BP Energy Outlook 216 edition Spencer Dale, group chief economist Outlook to 235 bp.com/energyoutlook #BPstats
Disclaimer This presentation contains forward-looking statements, particularly those regarding global economic growth, population growth, energy consumption, policy support for renewable energies and sources of energy supply. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual outcomes may differ depending on a variety of factors, including product supply, demand and pricing; political stability; general economic conditions; legal and regulatory developments; availability of new technologies; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation. BP disclaims any obligation to update this presentation. Neither BP p.l.c. nor any of its subsidiaries (nor their respective officers, employees and agents) accept liability for any inaccuracies or omissions or for any direct, indirect, special, consequential or other losses or damages of whatsoever kind in connection to this presentation or any information contained in it. Unless noted otherwise, data definitions are based on the BP Statistical Review of World Energy, OECD and historical energy data up to 214 are consistent with the 215 edition of the Review. Gross Domestic Product (GDP) is expressed in terms of real Purchasing Power Parity (PPP) at 21 prices. 2
Economic backdrop Trillion, $21 25 Other 2 India Africa 15 China 1 OECD 5 OECD 1965 2 235 GDP 3 Contribution to GDP growth 214-35 Trillion, $21 1 2 3 Other India Africa China OECD Population Productivity
Global energy demand Consumption by region Billion toe 18 Other 15 Other Asia 12 China Other OECD 9 6 3 Industry Transport 1965 2 235 4 Consumption growth by region 1 year average, % per annum 12% Other Asia 1% China 8% World 6% OECD 4% 2% % -2% 1975 1995 215 235
What drives energy demand? 5
Global GDP and energy World GDP and energy demand Index (1965=1) 12 1 GDP Primary energy 8 6 4 2 1965 2 235 6.7.6.5.4.3.2.1 Energy intensity by region Toe per thousand $21 GDP China US World EU India Africa. 1965 2 235
Slower global GDP growth Annual growth rates 214-35 Historical growth rates % per annum 5% 4% 3% GDP Primary energy Base case % per annum, 2-year moving average 5% 4% GDP 3% 2% 1% 2% 1% Primary energy % China World China World % 1985 1995 25 215 7
Energy intensity and energy demand Decline in world energy intensity World energy demand % per annum % 1965-214 1994-214 Base case 214-35 Flat demand -1% -2% -3% -4% Fastest 2-year average Billion toe 25 2 15 1965-214 1994-214 Base case Flat demand 1 5 1965 2 235 8
Q: What drives energy demand? A: Global economic growth 9
Fuel mix 5% 4% 3% 2% Shares of primary energy Oil Coal Gas Annual demand growth by fuel Mtoe per annum 25 2 Renew.* Hydro 15 Nuclear 1 Coal 1% Hydro 5 Gas % Nuclear Renewables* 1965 2 235 *Includes biofuels 1994-214 214-35 Oil 1
Key factors shaping the fuel mix What have we learned about US shale? China s changing energy needs Prospects for renewables and other non-fossil fuels 11
US tight oil and shale gas Mb/d 8 US tight oil forecasts Bcf/d 9 US shale gas forecasts 6 4 6 Forecast year: 2 213 214 215 216 25 215 225 235 12 3 25 215 225 235
Global tight oil and shale gas Mb/d 5 4 3 2 1 Tight oil Ten year supply increments: Bcf/d 4 3 2 1 Shale gas S & C America Middle East Europe & Eurasia Africa Asia Pacific 25-15 215-25 225-35 25-15 215-25 225-35 North America 13
Market shares of tight oil and shale gas Shares of total oil/gas production 4% 3% Shale gas Tight oil 2% 1% % 215 22 225 23 235 14
Market shares of tight oil and shale gas Shares of total oil/gas production 4% 3% Shale gas Tight oil Stronger shale case 2% 1% Stronger shale case % 215 22 225 23 235 15
Key factors shaping the fuel mix What have we learned about US shale? China s changing energy needs Prospects for renewables and other non-fossil fuels 16
China s changing energy needs GDP and primary energy growth Shares of primary energy % per annum 1% 8% GDP Primary energy 8% Coal 6% 4% 4% Oil Non-fossils 2% % 2-14 214-25 225-35 Gas % 1985 21 235 17
Key factors shaping the fuel mix What have we learned about US shale? China s changing energy needs Prospects for renewables and other non-fossil fuels 18
Renewables and other non-fossil fuels Mtoe 15 Renewables in power forecasts 1 5 Forecast year: 216 215 214 213 212 211 21 215 22 225 23 235 19
Renewables and other non-fossil fuels Mtoe 15 1 Renewables in power forecasts 5 Forecast year: 216 215 214 213 212 211 21 215 22 225 23 235 Mtoe 4 2-2 -4 Revisions to non-fossil fuels vs 211 Outlook Renewables Biofuels Total Hydro Nuclear 215 22 225 23 2
Oil demand and supply Demand Supply Mb/d 115 11 15 1 95 9 Other Mid East Other Asia India China 235 level Other Brazil US 85 8 214 OECD decline Non-OECD growth 214 Non-OPEC growth OPEC growth 21
Oil demand Mb/d 7 6 5 4 3 2 Liquids fuel demand by sector Transport Industry Other Power Billion vehicles 3 2 1 Non-OECD OECD Vehicle fleet 1 1965 2 235 1965 2 235 22
Natural gas Gas production by type and region Shares of global gas consumption Bcf/d 5 375 Non-OECD shale OECD shale Non-OECD other OECD other 4% 3% Total trade 25 2% Pipeline 125 1% LNG 199 25 22 235 23 % 199 25 22 235
Changing outlook for carbon emissions 24
Carbon emissions % per annum 4% 3% 2% GDP Decline in energy intensity Decline in carbon intensity 1% % 1994-214 214-35 25 CO 2
Outlook for carbon emissions 4 3 Carbon emissions Billion tonnes CO 2 Base case Faster transition IEA 45 2 1 1975 1995 215 235 26
Outlook for carbon emissions Billion tonnes CO 2 4 3 2 1 Carbon emissions Base case Faster transition IEA 45 1975 1995 215 235-1% Carbon intensity % per annum % % -2% -3% Changes in intensity Energy intensity -1% -2% 1994-214 Base case IEA 45-3% 27
Outlook for carbon emissions 4 3 2 1 Carbon emissions Billion tonnes CO 2 Base case Faster transition IEA 45 % % -1% Carbon intensity % per annum -2% Changes in intensity Energy intensity -1% -2% 1994-214 Base case Faster transition -3% 1975 1995 215 235-3% IEA 45 28
Impact of faster transition case Billion toe 5 4 3 2 Coal Oil 1 Hydro & Nuclear Renewables* 1965 2 235 *Includes biofuels Consumption by fuel Gas 29 25 2 15 1 5-5 -1 Annual demand growth by fuel Mtoe per annum 1994-214 Base case Faster transition 214-35 Renew.* Hydro Nuclear Coal Gas Oil Total CO2
Conclusions Global demand for energy continues to rise to power increased levels of activity as the world economy continues to grow Fuel mix changes significantly coal losing, renewables gaining, and oil and gas combined holding steady Growth rate of carbon emissions slows sharply but further policy changes are needed 3
BP Energy Outlook 216 edition Outlook to 235 bp.com/energyoutlook #BPstats