Oil giant BP forecasts world demand for energy will grow massively by 2035 and that the United States will become energy self-sufficient with major implications for the global economy.
BP says world demand for energy will grow by 41 per cent by 2035, driven by growing consumption in the booming economies of China and India.
At the same time the US shale gas revolution will have a radical impact on the global economy, with the consequent cut in the US trade deficit transforming the dynamic with China, BP’s chief economist said.
Unveiling the oil major’s World Energy Outlook 2035, predicting trends in global energy markets for the next 22 years, Christof Ruhl said the looming arrival of the US as an exporter of energy had far-reaching implications for Sino-US relations, the dollar and trade.
BP expects America to switch from “a net importer of energy to a net exporter around 2018”, while Asia will account for about 80 per cent of import growth to 2035.
The predictions represent a drop from 55 per cent growth in the previous period, and BP says the growing use of renewable energy will help energy suppliers meet the world’s needs.
AAP Newsagency reports BP Chief Executive Bob Dudley said competition was “unlocking technology and innovation to meet the world’s energy needs”.
Mr Dudley said “trends in global investment and policy leave us confident that production will be able to keep pace”.
BP says rising energy use will boost global carbon dioxide emissions by 29 per cent in the period, even as emissions decline in Europe and the US.
The Bp reports says Middle Eastern oil producers face a mountain of challenges in the next two decades as Russia and South America strive to replicate the US shale oil boom, while demand jumps in the region’s domestic markets.
Reuters Newsagency reports BP said that Middle East energy use would grow by 77 per cent by 2035, double the increase in production, meaning as little as 65 per cent of oil output will be available for export, down from 72 per cent.
This could put additional pressure on government budgets of countries such as Saudi Arabia that depend on oil export revenue, at the same time as supply from shale oil and other non-conventional sources meets the bulk of global demand growth.
BP expects Russia and South America to join the US in tapping shale oil over the next two decades, indicating the shale boom that has transformed the US energy market could, to some extent, be repeated in other countries.
“The second-biggest coming in over time is Russia and then South America, and in South America Colombia and Argentina,” Mr Ruhl, said at a news briefing.
Reuters reports BP’s prediction that countries other than the United States will partly re-create its shale oil boom contrasts with other long-term energy forecasts.
The Organisation of the Petroleum Exporting Countries (OPEC), for example, assumes shale production will have no impact outside North America.
The United States will become energy self-sufficient by 2035, BP said, a more concrete forecast than previously.
BP says world oil demand will rise to 109 million barrels per day (bpd) by 2035, up 19 million bpd and led by China, India and the Middle East. Even so, oil will be the slowest-growing fuel over the period.
BP expects Russia and South America to contribute about one million bpd of shale oil each by 2035 and that oil from tight rock formations will account for seven per cent of global supplies in 2035, Mr Ruhl said.
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What we have is very rapid growth right now, and decelerating over time,” Mr Ruhl said.
This is the fourth year that BP, a publisher of benchmark energy statistics for more than 60 years, has issued its long-term energy outlook.
This survey marked the first time that BP predicted exactly when the US would be energy self-sufficient.
According to BP while the US becomes a net exporter of natural gas by 2017, shale gas over the next two decades will have no such impact in Europe.
The European Union will see its gas import dependency rise to 84 per cent in 2035 from 66 per cent.
The BP reports says fossil fuels remain dominant in the energy mix to 2035.
Gas and coal will account for 54 per cent of global demand while the share of renewable energy grows to seven per cent from two per cent.
