The Strategist

BP: Growing prosperity stimulates demand for energy

02/09/2017 - 15:22

BP released its annual Energy Outlook for 2017. The company's experts monitor trends in the global energy market and make predictions on unfolding circumstances and changes tone of market in 2017. Additionally, they identify the main factors that influence the global energy market.

Mike Mozart
Mike Mozart
Here are main conclusions of the report’s drafters.

• Global GDP is growing under influence of the rapid rising of emerging economies, as well as thanks to 2 million people that have got out of poverty.

• Growth of welfare causes growth of energy demand in the world, despite the fact that rate of growth has slowed down due to the rising energy efficiency. The demand for energy is growing by 30%.

• Fuel mix continues to adapt and change. Nevertheless, oil, gas and coal remain the dominant energy sources. Renewables, nuclear energy and hydropower will remain sources that generate half the amount of energy for the rest of 2035. Gas consumption is growing more rapidly than consumption of oil and coal, which is largely obliged to the shale gas in the United States. The global gas market will also determine LNG market’s development. Demand for oil is growing, yet the pace is slowing down because of lower demand from the transport industry, which is the main customer for oil industry.

Growing number of electric vehicles will impact demand for oil in the future.

• Abundance of oil reserves could force the oil companies to lower cost of production to use their competitive advantage so that their market share could increase.

• Global coal consumption is projected to reach a maximum, as the reform of China's economic growth stimulated a decrease in demand for coal and energy in general. Nevertheless, China remains the largest market, with surging energy demand.

• Renewables are the fastest growing source of energy, as demand for them has grown almost 4 times over the past 20 years.

• The world economy continues to promote electrification. Two-thirds of overall growth relate to this sector.

• According to the company’s experts, level of emissions will be less than a third of that in the last 20 years. This progress will result from growing energy efficiency and change in the fuel mix.

Nevertheless, emissions continue to rise, which emphasizes the need for further action.