Page 11 - NorthAmOil Week 37

NorthAmOil COMMENTARY NorthAmOil

BP warns of peak oil demand

just around the corner

If more aggressive action is taken to curb emissions, peak demand may have

already passed

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

Week 37 17•September•2020 www. NEWSBASE .com P11