Page 6 - EurOil Week 38

EurOil COMMENTARY EurOil

BP sets out LNG’s role in

energy outlook

BP has published its Energy Outlook 2020, which sees LNG trade growing

significantly in at least the medium term in two out of three scenarios

GLOBAL LONDON-LISTED BP published its Energy Under the business-as-usual case, BP pre-
Outlook 2020 on September 14, outlining three dicts it to surge by a third over the next three
WHAT: scenarios for global energy demand. The first, decades, from 3.93 trillion cubic metres last year,
BP projects that business-as-usual, assumes that trends in gov- according to BP’s own estimates. Under the rapid
LNG trade will grow ernment policies, technologies and societal scenario, demand will peak in the mid-2030s
significantly in at least preferences continue in the way they have done but will still be around the same level in 2050
the medium term. in the recent past. The second, rapid, assumes as in 2018. But according to the net-zero case,
a significant increase in carbon prices and the demand will peak as soon as the mid-2020s and
WHY: introduction of other aggressive policies to lower drop by a third by 2050.
Even under a rapid emissions. Gas has two main roles in the energy tran-
decarbonisation The third and final one, net zero, assumes sition, BP said. First, it can displace coal in
scenario, LNG is expected these policies are introduced but also supported fast-growing, developing economies where
to be the main source by significant shifts in societal and consumer renewables cannot be deployed sufficiently
of incremental supply behaviour and preferences. This will result in quickly; second, it can be combined with car-
as developing countries carbon emissions dropping by over 95% by 2050, bon, capture and storage (CCS) to produce near
switch from coal to gas. in line with efforts to limit global temperature zero-carbon energy. The rapid and net-zero sce-
rises to 1.5 degrees Celsius. narios see gas combined with CCS accounting
WHAT NEXT: Even in the business-as-usual case, BP between 8 and 10% of primary energy in three
BP has not set out how expects oil demand to reach a plateau in the early decades’ time.
LNG would fit into its 2020s. Under the two other scenarios consump-
third, net zero, scenario, tion will never again reach the pre-pandemic LNG’s role
but it would require level of just above 100mn barrels per day (bpd). LNG has a clear role to play in the business-as-
a sharp drop in gas The outlook for gas is markedly better, how- usual and rapid scenarios. However, BP did not
consumption. ever, supported “by broad-based demand and explicitly set out how LNG would fit into the
the increasing availability of global supplies,” BP scenario where net zero emissions would be
said. achieved by 2050. But this scenario requires a

P6 www. NEWSBASE .com Week 38 24•September•2020