14 september 2020
12:57
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Global demand for oil is at an all-time high, says oil group BP in its outlook for the energy sector. Working from home and the emergence of electric vehicles are reducing oil demand.
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The corona pandemic marks the turning point in the era of fossil capitalism, the epoch in which the growing world economy also systematically pushed up the demand for oil. In the coming years, the demand for oil in the world will decline, the oil group BP says in her annual energy forecast.
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It is a historic break from the trend that BP saw until last year. The demand for oil will fall over the next 30 years, the oil group predicts.
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BP outlines three scenarios in its outlook. In the central scenario, the demand for oil – and other liquid fuels such as biodiesel – will be capped in the coming years to really start to decline around 2050. In the two more aggressive scenarios, 2019 will go down in history as the year the world used the most liquid fuel ever.
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The reason for the decline lies in the transport sector. Working from home makes transport less necessary. Electric vehicles make transport without oil. The first trend has an effect in the short term, the second in the longer term. Together they ensure that oil demand no longer rises significantly today and does not catch up later.
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Never before in modern history has the demand for any fuel declined in absolute numbers.
Spencer Dale
Chief Economist BP
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Oil consumption used to fall as a percentage of total energy consumption, says Spencer Dale, BP’s chief economist. The fact that it is now also starting to decline in absolute numbers has never been seen, he says. “Never before in modern history has the demand for any fuel declined in absolute numbers.” At the same time, according to him, the share of green energy is also growing at an unprecedented rate.
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Green energy
Fossil energy currently accounts for 85 percent of the world’s total energy consumption. In BP’s scenarios, this will drop to 20 to 65 percent by 2050. The share of green energy would increase from 5 percent of the total now to 60 percent.
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The global demand for energy continues to grow, because the world is getting richer. But a larger portion of that energy comes from electricity and renewable sources. The latter, powered by wind and solar energy, will be the fastest growing source of energy in the next 30 years.
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According to BP, it will be necessary to reduce carbon emissions and the political world will therefore have to push the price of carbon upwards. Postponing that policy leads to significant economic costs, BP warns.
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This week BP is holding a three-day event for investors in which it explains how it sees the energy transition. CEO Bernard Looney has already indicated that the company will have to reinvent itself.
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