BP 2011 Annual Report Download - page 24

22 BP Annual Report and Form 20-F 2011
Long-term growth in energy demand
Energy demand is linked to economic growth, development and population.
The world’s population is projected to increase by 1.4 billion over the next
20 years, while its real income is likely to grow by 100% over the same period.
This combination of factors is expected to increase world primary energy
consumption by approximately 40% over the next 20 years, with non-OECD
energy consumption as much as 70% higher by 2030. Energy and climate
policies, efficiency gains and a long-term structural shift in fast-growing
economies away from industry towards less energy-intensive activities may act
to restrain consumption, but the overall trend is likely to be one of strong growth in
energy demand.
Oil and gas are still expected to play a significant part in meeting this
demand and we project they will represent 53% of total energy consumption
in 2030 (compared with 57% in 2010). Even under the IEA’s most challenging
climate policy scenario (450 Scenario) that might with difficulty still be achievable,
oil and gas together still makes up 49% of the energy mix in 2030, with combined
demand projected to exceed current levels.a The 450 Scenario assumes
governments adopt commitments to limit the long-term concentration of
greenhouse gases in the atmosphere to 450 parts-per-million of CO2 equivalent.
We believe the political, technological, logistical, infrastructure and cost challenges
presented by the 450 Scenario make it increasingly unlikely to occur, meaning that
demand for fossil fuels would remain at a higher level for longer.
We also expect advances in technology to lead to new and more efficient
ways to transform base hydrocarbons (including natural gas and coal) into usable
forms of energy, petrochemicals and lubricants.
Beyond 2030, we believe it is currently very difficult to provide meaningful
projections. We expect that growing population and per-capita incomes will
continue to drive growing demand for the services that energy provides –
including mobility, heat and light. The way those services are provided will be
shaped by future technology developments, changes in tastes, and future policy
choices – all of which are inherently uncertain. Concerns about affordability,
energy security and environmental impacts – in particular climate change – are all
likely to be important considerations for the future. These factors may accelerate
the trend towards more diverse sources of energy supply, a lower average
carbon footprint, increased efficiency of energy provision and use, and demand
management.
We actively monitor developments and continually assess a range of
potential outcomes and their implications for our long-term strategy.
a From World Energy Outlook 2011©, OECD/IEA 2011, page 545.
Our market: Longer-term outlook
The long-term outlook is one of growing demand
for energy and increasing challenges for our
industry in meeting the world’s needs.
The facts and figures used
in our longer-term outlook
commentary in this section
are derived from BP Energy
Outlook 2030, published in
January 2012, unless otherwise
indicated, and represent a ‘base
case’ or most likely projection.
2
4
6
8
10
1970 1990 2010 2030
Population
(billion)
Rest of World
India
China
Source: BP Energy Outlook 2030.
5
10
15
20
1970 1990 2010 2030
Energy
(billion tonnes of oil equivalent)
Rest of World
India
China
Source: BP Energy Outlook 2030.