BP has said that given the world’s growing demand for fossil fuels, the demand for oil has already reached its peak and is experiencing unprecedented decline for decades.
According to the oil firm, the demand for oil cannot fully recover from the effects of the coronovirus epidemic, and may begin to decline in absolute terms for the first time in modern history.
BP’s impressive annual report on the future of energy, published on Monday, states that oil will be cleaned from wind power, solar panels and hydropower plants as renewable energy emerges as the fastest growing energy source on record.
BP’s chief economist, Spencer Dell, said the company’s vision of the world’s energy future became clear due to a combination of the Kovid-19 epidemic and the rapid pace of climate action, which has accelerated “peak oil”.
The report states that two of the report’s three energy scenarios over the next 30 years have led to a death spurt in global oil demand that demand peaked in 2019.
In BP’s third scenario, showing a world in which climate action is not accelerating, oil demand at the same level in 2019 through 2020 appears on plateaus before decreasing from 2035.
The report confirmed a core of warnings from independent energy economists that the effect of coronaviruses would bring the oil industry’s terminal downturn to the forefront of the decade.
BP chief executive Bernard Loney said the findings would help the company “better understand the changing energy landscape” and would help develop its plans to become a net zero energy company by 2050.
He admitted earlier this year that he would not write down the possibility that coronoviruses led to a global peak in oil demand, and BP should be “more confident than ever” for a low-carbon future.
The report’s central scenario, which aligns with the Paris Climate Agreement’s goals of keeping global temperatures below 2C above pre-industrial levels, reflects oil demand demand by 55% over the next 30 years. Meanwhile, the report’s greenest scenario, in which the world aims to limit global heating to 1.5C growth, by 2050 oil demand falls by 80%.
If global governments want to make economic reforms to overcome the coronovirus crisis, energy conversion can be even faster. According to Dell, the boom in economic stimulus packages for low-carbon industries, which is expected by many energy experts, was not taken into account because this result is “not mandatory”.
He will present BP’s energy vision as a three-day event outlining the company’s plans to become a carbon neutral energy company by 2050 in front of the company’s investors on Monday, among the most ambitious energy transition plans set by any major oil Is one of company.
BP last month announced to increase its low-carbon investment eight-fold by 2025 and ten-fold by 2030, while cutting its fossil-fuel production by 40% from 2019. The company made its first move into the offshore wind industry last week with $ 1.1bn. (£ 860m) deal to buy a stake in two projects owned by Equinor, Norway.
According to the report, the world’s greater dependence on clean energy means that renewable energy can grow anywhere from 5% to 20% and 60% of the world, up to 5%.
“In these three scenarios, the share of renewable energy increases more rapidly than any energy fuel seen in history,” Dell said.
They reported that the fear of a coronovirus pandemic was meant to halt economic growth in developing countries, which typically increases energy demand, while economically developed countries are implementing more ambitious climate policies, and report carbon taxes Are increasing.
The trend towards electric vehicles will also take its toll on oil demand. In all three scenarios, the report found that transportation oil use would peak during the mid to mid-2020s due to the trend toward electric cars and hydrogen-powered vehicles.
Another factor for forecasting oil demand over the coming decades are new measures to limit the production of plastics, which would have been manufactured through more recycling and less single-use plastics, using petrochemicals produced from fossil fuels is.
According to BP, this effect may be a variant of the pace of the global energy market. The report expects members of the OPEC oil cartel led by Saudi Arabia to bear the brunt of the declining demand while the US Shell Riggs take a greater share of the global oil market over the next decade. It may also enter an era of greater diversity of energy where no single source dominates the energy landscape, and all are forced to compete to retain a significant share of the market.