The international oil and gas company BP has published an annual forecast on the state of the global energy industry until 2050 – Energy Outlook BP 2020. The company’s experts agree that the oil industry will either return to the pre-crisis state in a few years, or never return. Especially if the norms of law change in terms of payments for emissions of pollutants into the atmosphere, or in the mass consciousness of people, there will be shifts towards more environmentally friendly consumption. BP has calculated three scenarios according to which the energy sector will develop: Rapid, Net Zero, Business-as-usual. Details and expert assessments – in the material “Izvestia”…
Logical and consistent
The “current baseline” scenario assumes the development of the world energy sector according to the existing trends. In this scenario, energy consumption will increase by 25%, the share of coal will decrease by 20%, and the growth of renewable energy will be the same 20%.… The cost of greenhouse emissions will also increase, but not enough for industrial enterprises to seriously revise their energy infrastructure: up to $ 30-50 per ton. Emissions will change slightly. It is worth noting a small increase in hydrogen and gas energy. Most of the transport will remain petrol.
The downside is that this scenario is based solely on figures from previous years, excluding rapidly developing technologies and startups.… Experts consider this scenario to be unfavorable for human well-being and the environment.
This scenario is more likely than others, according to Maxim Khudalov, head of the sustainable development risk assessment group at ACRA. “If the payment for emissions rises, developed countries will reduce the consumption of petroleum products. But this is unlikely to apply to developing ones in the near future: hydrocarbons are still cheaper and more convenient than renewable energy sources. It is unlikely that India and African countries will abandon fossil fuels. ” The expert also casts doubt on the rapid growth of hydrogen projects: “The costs of rebuilding the energy infrastructure are astronomical.”
Maxim Khudalov cites politics as the real reason for publishing this report: BP has openly declared its support for green trends and, possibly, outlined its own course of development.
Photo: REUTERS / Vasily Fedosenko
Maria Belova, Research Director at VYGON Consulting, agrees with Khudalov. “In August, BP unveiled a new green strategy that will cut oil and gas production by 40% by 2030. It would be strange to predict the growth of world oil demand by announcing such a development strategy. Thus, instead of an annual analysis of the state of the energy sector, a global industry forecast with longer and more varied options has been published. So, BP first looked into 2050 and described three development scenarios“.
According to the analyst, oil demand will not drop much in the coming years: “We admit the growth of consumption above the level of 2019 after the post-pandemic economic recovery until 2025-2026. Further, the demand will decrease. ” Thus, the true state of affairs will be between the “Basic” and “Quick” scenarios.
Very expensive emissions
The “fast” option involves policy adjustments that will increase the cost of greenhouse emissions. The total number of coal emissions will be reduced to 70%. This scenario is average in terms of indicators relative to the other two. The “fast” scenario assumes slow GDP growth and a sharp decline in coal use. Most of the energy consumption, according to BP estimates, will come from transportation. Along with the traditional “gasoline” means of transportation, the wide development of electric and hydrogen transport is expected.
Photo: TASS / Alexander Kolbasov
Mikhail Aristakesyan, head of the analytical department of the FINAM Group of Companies, is inclined towards this option: “BP, in our opinion, correctly described the future trend in the energy sector. The timing of the scenario is more or less optimistic and subject to correction. However the trend is obvious: the share of traditional energy will decrease, while the share of alternative energy will grow“. The expert believes that this scenario is typical not only for Western countries: “China is actively developing alternative energy.”
The awakening of mass consciousness
According to the “Zero” scenario, the influence of mass environmental consciousness will also be added to the political measures, which stimulates alternative energy, conscious consumption and respect for nature at the level of countries and individual households.… Annual emissions will decline by 95%, to just 2 gigatons by 2050, and global temperature rise will not exceed 1.5 degrees Celsius. Coal consumption will decrease by 70%, and the volume of renewable energy will approach 60%. The industry will widely use hydrogen energy and biomass energy. The share of hydrogen in the electricity supply of the population will increase and the share of gas will decrease, and transport will become predominantly electric.
Photo: Izvestia / Zurab Javakhadze
According to Ekaterina Kosareva, managing partner of the analytical agency WMT Consult, this scenario is extremely rosy and raises many questions. “Zero “scenario does not take into account many factors. This is also the lobby of oil workers close to governments who will not give up their positions so easily. And social change: we’re talking about the millions of jobs in the oil industry… The sudden transition of transport to electricity and hydrogen is also doubtful: people are too conservative to change habits, and for the automotive industry it is fraught with huge costs for a massive reorganization of production. Decrease in coal consumption is also questionable: the countries of the Asia-Pacific region consume a lot of energy, and so far they can not objectively pay for green… In addition, the massive use of green energy requires colossal funds. Production, storage, transportation, infrastructure of the same hydrogen – everything is now in embryonic development, at the stage of research, and not all pilot projects, even successful ones, are really applicable to real life due to the high cost of materials, production or service. ” Kosareva notes that BP experts themselves call the options scenarios, but not forecasts.
Regardless of the scenario, the demand for electricity will grow: by 10% under the “Bystrom” and “Zero” scenarios and by 25% under the “Basic”… In this case, the need will be covered from different sources. This means a global redistribution of the structure of the energy market in favor of diversification. This will happen for the first time in world history: there has always been some kind of dominant energy carrier… “Fast” and “Zero” scenarios assign a large role to hydrogen energy. The gas sphere will be strengthened or, conversely, will fall, depending on the variant.
At the same time, costs for enterprises that harm the environment will definitely increase. The cost of greenhouse emissions per ton will range from $ 40–60 (“Basic”) to $ 150–250 (“Fast”, “Zero”).
Photo: TASS / dpa / Andreas Arnold
According to BP estimates, the growth of renewables is expected to be gradual or sharp anyway. In the structure of RES – energy of the sun, wind, geothermal or biomass energy. At the same time, the cost of obtaining a kilowatt using a renewable energy facility will be 25–70% lower than now. The development of alternative energy will peak in the 2030s – 2040s of the 21st century.
What about Russia
In Russia, traditional energy sources account for the lion’s share of exports, and both “green” scenarios are economically disadvantageous… At the same time, the green trend is typical for developed countries, to which Russia counts itself. This is a contradiction.
“The prospects of the RF fuel and energy complex are in deep oil refining. It’s time to understand that energy exports are expensive… First of all, it is necessary to develop our own economy, using cheap energy resources, and to catch up with the lag in chemistry and mechanical engineering, ”comments Maxim Khudalov from ACRA.
Maria Belova of VYGON Consulting considers BP’s forecast as a warning for Russia. The “baseline” scenario assumes for Russia daily production of 12 million barrels per day by 2030. According to Bystrom, by 2030 production will fall to 7 million barrels per day. This means increased competition in the market and, most likely, low oil prices. ” These factors must be taken into account in the strategic planning of the country’s economy and budget.
Moscow Oil Refinery, where the Euro + high-tech oil refining complex was commissioned in July
Photo: RIA Novosti / Press Service of the Moscow Mayor’s Office
However, the authors of the study point out that the voiced options are nothing more than scenarios and are not forecasts. The oil industry, as 2020 has shown, may be affected by the most unexpected factors: economic agreements, the severing of political relations and sanctions, a pandemic and related restrictions.