Page 6 - AsiaElec Week 38

AsiaElec COMMENTARY AsiaElec

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

P6 www. NEWSBASE .com Week 38 23•September•2020