BP rep offers 20-year outlook

Ushering the workforce: Ribbon cut on Fletcher’s $8M IPT program
March 26, 2014
Another successful ‘Ladies Night Out’
March 26, 2014
Ushering the workforce: Ribbon cut on Fletcher’s $8M IPT program
March 26, 2014
Another successful ‘Ladies Night Out’
March 26, 2014

While many people envision life in the future with electric cars and less trips to the gas pump, BP analysts project fossil fuels will continue to dominate the energy market by 2035.

Mark Finley, general manager for Global Energy Markets at BP, said by 2035 the United States’ use of fossil fuels would undergo a slight decline from 85 to 80 percent.

And while there has been a long-term evolution of fuel shares in the United States, as well as the rest of North America, oil remains the dominant form of energy.

Finley’s presentation at the South Central Industrial Association meeting detailed projections about the world, as well as the United States’ energy system throughout the next 20 years, while taking into account changes in public policy, technology and the economy.

BP’s energy trends predict the United States will achieve overall self-sufficiency with regard to energy by 2035, as it remains “a small net importer of oil while becoming an exporter of natural gas and coal.”

“North America switches from being one of the biggest importers of energy in the world to being a significant exporter of energy,” Finley said.

The reasoning of self-sufficiency comes as the United States’ increase in oil production last year was one of the biggest increases the world has ever seen. The trend will continue as BP’s energy forecast estimates North American energy production will continue to grow by about 25 percent.

Contrary to the United States, where import dependence continues to decline, China will see their import dependence grow, Finley said.

He mentioned the possibility of China surpassing the U.S. as the country who imports the most energy in the world.

Back in the United States, oil remains a dominant factor of supply and demand, but there are also new forms of energy coming into the mix.

Finley said those forms include renewables, shale gas and unconventional oil supplies.

“There are new forms of energy coming into the mix driven by consumers and producers reacting to higher energy prices we’ve seen in recent years,” he said.

In the future, there are projected structural declines in oil demand driven by consumers who respond to higher prices at the pump, but there will also be governmental policies to provide a more efficient use of energy to produce more mature economies.

These developments continue to evolve in the United States transportation sector.

“Every year when we look at the data, we don’t see that replacing your vehicle with compressed natural gas is a really competitive option,” Finley said, mentioning 85 percent of transportation methods will continue to use oil by 2035.

To increase fuel efficiency, Finley said options include making the internal combustion engine more fuel efficient and supplementing it with hybrid technology. But the option of an increase in battery-powered vehicles is met with criticism for its cost and range limitations.

“By 2035, three-quarters of new car sales have some form of hybrid technology in them,” the analyst said.

Finley said these projections are not the world as BP wishes it would be, but an objective projection based on the world providing sufficient energy to fuel continued economic growth.

With BP’s projections for the next 20 years, power generation is the only source of energy demand predicted for growth in the United States.

“Here in North America and other mature economies around the world, the share of energy used just to generate electricity keeps going up overtime,” Finley said. “Think about how many more gadgets that you have that need to be plugged in today than you did 10 years ago.”