Oil is expected to be the slowest-growing fuel in terms of demand over the next 20 years as biofuels and other renewable energy sources take a larger role in meeting the world's additional energy needs, BP said Wednesday.
Global liquids consumption growth, including biofuels, is expected to slow to 0.8% a year between 2011 and 2030 with oil making up just 0.6%/year of the total, according to BP's latest long-term energy outlook.
Despite the modest growth, fossil fuels will still make up about 80% of the world energy needs in 2030 when global liquids demand is likely to have risen by 16 million b/d to more than 103 million b/d, BP said.
The fastest growing fuels are set to be renewables, including biofuels, which are expected to grow at 8.2%/year through 2030, while gas will continue to be the fastest growing fossil fuel at 2.1%/year, BP said.
The latest estimates come despite a downward revision to expected nuclear output, which was revised lower after the Fukushima incident in March 2011, and a less optimistic outlook for the production of next-generation biofuels, BP said.
Renewables on their own contribute more to world energy growth than oil, BP said, with the largest single fuel contribution coming from gas, which will meet about at third of the projected growth in global energy demand.
"The growth of global energy consumption is increasingly being met by non-fossil fuels," BP's chief economist Christof Ruhl said. "Renewables, nuclear and hydro together account for 34% of the growth ... this aggregate non-fossil contribution is, for the first time, larger than the contribution of any single fossil fuel."
Overall, the world's primary energy consumption is projected to grow by 1.6%/year over the period to 2030, adding 39% to global consumption, a figure equivalent to a new US and China in terms of demand, BP said.
Nearly all of that growth, 96%, is expected to come from the emerging economies, with more than half coming from China and India alone, BP said.
The share of world energy currently met by coal and oil will slip at the expense of gas and non-fossil fuels, BP estimates, with fossil fuels converging on a market share of 26-28% each in 2030. By the same time, non-fossil fuel groups will have a market share of 6-7% each.
Energy from coal will account for more than a quarter of total energy output by 2030, BP said.
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OPEC's share of global oil production is set to rise to 45%, the highest since the late 1970s, BP said, despite a net increase of 5 million b/d in liquids supplies from non-OPEC sources such unconventional gas in the US and Brazilian biofuels.
Canadian oil sands, Brazilian deepwater deposits, and US shale oil, will also help offset continued declines in a number of mature province's production of conventional oil, BP said.
While oil import dependency will continue to grow in high-growth China and India, the boom in shale gas and coal bed methane in the US while likely mean the the world's biggest energy consumer will become a net exporter by 2030, BP said.
Shale gas and coal bed methane will account for almost two thirds of US production by 2030 as the country looks at potential LNG exports.
Import dependency in the US is also likely to fall to levels not seen since the 1990s, because of improved fuel efficiency and the increased share of biofuels, BP said.
Indeed, one of the biggest energy savings over the next 20 years will likely come from a doubling of the internal combustion engine's efficiency due to hybridization with renewable fuels.
The efficiency improvement from hybridization could mean 11 million b/d less liquids demand by 2030, equivalent to another Saudi Arabia in terms of supply, BP said.
By 2030, BP said it expects hybrids to account for most car sales and roughly 30% of all vehicles on the road.
Despite the fast growth of renewable energy, BP warned that it expects global carbon dioxide emissions to grow 28% by 2030 even though emissions should peak after 2020.
BP reiterated that it sees the International Energy Agency's 450 emission Scenario as unachievable, with carbon abatement policies in the Organization for Economic Cooperation and Development, including carbon pricing, reducing emissions in 2030 by 10% versus 2010.
The due to the fast pace of energy demand growth in developing countries the fall is outweighed by carbon increases overall.
