Page 4 - AfrElec Week 37

AfrElec COMMENTARY AfrElec

BP warns of peak oil demand

just around the corner

BP expects oil demand to peak in the early

2020, if it has not done so already

GLOBAL BP has warned that oil demand will peak within reaching 10% below the current level in 2050,
the next few years, reflecting growing belief that whereas the rapid and net-zero scenarios pre-
WHAT: the coronavirus (COVID-19) pandemic has dict much sharper declines of 55% and 80%
BP now expects oil brought forward the decline of fossil fuels. respectively. These declines will be driven by
demand to peak in the The oil and gas major published its Energy increasing efficiency and the electrification of
early 2020s, if it has not Outlook 2020 on September 14, outlining three road transport.
done so already. scenarios for global energy demand. The first, Carbon prices will also play a key role. The
business-as-usual, assumes that trends in gov- business-as-usual case assumes they will reach
WHY: ernment policies, technologies and societal $65 per tonne in developed countries by 2050
Just a year ago the UK preferences continue in the way they have done and $35 per tonne in emerging economies. But
major was expecting the in the recent past. The second, rapid, assumes the net-zero case sees them soaring to as high as
milestone in the 2030s, a significant increase in carbon prices and the $250 and $175 per tonne respectively.
but the pandemic and introduction of other aggressive policies to lower Oil use in transport will peak in the mid-to-
an accelerated energy emissions. late 2020s in all three cases. Its share in the sec-
transition have changed The third and final one, net zero, assumes tor’s fuel mix will fall from 90% in 2018 to around
the picture these policies are introduced but also supported 80% by 2050 under the business-as-usual case,
by significant shifts in societal and consumer only 40% in the rapid one and just 20% under
WHAT NEXT: behaviour and preferences. This will result in net-zero assumptions.
Gas will fare better, but carbon emissions dropping by over 95% by 2050, The outlook for gas is markedly better, how-
renewables are in for in line with efforts to limit global temperature ever, supported “by broad-based demand and
rapid growth. BP itself is rises to 1.5 degrees Celsius. the increasing availability of global supplies,” BP
targeting a 40% cut in oil said.
and gas production over Oil and gas Under the business-as-usual case, BP pre-
the next decade Even in the business-as-usual case, BP expects dicts it to surge by a third over the next three
oil demand to reach plateau in the early 2020s. decades, from 3.93 trillion cubic metres last year,
Under the two other scenarios consumption will according to BP’s own estimates. Under the rapid
never again reach the pre-pandemic level of just scenario, demand will peak in the mid-2030s
above 100mn barrels per day (bpd). but will still be around the same level in 2050
The business-as-usual case sees oil demand as in 2018. But according to the net-zero case,

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