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BP warns of peak oil demand

just around the corner

The super-major believes that oil demand will peak in the
next few years as low-carbon energy solutions are pursued

COMMENTARY BP has warned that oil demand will peak within Oil and gas
the next few years, reflecting growing belief that Even in the business-as-usual case, BP expects
the coronavirus (COVID-19) pandemic has oil demand to reach plateau in the early 2020s.
WHAT: brought forward the decline of fossil fuels. Under the two other scenarios consumption will
BP now expects oil The oil and gas major published its Energy never again reach the pre-pandemic level of just
demand to peak in the Outlook 2020 on September 14, outlining three above 100mn barrels per day.
early 2020s, if it has not scenarios for global energy demand. The first, The business-as-usual case sees oil demand
done so already. business-as-usual, assumes that trends in gov- reaching 10% below the current level in 2050,
ernment policies, technologies and societal whereas the rapid and net-zero scenarios pre-
WHY: preferences continue in the way they have done dict much sharper declines of 55% and 80%
Just a year ago the UK in the recent past. The second, rapid, assumes respectively. These declines will be driven by
major was expecting the a significant increase in carbon prices and the increasing efficiency and the electrification of
milestone in the 2030s, introduction of other aggressive policies to lower road transport.
but the pandemic and emissions. Carbon prices will also play a key role. The
an accelerated energy The third and final one, net zero, assumes business-as-usual case assumes they will reach
transition have changed these policies are introduced but also supported $65 per tonne in developed countries by 2050
the picture. by significant shifts in societal and consumer and $35 per tonne in emerging economies. But
behaviour and preferences. This will result in the net-zero case sees them soaring to as high as
WHAT NEXT: carbon emissions dropping by over 95% by 2050, $250 and $175 per tonne respectively.
Gas will fare better, but in line with efforts to limit global temperature Oil use in transport will peak in the mid-
renewables are in for rises to 1.5 degrees Celsius. to-late 2020s in all three cases. Its share in the
rapid growth. BP itself is
targeting a 40% cut in oil
and gas production over
the next decade.

P4 www. NEWSBASE .com Week 37 17•September•2020