Page 7 - AsiaElec Week 38

AsiaElec COMMENTARY AsiaElec

displaced carbon from the process is captured Under the rapid scenario, BP projects that
and stored. LNG trade will bounce back strongly from the
But while BP itself is targeting net zero emis- impact of coronavirus (COVID-19), more than
sions from its operations by 2050, the net zero doubling over the first half of the outlook from
scenario in its outlook requires a co-ordinated 425bn cubic metres in 2018 to around 1.1 tcm by
global effort, significant investment and high the mid-2030s. Thereafter LNG trade is antici-
carbon prices, as well as meaningful changes pated to decline, falling to around 970 bcm by
to societal behaviour and preferences. Thus 2050. The most pronounced decline is expected
it seems fair to assume that short of an event to be seen in China.
that forces such dramatic – and long-lasting – “The pace of this decline in LNG exports
changes, the net zero scenario is less likely to play after the mid-2030s is greater than the speed of
out than the others. depreciation of liquification facilities, implying
BP envisions LNG helping to create a “more that towards the end of the outlook some facili-
competitive, globally integrated gas market” ties need to be operated at less than full capacity
under both the business-as-usual and rapid or shut down prematurely,” BP said.
scenarios.
In the business-as-usual case – which still What next?
assumes change, albeit at the same pace it has BP noted that the scenarios it had outlined in its
previously occurred – LNG trade is projected to outlook were not predictions of what is likely to
rise above 1 tcm by 2050. Even in this case, how- happen, or indeed what the company wanted
ever, most of the growth is anticipated to take to happen, but rather an exploration of differ-
place in the nearer term, with the next 10 years ent judgements and assumptions relating to the
or so accounting for roughly 60% of it. energy transition.
The US, Africa and the Middle East are pro- “The scenarios are based on existing and
jected to be the main sources of incremental sup- developing technologies which are known
ply. Asia is anticipated to be the main market for about today and do not consider the possibil-
these rising exports, along with the EU, which ity of entirely new or unknown technologies
BP said would remain an important balancing emerging,” the super-major added.
market for LNG. It is worth noting that the outlook has been
The same regions are predicted to be the published during a highly unpredictable year.
leading sources of supply and demand under This may serve as a timely reminder of how dif-
the rapid scenario. However, under this scenario, ficult it is to make projections about the future
LNG trade is anticipated to grow more rapidly – and it is thus not surprising that BP is seeking
initially, before slowing significantly over the not to present its scenarios as predictions.
second half of the outlook period. Looking back instead of forward, it is not so
This is because LNG imports are initially long ago that future scenarios revolved around
expected to play a significant role in coal-to-gas peak supply. The fact that all of the scenarios set
switching across China, India and elsewhere in out in BP’s outlook feature peak demand instead
Asia, before falling back as these countries pivot illustrates how much, and how unexpectedly,
towards greener alternatives. things have already changed.™

Week 38 23•September•2020 www. NEWSBASE .com P7