For the first time in modern history, fossil fuel consumption is likely to shrink as climate policies promote renewable energy while the coronavirus outbreak leaves a lingering impact on global demand for oil, BP said in a forecast.
BP plc is a British multinational oil & gas company based in London, UK. It is one of the “supermajors” of oil and gas in the world, and operates in more than 80 countries.
BP’s Energy Outlook 2020 forecast underpins the latest plan of Chief Executive Bernard Looney to ‘reinvent’ the 111-year-old oil and gas business by changing renewables and power.
London-based BP expects global economic activity to rebound only partly from the pandemic in the coming years as travel restrictions ease. But some “scarring effects” including home-based work will lead to slower growth in energy usage.
This year, BP extended its forecast into 2050 to match it with the company’s plan to reduce carbon emissions from its activities to net zero by the middle of the century.
BP predicts that the demand for coal, oil and natural gas is expected to significantly decline in the longer term.
Though the share of fuels has shrunk in the past as a percentage of the overall energy pie, its consumption has never contracted in absolutely, said BP chief economist Spencer Dale.
Even with energy demand expected to increase on the back of rising population and developing economies, the energy sources will significantly change to renewable sources such as wind and solar, Dale said.
The proportion of fossil fuels is expected to decline from 85 percent of total primary energy demand in 2018 to between 20 percent and 65 percent by 2050.
At the same period, the share of renewable energy is projected to rise from 5 percent in 2018 to 60 percent by 2050.
In its forecast, BP said the growth in global economic activity slows “considerably” over the next 30 years from its past 20-year average, due in part to lasting effects of the COVID-19 pandemic as well as the worsening impact of climate change on economic activity, particularly in Africa and Latin America.