and adverse weather conditions; wars and acts
of terrorism or sabotage; and other factors discussed elsewhere in this presentation. BP disclaims
any obligation to update this presentation. Neither BP p.l.c. nor any of its subsidiaries (nor their
respective officers, employees and agents) accept liability for any inaccuracies or omissions or for
any direct, indirect, special, consequential or other losses or damages of whatsoever kind in
connection to this presentation or any information contained in it.
Unless noted otherwise, data definitions are based on the BP Statistical Review of World Energy,
and historical energy data up to 2014 are consistent with the 2015 edition of the Review. Gross
Domestic Product (GDP) is expressed in terms of real Purchasing Power Parity (PPP) at 2010 prices.
© BP p.l.c. 2016
0 10 20 30
Other
India
Africa
China
OECD
Population Productivity
Contribution to GDP growth 2014-35
OECD
2016 Energy Outlook 3
Trillion, $2010
0
50
100
150
200
250
1965 2000 2035
Other
India
Africa
China
OECD
Trillion, $2010
GDP
Economic backdrop
© BP p.l.c. 2016
2016 Energy Outlook
Billion toe
Consumption by region Consumption growth by region
10 year average, % per annum
Transport
Other
Industry
-2%
0%
2%
4%
6%
8%
10%
12%
1975 1995 2015 2035
Other Asia
China
World
OECD
0
3
6
9
12
15
18
1965 2000 2035
Other
Other Asia
China
OECD
Global energy demand
4
© BP p.l.c. 2016
2016 Energy Outlook
What drives energy demand?
5
© BP p.l.c. 2016
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1965 2000 2035
China
US
World
EU
India
Africa
0
200
400
600
800
1000
1200
1965 2000 2035
GDP
Primary energy
Index (1965=100)
Global GDP and energy
2016 Energy Outlook
World GDP and energy demand Energy intensity by region
Toe per thousand $2010 GDP
6
© BP p.l.c. 2016
2016 Energy Outlook
0%
1%
2%
3%
4%
5%
1985 1995 2005 2015
% per annum, 20-year moving average
Historical growth rates
0%
1%
2%
3%
4%
5%
China World China World
Annual growth rates 2014-35
% per annum
GDP
Primary energy
Base case
GDP
Primary energy
Slower global GDP growth
7
© BP p.l.c. 2016
0
5
10
15
20
25
1965 2000 2035
Th
ou
san
ds
1965-2014
1994-2014
Base case
Flat demand
2016 Energy Outlook
World energy demand
Billion toe
Decline in world energy intensity
-4%-3%-2%-1%0%
1965-2014
1994-2014
Base case
2014-35
Flat demand
% per annum
Energy intensity and energy demand
Fastest
20-year
average
8
© BP p.l.c. 2016
2016 Energy Outlook
Q: What drives energy demand?
A: Global economic growth
9
© BP p.l.c. 2016
0%
10%
20%
30%
40%
50%
1965 2000 2035
2016 Energy Outlook
*Includes biofuels
Annual demand growth by fuel
0
50
100
150
200
250
1994-2014 2014-35
Renew.*
Hydro
Nuclear
Coal
Gas
Oil
Mtoe per annum
Shares of primary energy
Oil
Coal
Gas
Hydro
Nuclear Renewables*
Fuel mix
10
© BP p.l.c. 2016
Key factors shaping the fuel mix
2016 Energy Outlook
What have we learned about US shale?
China’s changing energy needs
Prospects for renewables and other non-fossil fuels
11
© BP p.l.c. 2016
0
2
4
6
8
2005 2015 2025 2035
2013 2014
2015 2016
Mb/d
US tight oil forecasts
0
30
60
90
2005 2015 2025 2035
US shale gas forecasts
Bcf/d
2016 Energy Outlook
Forecast year:
US tight oil and shale gas
12
© BP p.l.c. 2016
2016 Energy Outlook
Global tight oil and shale gas
Tight oil
0
1
2
3
4
5
2005-15 2015-25 2025-35
Mb/d
Ten year supply increments:
Bcf/d
0
10
20
30
40
2005-15 2015-25 2025-35
S & C America
Middle East
Europe & Eurasia
Africa
Asia Pacific
North America
Shale gas
13
© BP p.l.c. 2016
Shares of total oil/gas production
0%
10%
20%
30%
40%
2015 2020 2025 2030 2035
Shale gas
Tight oil
Market shares of tight oil and shale gas
2016 Energy Outlook 14
© BP p.l.c. 2016
Shares of total oil/gas production
0%
10%
20%
30%
40%
2015 2020 2025 2030 2035
Shale gas
Tight oil
Market shares of tight oil and shale gas
2016 Energy Outlook 15
Stronger shale case
Stronger shale case
© BP p.l.c. 2016
Key factors shaping the fuel mix
2016 Energy Outlook
What have we learned about US shale?
China’s changing energy needs
Prospects for renewables and other non-fossil fuels
16
© BP p.l.c. 2016
GDP and primary energy growth
% per annum
0%
2%
4%
6%
8%
10%
2000-14 2014-25 2025-35
GDP
Primary energy
2016 Energy Outlook
China’s changing energy needs
0%
40%
80%
1985 2010 2035
Coal
Oil
Gas
Non-fossils
Shares of primary energy
17
© BP p.l.c. 2016
Key factors shaping the fuel mix
2016 Energy Outlook
What have we learned about US shale?
China’s changing energy needs
Prospects for renewables and other non-fossil fuels
18
© BP p.l.c. 2016
Renewables in power forecasts
Mtoe
0
500
1000
1500
2010 2015 2020 2025 2030 2035
2016 2015
2014 2013
2012 2011
2016 Energy Outlook
Forecast year:
Renewables and other non-fossil fuels
19
© BP p.l.c. 2016
-400
-200
0
200
400
2015 2020 2025 2030
Renewables Hydro
Biofuels Nuclear
Total
Renewables in power forecasts
Mtoe
Revisions to non-fossil fuels
vs 2011 Outlook Mtoe
0
500
1000
1500
2010 2015 2020 2025 2030 2035
2016 2015
2014 2013
2012 2011
2016 Energy Outlook
Forecast year:
Renewables and other non-fossil fuels
20
© BP p.l.c. 2016
2016 Energy Outlook
Mb/d
80
85
90
95
100
105
110
115
2014 OECD
decline
Non-OECD
growth
2014 Non-OPEC
growth
OPEC
growth
Other
India
Mid East
China
Other
Other Asia
2035 level
Brazil
US
Demand Supply
Oil demand and supply
21
© BP p.l.c. 2016
0
10
20
30
40
50
60
70
1965 2000 2035
Transport
Industry
Other
Power
2016 Energy Outlook
Mb/d
Liquids fuel demand by sector Vehicle fleet
Billion vehicles
0
1
2
3
1965 2000 2035
Non-OECD
OECD
Oil demand
22
© BP p.l.c. 2016
Natural gas
2016 Energy Outlook
Gas production by type and region
0
125
250
375
500
1990 2005 2020 2035
Non-OECD shale
OECD shale
Non-OECD other
OECD other
Bcf/d
0%
10%
20%
30%
40%
1990 2005 2020 2035
Total trade
Pipeline
LNG
Shares of global gas consumption
23
© BP p.l.c. 2016
2016 Energy Outlook
Changing outlook for carbon emissions
24
© BP p.l.c. 2016
Carbon emissions
0%
1%
2%
3%
4%
% per annum
1994-2014 2014-35
GDP
CO2
Decline in energy
intensity
Decline in carbon
intensity
2016 Energy Outlook 25
© BP p.l.c. 2016
0
10
20
30
40
1975 1995 2015 2035
Base case
Faster transition
IEA 450
Billion tonnes CO2
Carbon emissions
2016 Energy Outlook
Outlook for carbon emissions
26
© BP p.l.c. 2016
0
10
20
30
40
1975 1995 2015 2035
Base case
Faster transition
IEA 450
Billion tonnes CO2
Carbon emissions
2016 Energy Outlook
Outlook for carbon emissions
27
-3%
-2%
-1%
0%
-3%-2%-1%0%
Changes in intensity
Energy intensity
Carbon
intensity
IEA 450
Base
case
1994-2014
% per annum
© BP p.l.c. 2016
0
10
20
30
40
1975 1995 2015 2035
Base case
Faster transition
IEA 450
-3%
-2%
-1%
0%
-3%-2%-1%0%
Changes in intensity
Energy intensity
Carbon
intensity
IEA 450
Base
case
1994-2014
Billion tonnes CO2
Carbon emissions
Faster
transition
% per annum
2016 Energy Outlook
Outlook for carbon emissions
28
© BP p.l.c. 2016
CO2
0
1
2
3
4
5
1965 2000 2035
Hydro &
Nuclear Renewables*
Billion toe
Oil
Coal Gas
Consumption by fuel
-100
-50
0
50
100
150
200
250
1994-
2014
Base
case
Faster
transition
Renew.*
Hydro
Nuclear
Coal
Gas
Oil
Total
Mtoe per annum
2014-35 *Includes biofuels
Annual demand growth by fuel
Impact of faster transition case
2016 Energy Outlook 29
© BP p.l.c. 2016
Conclusions
2016 Energy Outlook
Global demand for energy continues to rise
− to power increased levels of activity as the world
economy continues to grow
Fuel mix changes significantly
− coal losing, renewables gaining, and oil and gas
combined holding steady
Growth rate of carbon emissions slows
sharply
− but further policy changes are needed
30
BP Energy Outlook 2016 edition
Outlook
to 2035
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