BP 2011 Annual Report Download - page 26

24 BP Annual Report and Form 20-F 2011
The dual challenges of emissions and energy security underline the value of
energy efficiency. Increases in efficiency have the potential to reduce emissions
without inhibiting economic growth, and they can help energy-importing countries
to reduce their dependency on others. For these reasons, we expect efficiency to
remain high on the agenda through to 2030.
A diverse energy mix
We believe the global energy challenge can only be met through a diverse mix of
fuels and technologies. This is why BP’s portfolio includes oil sands, shale gas,
deepwater production, and alternative energies such as biofuels and wind power,
in addition to conventional oil and gas. As well as simply meeting growth in overall
demand, a diverse mix can help to provide enhanced national and global energy
security while supporting the transition to a lower-carbon economy.
Within the energy mix, we see a key strategic role for natural gas as a lower-
carbon fuel that is increasingly secure and affordable. Used in place of coal for
power, it can reduce CO2 emissions by half.
Renewables will be essential in addressing the challenges of climate change
and energy security over the long term. Renewable energy is already the fastest-
growing fuel and is projected to grow 8.2% per annum to 2030 – a rate similar to
the emergence of nuclear power in the 1970s and 1980s. Renewable energies
are starting from a low base however, and we project that they are only likely
to meet around 6% of total energy demand by 2030. With a few exceptions,
renewables are not yet competitive with conventional power and transportation
fuels. Sufficient policy support is required to help the commercialization of
effective options and technologies, but renewables must ultimately become free
from subsidy and commercially self-sustaining. See Risk factors – climate change
and carbon pricing on page 60.
The future for hydrocarbons
Given the vital role oil will continue to play in meeting demand, substantial
investment in new technology will be required to boost recovery from declining
fields and commercialize currently inaccessible resources. The industry’s ability
to increase recovery from mature assets will be profoundly important, particularly
in the world’s giant fields. Over time, it will become increasingly difficult to reach,
extract and manage oil resources, and companies such as BP may be required
to move yet further into technically challenging areas. Greater energy intensity
could be required to extract these resources; operating costs and greenhouse gas
emissions from operations are likely to increase. Along with increasing supply, we
believe the energy industry will be required to make hydrocarbons cleaner and
more efficient to use.
Carbon capture and storage (CCS) may help to provide a path to cleaner coal
and gas, but CCS technologies still face significant technical and economic issues
and are unlikely to be in operation at scale in the near future.
Policy and access
If industry and the market are to meet the world’s growing demand for energy in
a sustainable way, governments must set a stable and enduring framework. As
part of this, governments will need to provide secure access for exploration and
development of energy resources, define mutual benefits for resource owners
and development partners, and establish and maintain an appropriate legal and
regulatory environment. Within this framework, we believe that the most effective
means of finding, producing and distributing diverse forms of energy is to foster the
use of markets that are open and competitive, and in which carbon has a price.
10
20
30
40
1990 2010 2030
Global CO2 emissions from energy
use by region
(billion tonnes CO2)
Non-OECD
OECD
Source: BP Energy Outlook 2030.
300
200
400
500
600
700
800
1970 1990 2010 2030
Global CO2 emissions from energy
use vs GDP and energy
(Index 1970 = 100)
GDP
Energy
CO2
Source: BP Energy Outlook 2030.
Our market: Longer-term outlook