BP Energy Outlook 2019 edition

BP Energy Outlook 2019 edition
BP Energy Outlook
2019 edition
The Energy Outlook                                The Outlook considers a number of different scenarios. These
                                                  scenarios are not predictions of what is likely to happen or what BP
explores the forces                               would like to happen. Rather, they explore the possible implications
shaping the global                                of different judgements and assumptions by considering a series of
                                                  “what if” experiments. The scenarios consider only a tiny sub-set of
energy transition                                 the uncertainty surrounding energy markets out to 2040; they do not
                                                  provide a comprehensive description of all possible future outcomes.
out to 2040 and the
                                                  For ease of explanation, much of the Outlook is described with
key uncertainties                                 reference to the ‘Evolving transition’ scenario. But that does not imply
surrounding that                                  that the probability of this scenario is higher than the others. Indeed,
                                                  the multitude of uncertainties means the probability of any one of
transition                                        these scenarios materializing exactly as described is negligible.
                                                  The Energy Outlook is produced to aid BP’s analysis and decision-
                                                  making, and is published as a contribution to the wider debate. But the
                                                  Outlook is only one source among many when considering the future
                                                  of global energy markets. BP considers the scenarios in the Outlook,
                                                  together with a range of other analysis and information, when forming
                                                  its long-term strategy.

3 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
The outlook facing major energy             need for much more energy to meet
                                                  providers, like BP, is both challenging     demand as prosperity rises.
                                                  and exciting.                               There are many other challenges
                                                  One of the biggest challenges of our        facing our industry as the global energy
                                                  time is a dual one: the need to meet        system evolves. The centre of gravity
                                                  rising energy demand while at the           of energy demand is shifting, with
                                                  same time reducing carbon emissions.        the expanding middle classes in Asia
                                                  The emissions-reduction side of this        accounting for much of the growth in
                                                  dual challenge will mean shifting to a      global GDP and energy consumption
                                                  lower-carbon energy system, as the          over the next 20 years. The pattern
Welcome to the                                    world seeks to move to a pathway            of energy supply is also changing,
                                                  consistent with meeting the climate         with the shale revolution catapulting
2019 edition of                                   goals outlined in the Paris Agreement.      the US to pole position as the world’s
BP’s Energy Outlook                               Much more progress and change
                                                  is needed on a range of fronts if
                                                                                              largest producer of oil and gas, and the
                                                                                              rapid growth of liquefied natural gas
                                                  the world is to have any chance of          (LNG) transforming how natural gas
                                                  moving on to such a pathway.                is transported and traded around the
                                                  Meeting the other side of the dual          globe. Meanwhile, the way in which
                                                  challenge will require many forms           energy is consumed is changing in
                                                  of energy to play a role. There’s a         real time, as the world electrifies and
                                                  strong correlation between human            energy increasingly becomes part of
                                                  development and energy consumption          broader services that are bought and
                                                  – and our analysis of this relationship     sold in ever more competitive and
                                                  in this year’s Outlook highlights the       efficient digital markets.

                                                  The challenge is to understand, adapt       to our thinking and decision-making.
                                                  and ultimately thrive in this changing      It helps us gauge the range of
                                                  energy landscape. Along with these          uncertainties, judge how the risks
                                                  challenges, come opportunities – and        can be managed, and determine how
                                                  that’s what makes this a really exciting    best to encourage change that puts
                                                  time for our industry. Billions of people   the world on a more positive and
                                                  are being lifted out of low incomes,        sustainable path. Ultimately, we are
                                                  helping to drive economic growth            all part of the energy transition and
                                                  and the demand for energy. New              the decisions all of us make today
                                                  technologies are revolutionizing the        can shape the future for many years
                                                  way in which that energy is produced,       to come.
                                                  transported and consumed. And the           The Energy Outlook plays an
                                                  transition to a lower-carbon energy         important role in helping to inform and
                                                  system is opening up a wide range of        shape our strategic decision-making in
                                                  business possibilities.                     BP. I hope you find this year’s Outlook
                                                  This year’s Energy Outlook provides         a useful contribution to your own
                                                  fresh insight into these trends and         discussions and thinking.
                                                  many more. The value of the Outlook is
                                                  not in trying to predict the future. Any
                                                  such attempt is doomed to fail – the
                                                  uncertainty surrounding the energy
                                                  transition is here to stay. Rather the
                                                  value of the Energy Outlook is in           Bob Dudley
                                                  providing a structure and discipline        Group chief executive

5 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Executive summary

The demand for                                    Key points

energy is set to                                    The Energy Outlook considers              Despite this increase in energy
increase significantly                              different aspects of the energy           demand, around two-thirds of the
                                                    transition and the key issues and         world’s population in 2040 still live
driven by increases                                 uncertainties these raise.                in countries where average energy
in prosperity in the                                In all the scenarios considered, world
                                                                                              consumption per head is relatively
                                                                                              low, highlighting the need for
developing world                                    GDP more than doubles by 2040
                                                    driven by increasing prosperity in
                                                                                              ‘more energy’.

                                                    fast-growing developing economies.        Energy consumed within industry
                                                                                              and buildings accounts for around
                                                    In the Evolving transition (ET)           three-quarters of the increase in
                                                    scenario this improvement in living       energy demand.
                                                    standards causes energy demand to
                                                    increase by around a third over the       Growth in transport demand slows
                                                    Outlook, driven by India, China and       sharply relative to the past, as gains
                                                    Other Asia which together account         in vehicle efficiency accelerate.
                                                    for two-thirds of the increase.           The share of passenger vehicle
                                                                                              kilometres powered by electricity
                                                                                              increases to around 25% by
                                                                                              2040, supported by the growing
                                                                                              importance of fully-autonomous
                                                                                              cars and shared-mobility services.

                                                    The world continues to electrify,         Natural gas grows robustly,
                                                    with around three-quarters of             supported by broad-based demand
                                                    the increase in primary energy            and the increasing availability of gas,
                                                    absorbed by the power sector.             aided by the continuing expansion
                                                                                              of liquefied natural gas (LNG).
                                                    Renewable energy is the fastest
                                                    growing source of energy,                 Global coal consumption is broadly
                                                    contributing half of the growth           flat, with falls in Chinese and OECD
                                                    in global energy supplies and             consumption offset by increases in
                                                    becoming the largest source of            India and Other Asia.
                                                    power by 2040.
                                                                                              In the Evolving transition scenario,
                                                    Demand for oil and other liquid           carbon emissions continue to
                                                    fuels grows for the first part of the     rise, signalling the need for a
                                                    Outlook before gradually plateauing.      comprehensive set of policy
                                                                                              measures to achieve ‘less carbon’.
                                                    The increase in liquids production
                                                    is initially dominated by US tight oil,   The Outlook considers a range of
                                                    but OPEC production subsequently          alternative scenarios, including the
                                                    increases as US tight oil declines.       need for ‘more energy’, ‘less carbon’
                                                                                              and the possible impact of an
                                                                                              escalation in trade disputes.

7 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019


  Global backdrop                                             16
  GDP, prosperity and energy intensity                        18
  Alternative scenario: More energy                           22
  Dual challenge: More energy, less carbon                    24

  Industry                                                   30
  Non-combusted                                              32
  Alternative scenario: Single-use plastics ban              34
  Buildings                                                  36
  Alternative scenario: Lower-carbon industry and buildings  38
  Alternative scenario: Lower-carbon transport               48
  Alternative scenario: Lower-carbon power                   58

  Regional consumption                       64
  Fuel mix across key countries and regions  66
  Regional production                        68
  Global energy trade                        70
  Alternative scenario: Less globalization   72

  Demand and supply of fuels            76
  Alternative scenario: Greater reform  88
  Natural gas                           94
  Coal                                 102
  Renewables                           104
  Nuclear and hydro                    108

  Carbon emissions                       110
  Alternative scenario: Rapid transition 114
  Beyond 2040                            118

  Comparisons to previous Outlooks 124
  Comparisons to external Outlooks 128

  Key figures, definitions and sources 134

9 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

11 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

The Energy Outlook considers a range of scenarios to explore
different aspects of the energy transition
Primary energy consumption by fuel                                               CO2 emissions
Billion toe                                                                      Gt of CO2

                                                                                          0RUHHQHUJ\ 0(
                                                                                              (YROYLQJWUDQVLWLRQ (7
                                                                  1XFOHDU                 /HVVJOREDOL]DWLRQ /*
                                                                                              5DSLGWUDQVLWLRQ 57







             (YROYLQJ     0RUH      /HVV        5DSLG                                                        

*Renewables includes wind, solar, geothermal, biomass, and biofuels. For full list of data definitions see p138

                                                   Key points

                                                      The Energy Outlook considers                        Some scenarios focus on specific
                                                      a range of scenarios to explore                     fuels or policies, e.g. a possible
                                                      different aspects of the energy                     ban on single-use plastics
                                                      transition. The scenarios have                      (pp 34-35). Others focus on impact
                                                      some common features, such                          of possible changes in behaviour,
                                                      as ongoing economic growth                          e.g. an escalation in trade disputes
                                                      and a shift towards a lower-                        (pp 72-75) or major oil producers
                                                      carbon fuel mix, but differ in                      reforming their economies
                                                      terms of policy, technology                         faster-than-expected (pp 88-89).
                                                      or behavioural assumptions.                         The Outlook also considers the
                                                      In what follows, the beginning                      dual challenge facing the energy
                                                      of each text page (unless stated                    system: the need for ‘more energy’
                                                      otherwise) highlights features of the               (pp 22-23) and ‘less carbon’
                                                      energy transition common across all                 (pp 24-25), including the contribution
                                                      scenarios considered. For ease of                   reducing carbon emissions in
                                                      exposition, much of the subsequent                  different sectors of the energy
                                                      description and text boxes are                      system – transport (pp 48-51),
                                                      based on the Evolving transition                    power (pp 58-61) and industry and
                                                      (ET) scenario, which assumes that                   buildings (pp 38-41) – can make to
                                                      government policies, technology and                 achieving the Paris climate goals.
                                                      social preferences continue to evolve
                                                      in a manner and speed seen over
                                                      the recent past.

13 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

The Outlook considers the energy transition through three different
lenses: sectors, regions and fuels
Primary energy demand
Billion toe

                              End-use sector                                      Region                                       Fuel

              7UDQVSRUW                                   2WKHU                                    5HQHZDEOHV

              ,QGXVWU\                                    $IULFD                                   +\GUR

              1RQFRPEXVWHG                               2WKHU$VLD                               1XFOHDU

              %XLOGLQJV                                   ,QGLD                                    &RDO

                                                          &KLQD                                    *DV

                                                          2(&'                                     2LO



*Industry excludes non-combusted use of fuels

Key points

  The Energy Outlook considers the                  Growth in energy consumption              Renewable energy is the fastest
  energy transition from three different            is broad-based across all the             growing source of energy,
  perspectives each of which helps                  main sectors of the economy,              accounting for around half of the
  to illuminate different aspects of                with industry and buildings               increase in energy. Natural gas
  the transition: the sectors in which              accounting for three-quarters             grows much faster than either oil
  energy is used; the regions in                    of the increase in energy demand          or coal. The growing abundance of
  which it is consumed and produced;                (Sectors pp 28-61).                       energy supplies plays an increasing
  and the consumption and production                                                          role in shaping global energy
  of different fuels.                               By region, all of the growth in energy    markets (Fuels pp 78-109).
                                                    demand comes from fast-growing
  In the ET scenario, global energy                 developing economies, led by
  demand grows by around a third                    India and China. Differing regional
  by 2040 – a significantly slower                  trends in energy production lead to
  rate of growth than in the previous               noticeable shifts in global energy
  20 years or so.                                   trade flows (Regions pp 64-75).

15 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

    GDP, prosperity and energy intensity
    Alternative scenario: More energy
    Dual challenge: More energy, less carbon

17 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Global backdrop

Global economic growth is driven by increasing prosperity in
developing economies, led by China and India
                                                                                       Global GDP growth and
Increase in global GDP, 2017-2040                                                      regional contributions
Trillion $US PPP                                                                       % per annum

                         SRSXODWLRQ                                                                                        &KLQD




                                                  Key points

                                                    The world economy continues to               But the vast majority of world
                                                    grow, driven by increasing prosperity        growth is driven by increasing
      Billions of people                            in the developing world.                     productivity (i.e. GDP per head),
      move from low-                                                                             which accounts for almost 80%
      incomes driving global                        In the ET scenario, global GDP               of the global expansion and lifts
                                                    grows around 3¼% p.a. (on a                  more than 2½ billion people from
      economic growth and                           Purchasing Power Parity basis) –             low incomes. The emergence
      energy demand                                 a little weaker than average growth          of a large and growing middle
                                                    over the past 20 years or so.                class in the developing world is
                                                                                                 an increasingly important force
                                                    Global output is partly supported by         shaping global economic and
                                                    population growth, with the world            energy trends.
                                                    population increasing by around
                                                                                                 Developing economies account
                                                    1.7 billion to reach nearly 9.2 billion      for over 80% of the expansion in
                                                    people in 2040.                              world output, with China and India
                                                                                                 accounting for around half of that
                                                                                                 Africa continues to be weighed
                                                                                                 down by weak productivity,
                                                                                                 accounting for almost half of
                                                                                                 the increase in global population,
                                                                                                 but less than 10% of world
                                                                                                 GDP growth.
19 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Global backdrop

Higher living standards drive increases in energy demand, partly
offset by substantial gains in energy intensity
                                                                                Contributions to primary
Increase in primary energy demand, 2017-2040                                    energy demand growth
Billion toe                                                                     % per annum
                                       *'3           (QHUJ\
                                     SHUKHDG       LQWHQVLW\                                                         *'3SHUKHDG








Key points

  Expansion in global output and                    The overall growth in energy               Despite significant growth in
  prosperity drives growth in global                demand is materially offset by             prosperity and energy consumption
  energy demand.                                    declines in energy intensity               over the next 20 years, a substantial
                                                    (energy used per unit of GDP)              proportion of the world’s population
  Energy consumption in the ET                      as the world increasingly learns           in the ET scenario still consumes
  scenario increases by around a                    to produce more with less:                 relatively low levels of energy
  third over the Outlook. As with                   global GDP more than doubles               in 2040. The need for the world
  GDP growth, the vast majority                     over the Outlook, but energy               to produce ‘more energy’ as
  of this increase stems from                       consumption increases by                   well as ‘less carbon’ is discussed
  increasing prosperity, as billions                only a third.                              in pp 22-25.
  of people move from low to
  middle incomes, allowing them to                  Global energy grows at an
  increase substantially their energy               average rate of 1.2% p.a. in the
  consumption per head.                             ET scenario, down from over 2%
                                                    p.a. in the previous 20 years or so.
                                                    This weaker growth reflects both
                                                    slower population growth and faster
                                                    improvements in energy intensity.

21 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Global backdrop

Alternative scenario: More energy
Alternative scenario: the world needs ‘more energy’ to allow global
living standards to continue to improve
Human development index and energy                                        Share of world population consuming
consumption per head, 2017                                                less than 100 Gigajoules per head
HDI                                                                       % of total population

           RI                                         EHVWīW








                                                                               (YROYLQJ            0RUH
                                                                                                  WUDQVLWLRQ          HQHUJ\
                                                 Gigajoules per head
Source: UN 2018

Key points

  There is a strong link between                    This requires around 25% more
  human progress and energy                         energy by 2040 – roughly equivalent
  consumption.                                      to China’s energy consumption
                                                                                                  80% of the world’s
                                                    in 2017.                                      population live in
  The United Nation’s Human
                                                    This assumes that countries                   countries where
  Development Index (HDI)
  suggests that increases in                        in which energy consumption                   average energy
  energy consumption up to                          is much greater than 100 GJ/per               consumption is less
  around 100 Gigajoules (GJ)                        head do not economize on their
  per head are associated with                      energy use. If all those countries            than 100 GJ per head
  substantial increases in human                    reduced average consumption
  development and well-being,                       levels to the EU average in
  after which the relationship                      2040 (around 120 GJ/per head),
  flattens out.                                     this would provide almost the
                                                    entire energy required.
  Around 80% of the world’s
  population today live in countries                Improving energy efficiency in
  where average energy consumption                  countries which use disproportionate
  is less than 100 GJ per head.                     amounts of energy is likely to be
  In the ET scenario, this proportion is            key to solving the dual challenge
  still around two-thirds even by 2040.             of providing ‘more energy and less
  In the alternative ‘More energy’                  carbon’ (pp 22-25).
  scenario this share is reduced to
  one-third by 2040.
23 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Global backdrop

The global energy system faces a dual challenge: the need for
‘more energy and less carbon’
Primary energy demand and carbon emissions
Cumulative growth rate, 2017 = 0%

                             (YROYLQJWUDQVLWLRQVFHQDULR                                                              3ULPDU\HQHUJ\
            &2                                                                                           0RUHHQHUJ\

                                                                                                          /HVVFDUERQ     &2 



                                                  Key points

                                                    The global energy system faces a             The ‘More energy’ scenario
                                                    dual challenge: the need for ‘more           represents a half-way step to
                                                    energy and less carbon’.                     reducing the proportion of the
                                                                                                 world’s population living in
                                                    The ET scenario is not consistent            countries where the average
                                                    with achieving either of these               level of consumption is
                                                    challenges:                                  below 100 GJ/per head to
                                                                                                 one-third by 2040.
                                                       energy demand increases by
                                                       a third, but two-thirds of the            The ‘Rapid transition’ scenario
                                                       world population in 2040 live in          (see pp 114-117) represents a similar
                                                       countries in which average energy         half-way step on carbon emissions:
                                                       consumption is still less than 100        reducing CO2 emissions by around
                                                       GJ per head;                              45% by 2040, almost half-way
                                                                                                 to reducing entirely carbon
                                                       CO2 emissions from energy use
                                                                                                 emissions from energy use.
                                                       continue to edge up, increasing by
                                                       almost 10% by 2040, rather than
                                                       falling substantially.

25 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

    Alternative scenario: Single-use plastics ban
    Alternative scenario: Lower-carbon industry and buildings
    Alternative scenario: Lower-carbon transport
    Alternative scenario: Lower-carbon power

27 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

Energy demand grows in all sectors, with buildings and
non-combusted use increasing in importance
Primary energy consumption by end-use sector†                                        Annual demand growth and sector contributions
Billion toe                                                                          % per annum









†Primary energy used in power is allocated according to final sector electricity consumption
*Industry excludes non-combusted use of fuels

Key points

  Growth in global energy demand                     In the ET scenario, the growth of             The importance of energy used
  is broad-based across all the main                 energy consumption in all sectors             within buildings expands over the
  sectors of the global economy.                     slows as gains in energy efficiency           Outlook, as growing prosperity
  Differing trends in how energy                     quicken. The slowing in demand                in developing economies leads
  is used and consumed in these                      growth is most marked in the                  to significant increases in power
  sectors has an important bearing                   transport sector – with the growth            demand, for space cooling, lighting
  on the energy transition.                          of transport demand less than half            and electrical appliances (pp 52-55).
                                                     the rate of the previous 20 years –
  The industrial sector (including                   as improvements in vehicle
  the non-combusted use of fuels)                    efficiency accelerate (pp 42-43).
  currently consumes around half
  of all global energy and feedstock                 Growth of energy demand
  fuels, with residential and                        used within industry also slows
  commercial buildings (29%)                         (pp 30-31). Despite this, the non-
  and transport (21%) accounting                     combusted use of fuels within
  for the remainder.                                 industry – particularly as a feedstock
                                                     in petrochemicals – is the fastest
                                                     growing source of incremental
                                                     demand (pp 32-33).

29 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Industry

The pattern of energy used within industry shifts, driven by the
changing role of China
Final energy consumption in industry:                                   Final energy consumption in industry:
Regional shares of growth                                               Demand by fuel
% per annum                                                             Billion toe

                                                           2WKHUV                                                                 (OHFWULFLW\

                                                       $IULFD                                                                 *DV
                                                           2WKHU$VLD                                                             &RDO
                                                       ,QGLD                                                                  2LO




Note: Industry excludes non-combusted use of fuels

                                                    Key points

                                                     The Outlook for industrial energy               The transition in the Chinese
                                                     demand is dominated by the                      economy means much of the
    Growth of energy                                 changing energy needs of China                  growth in industrial production
    used in industry shifts                          (see pp 64-67).                                 is located outside of China,
    from China to other                                                                              with India, Other Asia and
                                                     After tripling over the past 20 years,          Africa accounting for around
    developing countries                             Chinese industrial energy demand                two-thirds of the increase in
                                                     in the ET scenario peaks in the                 industrial energy demand over
                                                     mid-2020s and gradually declines                the Outlook.
                                                     thereafter. Some of this decline
                                                     stems from policy efforts to                    All of the net growth in industrial
                                                     improve the efficiency of existing              demand is met by natural gas
                                                     industries. In addition, it reflects            and electricity, with these fuels
                                                     the continuing transition of the                accounting for around two-thirds
                                                     Chinese economy away from                       of the energy used in industry
                                                     energy-intensive industrial sectors             by 2040. Coal consumption
                                                     towards less-intensive service and              within industry declines as China,
                                                     consumer-facing sectors.                        the EU and North America switch
                                                                                                     to cleaner, lower-carbon fuels,
                                                                                                     partially offset by growth in India
                                                                                                     and Other Asia.

31 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Non-combusted

Non-combusted use of oil, gas and coal grows robustly, despite
increasing regulation on the use of plastics
Non-combusted demand: By source                                            Non-combusted demand: Oil demand
Mtoe                                                                       Mb/d



                                                                2LO                               ,PSDFWRIWLJKWHU






Key points

  The non-combusted use of oil,                     The growth of fuels as a feedstock    Despite increasing regulation,
  gas and coal, e.g. as feedstocks                  is slower than in the past, largely   the use of oil as a feedstock
  for petrochemicals, lubricants and                reflecting the assumption that        is the largest source of oil
  bitumen, grows robustly driven by                 regulations governing the use         demand growth over the
  particularly strong growth in plastics.           and recycling of plastics tighten     Outlook (7 Mb/d); the contribution
                                                    materially over the next 20 years,    of non-combusted use to the
  In the ET scenario, the non-                      including a doubling of recycling     growth of gas and coal demand is
  combusted use of fuels grows by                   rates to around 30%. This reduces     much smaller. The non-combusted
  1.7% p.a., accounting for around                  the growth in oil demand by around    use of oil accounts for around
  10% of the overall growth in energy               3 Mb/d relative to a continuation     18% of total liquids consumption
  demand. Oil-based fuels account for               of past trends. (The impact of a      by 2040, compared with 7% for
  around 60% of this growth, followed               worldwide ban on the use of           natural gas and 3% for coal.
  by natural gas (30%) and coal (10%).              single-use plastics is considered
                                                    on pp 34-35).

33 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Non-combusted

Alternative scenario: Single-use plastics ban
Alternative scenario: increasing environmental concerns lead to a
worldwide ban on single-use plastics from 2040
Liquid feedstocks for single-use plastics                                Total liquids demand









Key points

    The ET scenario assumes that the                and the overall growth of liquids
    regulation of plastics tightens more            demand is limited to 4 Mb/d,
    quickly than in the past. But growing           compared with 10 Mb/d in the
                                                                                                A substantial
    concerns about the use of plastics              ET scenario.                                tightening in the
    means that regulation of plastics                                                           regulation of plastics
    may tighten by even more.                       The scenario does not account for
                                                    the energy consumed to produce              could significantly
    The alternative ‘Single-use plastics            the alternative materials used in           reduce the growth
    ban’ (SUP ban) scenario considers               place of the single-use plastics,           of oil demand
    a case in which the regulation of               and so represents an upper-bound
    plastics is tightened more quickly,             of the impact on liquid fuels.
    culminating in a worldwide ban on
    the use of plastics for packaging               Indeed, without further advances
    and other single uses from 2040                 in these alternative materials
    onwards. These single-use plastics              and widespread deployment
    accounted for just over a third of              of efficient collection and reuse
    plastics produced in 2017.                      systems, such a ban could lead
                                                    to an increase in overall energy
    In this alternative scenario,                   demand and carbon emissions,
    the growth in liquid fuels used                 and raise a number of other
    in the non-combusted sector is                  environmental concerns, such as
    reduced to just 1 Mb/d – 6 Mb/d                 increasing food waste.
    lower than in the ET scenario –

35 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Buildings

Buildings account for over a third of global energy growth, driven
by increased power demand in the developing world
Growth of prosperity and                                                     Final energy consumption
energy use in buildings                                                      in buildings by fuel
Annual growth in 2017-2040, % per annum                                      Billion toe

            'HYHORSHG                     2WKHU                2LO






         *'3    (QHUJ\              *'3    (QHUJ\                                                      

                                                  Key points

                                                    The increase in prosperity and                 Energy growth in much of the
                                                    expanding middle class in the                  developed world and CIS essentially
    Electricity provides                            developing world drives growing                flat-lines as increasing activity is
    most of the                                     use of energy within buildings.                offset by efficiency gains.
    increasing energy
                                                    In the ET scenario, energy used in             The vast majority of the growth in
    used in buildings                               buildings grows (1.5% p.a.) more               energy used in buildings over the
                                                    strongly than in industry or transport,        Outlook is provided by electricity,
                                                    with its share of overall energy               reflecting greater use of lighting
                                                    consumption edging up to around                and electrical appliances and the
                                                    a third by 2040.                               increasing demand for space cooling
                                                                                                   in much of the developing world
                                                    This growth is driven entirely                 (Asia, Africa and the Middle East)
                                                    by developing economies,                       as living standards increase.
                                                    where improving wealth and
                                                    living standards allows people                 There is also small increase in gas
                                                    to live and work in greater comfort.           consumption, which gains share
                                                                                                   from both coal and oil in space
                                                                                                   heating and cooking.

37 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Industry and Buildings

Alternative scenario: Lower-carbon industry and buildings
Alternative scenario: Lower-carbon industry and buildings, driven
by efficiency gains, CCUS and circular economy
Energy demand growth in ET and LCIB scenarios                           Industry and buildings fuel mix (2040)
% per annum                                                             Billion toe

              ,QGXVWU\                     %XLOGLQJV                                  ,QGXVWU\           %XLOGLQJV




            (7      /&,%           (7    /&,%                         (7          /&,%       (7     /&,%

Note: Industry does not include non-combusted sector

Key points

  In the ET scenario, the growth                       Energy use in industry and buildings
  of energy used in both industry                      increases by only 0.3% p.a. in the
  and buildings slows relative to the                  LCIB scenario, compared with 1.0%
                                                                                                   Industry and buildings
  past, as gains in energy efficiency                  p.a. in the ET scenario and 1.8% p.a.       are the dominant
  accelerate. The ‘Lower-carbon                        over the past 20 years.                     end-users of global
  industry and buildings’ (LCIB)
  scenario considers an even                           In addition, a rise in carbon               energy and so have an
  more marked slowing in energy:                       prices in line with that assumed            important bearing on
                                                       in the Lower-carbon power scenario          the energy transition
    for industry, this reflects greater                (pp 58-61) prompts a shift in the
    gains in energy efficiency as                      fuel mix, particularly in industry,
    recent trends in efficiency are                    away from coal towards gas and
    accelerated, supported by an                       power and increases the use of
    expansion of circular economy                      carbon capture use and storage
    activities (re-use and recycling)                  (CCUS) in the industrial sector.
    reducing demand for new
    materials and products;

    for buildings, these gains are
    achieved via a combination of
    retrofitting existing buildings and
    stricter regulation of new buildings
    and electric appliances.

39 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Industry and Buildings

Alternative scenario: Lower-carbon industry and buildings
Carbon emissions fall in the LCIB scenario, largely in industry,
driven by efficiency and CCUS
Carbon emissions in industry and buildings                                                                              Carbon emissions by sector
Gt of CO2

                                ,QGXVWU\                                              %XLOGLQJV                                            

















                                                                                                                                  (7          /&,%

Key points

     In the LCIB scenario, CO2 emissions                               The reduction in carbon emissions
     from industry and buildings scenario                              from buildings are more limited,
     fall by 15% (3.9 Gt by 2040),                                     and all stem from the efficiency
     compared with an increase of                                      measures applied to retrofitting
     6% (1.7 Gt) in the ET scenario.                                   existing buildings and tighter
                                                                       efficiency regulations for new
     The majority of these reductions                                  buildings and appliances.
     relative to the ET scenario are
     concentrated in the industrial sector.                            The contribution of fuel switching
     These gains are driven by the                                     to the fall in carbon emissions is
     accelerated efficiency gains and                                  relatively small in both sectors.
     the increase use of CCUS which,                                   This partly stems from the
     in the industrial sector, reaches                                 difficulty of switching fuels for
     around 2 Gt by 2040. The reduced                                  some activities, especially high-
     demand for new materials and                                      temperature processes in industry.
     products associated with the                                      It also reflects that the benefits
     increased adoption of circular                                    of switching from existing fuels
     economy activities also adds                                      into electricity are mitigated without
     to carbon savings in industry.                                    a significant decarbonization of the
                                                                       power sector (see pp 54-57).

41 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Transport

Demand for transport services grows strongly, but gains in energy
efficiency limit increases in energy used
Final energy consumption in transport:                                      Final energy consumption in transport:
By region                                                                   Growth by mode
Billion toe                                                                 Mtoe

                                                            2WKHU                                                        5DLO

                                                            2WKHU$VLD                                                      0DULQH
                                                            ,QGLD                                                           $YLDWLRQ
                                                         &KLQD                                                           5RDG





                                                  Key points

                                                    Rapid gains in energy efficiency         The increase in energy consumed
                                                    limit increases in energy used in        across different modes of transport
                                                    transportation despite rapid growth      is affected by the pace of efficiency
                                                    in the demand for transport services.    improvements. The efficiency of
                                                                                             the average internal-combustion-
                                                    In the ET scenario, the demand           engine car improves by nearly 50%
                                                    for transport services almost            in the major global car markets; truck
                                                    doubles, but quickening gains in         efficiency also records substantial
                                                    engine efficiency mean that energy       gains. As a result, the rate of
                                                    consumed increases by only 20%.          demand growth in the road sector
                                                                                             decelerates significantly, leading
                                                    The growth in energy used in             the slow-down in overall transport
                                                    transport is concentrated within         demand growth.
                                                    developing Asia, which accounts
                                                    for 80% of the net increase,             In contrast, the scope for further
                                                    as rising prosperity increases           efficiency gains within aviation
                                                    demand for both the quantity             and marine is more modest.
                                                    and quality of transport services.       These modes account for nearly
                                                                                             half of the increase in energy used
                                                                                             in transport in the final decade of
                                                                                             the Outlook, even though their
                                                                                             combined share of total transport
                                                                                             demand today is only 20%.

43 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Transport

Transport demand continues to be dominated by oil, despite
increasing use of natural gas, electricity and biofuels
Final energy consumption in transport:                                    Final energy consumption in transport:
Consumption by fuel                                                       Growth by fuel and mode, 2017-2040
Billion toe                                                               Mtoe

                                                            2WKHU                                                           5RDG

                                                            *DV                                                             5DLO

                                                            (OHFWULFLW\                                                     0DULQH
                                                         2LO                                                             $YLDWLRQ




                                                             %LRIXHOV   (OHFWULFLW\   *DV    2LO

Other includes biofuels, coal and hydrogen

Key points

  The transport sector continues                    Electricity and natural gas in
  to be dominated by oil, despite                   transportation increase by
  increasing penetration of alternative             broadly similar volumes
                                                                                                     Non-oil energy
  fuels, particularly electricity and               (120 Mtoe), with the increased                   sources account
  natural gas.                                      use of electricity concentrated in               for over half of the
                                                    passenger cars and light trucks;
  In the ET scenario, the share of oil              and the rising demand for natural
                                                                                                     increase of energy
  within transport declines to around               gas largely within long-distance                 used in transport
  85% by 2040, down from 94%                        road haulage and marine.
  currently. Natural gas, electricity
  and biofuels together account for                 The use of biofuels increases
  more than half of the increase in                 by just under 2 Mb/d (60 Mtoe),
  energy used in transport, with each               predominantly in road transport,
  providing around 5% of transport                  with some increase in aviation.
  demand by 2040.
                                                    An alternative ‘Lower-carbon
  Oil used in transport increases 4                 transport’ scenario (pp 48-51)
  Mb/d (220 Mtoe), with the majority                considers the scope for greater
  of that demand stemming from                      fuel switching, as well as faster
  increased use in aviation and marine,             efficiency gains.
  rather than road transportation.

45 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Transport

Electric vehicles continue to grow rapidly, with their impact
amplified by growth of autonomous vehicles
Passenger car parc and vehicle km electrified                                  Change in the share of road passenger km
Share electrified                                                              Percentage point

                                                                  3DVVHQJHU                                                    3ULYDWHKLUHFDU






                                                                               *Includes all forms of taxis

                                                  Key points

                                                    Electric vehicles continue to                   The rise in global prosperity leads to
                                                    grow rapidly, concentrated within               a shift away from high-occupancy
    Global prosperity and                           passenger cars, light-duty trucks               road transport (buses) to private
    autonomous vehicles                             (LDTs) and public buses.                        vehicles, reducing the global load
    risk increasing                                                                                 factor for road vehicles (i.e. the
                                                    In the ET scenario, the number of               average number of passengers
    congestion                                      electric vehicles reaches around                per vehicle). This trend is
                                                    350 million by 2040, of which                   compounded in the second half
                                                    around 300 million are passenger                of the Outlook by the falling cost
                                                    cars. This is equivalent to around              of road travel associated with the
                                                    15% of all cars and 12% of LDTs.                growing availability of low-cost
                                                                                                    shared mobility services using
                                                    The use of electric passenger                   autonomous vehicles.
                                                    cars is amplified by the emergence
                                                    of autonomous cars (AVs) from                   The fall in the global load factor
                                                    the early 2020s offering low-                   for road vehicles and associated
                                                    cost, shared-mobility services,                 increase in road congestion is a key
                                                    predominantly in electric cars.                 challenge facing the global transport
                                                    As a result, around 25% of                      system over the Outlook.
                                                    passenger vehicle km are
                                                    powered by electricity in 2040,
                                                    even though only 15% of cars
                                                    are electrified.

47 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Transport

Alternative scenario: Lower-carbon transport
Alternative scenario: a lower-carbon transport sector by increasing
efficiency, alternative fuels and shared mobility
Efficiency improvements 2017-2040 (%)                                              Electrification of vehicle km by 2040 (%)
                                                                (7 (YROYLQJ
                                                                /&7 /RZHU        

       ,&(FDUV        7UXFNV     0DULQH         $YLDWLRQ                                 :KHHOHUV    3DVVHQJHU&DUV         7UXFNV

Share of non-oil road transport by 2040 (%)                                        Typical car-lifespan (years)

                  (7                       /&7                                                  (7                       /&7

Key points

  Despite significant increases in                      increased electrification, including         increasing the share of biofuels
  vehicle efficiency and electrification,               bans on sales of all internal-               in road transport in the OECD
  carbon emissions in the transport                     combustion engine cars in much               and China to 20% by 2040 (and
  sector in the ET scenario continue                    of the OECD and China by 2040                to 10% in the rest of the world);
  to increase.                                          or soon after; half of global sales          similarly in aviation, increase the
                                                        of new trucks and buses are                  share of biofuels in jet fuel to 20%
  The alternative ‘Lower-carbon                         electric or hydrogen-powered                 in the developed world by 2040;
  transport’ (LCT) scenario includes a                  by 2040;
  large number of measures designed                                                                  car scrappage schemes which
  to reduce carbon emissions in the                     increased penetration of shared              reduce the typical lifespan of a car
  transport sector, including:                          mobility services, including more            from around 12 years to 8 years
                                                        consumer-friendly ‘mini-buses’,              by 2040, improving the average
    further tightening in vehicle                       increasing the share of passenger            efficiency of the global car parc
    efficiency standards, such that                     kilometres which are electrified             and the pace of electrification.
    the average internal-combustion-                    and helping to arrest some of
    engine car in 2040 is around 55%                    the decline in the global road
    more efficient than today; the pace                 ‘load factor’;
    of efficiency gains in new trucks
    and ships also increases;

49 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Transport

Alternative scenario: Lower-carbon transport
Increasing efficiency, rather than fuel switching, is the main factor
causing transport carbon emissions to fall from current levels
Transport emissions in ET and LCT                             Road emissions in LCT scenario,
scenarios in 2040                                             2017-2040
Gt of CO2


                                         (ĮFLHQF\                                                            *DV
                                         6ZLWFKLQJ                                                           %LRIXHOV






                5RDG       2WKHU                                 'HPDQG (ĮFLHQF\   )XHO    $GYDQFHG 
      7UDQVSRUW                         7UDQVSRUW                   5RDG        IRU          VZLWFKLQJ PRELOLW\    5RDG
     HPLVVLRQV(7                      HPLVVLRQV/&7               HPLVVLRQV WUDQVSRUW                          HPLVVLRQV/&7

                                                  Key points

                                                     As a result of these measures,              Compared to the current levels
                                                     CO2 emissions from transport                of emissions, improving levels of
                                                     in the LCT scenario fall by 2%              efficiency within transport mean that
                                                     (0.2 Gt) from 2017 levels,                  the rapid growth in the demand for
                                                     compared with an increase of                transport services over the Outlook
                                                     13% (1.1 Gt) in the ET scenario.            can be met with almost no increase
                                                                                                 in energy consumption. The most
                                                     Compared with the ET scenario,              important driver of these efficiency
                                                     the majority of the reduction               gains is the significant tightening
                                                     in emissions stems from road                in vehicle emissions standards,
                                                     transport, particularly via fuel            much of which is already reflected
                                                     switching. This reflects the                in the ET Scenario. The use of car
                                                     importance of road transportation           scrappage schemes also helps to
                                                     relative to marine and aviation;            improve average car efficiency.
                                                     and the greater scope to electrify
                                                     different aspects of road use.              The contribution of fuel switching
                                                     Increased electrification accounts          in reducing emissions from current
                                                     for around a half of the reduction          levels is less significant. Increasing
                                                     in emissions relative to the ET             electrification accounts for around
                                                     scenario by 2040.                           half of the gains from fuel switching,
                                                                                                 with the majority of the remainder
                                                                                                 reflecting greater use of biofuels,
                                                                                                 which increase by around 4 Mb/d
                                                                                                 to 6 Mb/d by 2040.
51 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Power

The world continues to electrify, led by developing economies,
with renewable energy playing an ever-increasing role
Growth in primary energy and inputs to power                          Fuel shares in power
Billion toe

                                                          2(&'                                             +\GUR 1XFOHDU





      3ULPDU\   3RZHU           3ULPDU\    3RZHU                                                         
      HQHUJ\                    HQHUJ\

Key points

    The world continues to electrify,               The mix of fuels in global power
    with power consumption                          generation shifts materially, with
    growing strongly.                               renewables gaining share at the
                                                                                               By 2040 renewables
                                                    expense of coal, nuclear and hydro.        overtake coal as the
    In the ET scenario, around three-               The share of natural gas is broadly        largest source of
    quarters of the entire growth in                flat at around 20%.
    primary energy over the Outlook                                                            global power
    is used for power generation, with              Renewables account for
    around half of all primary energy               around two-thirds of the increase
    absorbed by the power sector                    in power generation, with their
    by 2040.                                        share in the global power sector
                                                    increasing to around 30%.
    Almost all of the growth in power               In contrast, the share of coal
    demand stems from developing                    declines significantly, such that
    economies, led by China and India.              by 2040 it is surpassed by
    Demand growth in the OECD is                    renewables as the primary
    much smaller, reflecting both slower            source of energy in the global
    economic growth and a weaker                    power sector.
    responsiveness of power demand to
    economic growth in more mature,
    developed economies.

53 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Power

The strong growth of power demand in developing economies
helps renewables penetrate, but also creates demand for coal
Change in primary energy                                               Growth in carbon intensity and
in power 2017-2040                                                     power consumption, 2017-2040
Billion toe                                                            % per annum



                                                                                                                                     :RUOG                          ,QGLD


              2(&'            QRQ2(&'                                                                       

Key points

     The contrasting trends in power                In contrast, the strong growth                                              In the ET scenario, limits on the pace
     demand in the OECD and                         of power demand in developing                                               at which non-fossil fuels can grow
     developing economies affects                   economies means there is greater                                            results in a trade-off between the
     the extent to which the power                  scope for renewables to increase.                                           growth of power and the pace of
     sector can decarbonize.                        But in the ET scenario, renewables                                          decarbonization. Some countries and
                                                    do not grow sufficiently quickly to                                         regions, such as China and Africa,
     The slower growth of power                     meet all of the additional power                                            are able to grow non-fossil fuels
     demand in the OECD slows the                   demand, and as a result coal                                                relatively rapidly and so
     speed with which renewables can                consumption also increases.                                                 achieve high levels of decarbonization.
     penetrate since it is hard for a new                                                                                       In contrast, in some other regions,
     renewable power station to compete                                                                                         limits on the extent to which
     commercially against an existing                                                                                           non-fossil fuels can be increased
     facility. In the ET scenario, there is                                                                                     commercially, means there is
     some substitution of renewables                                                                                            greater reliance on coal, and so
     for coal in the OECD, but the extent                                                                                       less decarbonization.
     of this shift is limited by the pace
     at which existing power stations
     are retired.

55 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Power

      Growth of renewables depends on technical progress and the
      pace at which existing power stations are retired
      Share of renewables in power, and CO2 emissions                                                                         Power mix in 2040
                                                                                                                              Billion toe
                                                          (76FHQDULR               )DVWHUWHFKQRORJ\SURJUHVV


                                                                                                                              5HQHZDEOHV                                          )DVWHUWHFKQRORJ\
                                                                        *W               &2Ȗ


                                                                        *W               &2Ȗ

                                                              6KDUHRI5HQHZDEOHV      &2Ȗ

                                                                                                          Key points

                                                                                                              The outlook for renewables is                   The impact of these faster
                                                                                                              underpinned by continuing gains                 technology gains is partly limited
                                                                                                              in technology, but is also affected             by the speed at which existing
                                                                                                              by a number of other factors.                   power stations are retired,
                                                                                                                                                              especially in the OECD.
                                                                                                              In the ET scenario, the costs of wind
                                                                                                              and solar power continue to decline             If, in addition to faster technological
                                                                                                              significantly, broadly in line with their       gains, policies or taxes double
                                                                                                              past learning curves.                           the rate at which existing thermal
                                                                                                                                                              power stations are retired relative
                                                                                                              To give a sense of the importance               to the ET scenario, the reduction
                                                                                                              of technology gains in supporting               in emissions is doubled.
                                                                                                              renewables, if the speed of
                                                                                                              technological progress was twice as             This suggests that technological
                                                                                                              fast as assumed in the ET scenario,             progress without other policy
                                                                                                              other things equal, this would                  intervention is unlikely to be
                                                                                                              increase the share of renewables                sufficient to decarbonize the
                                                                                                              in global power by around 7                     power sector over the Outlook.
                                                                                                              percentage points by 2040                       The ‘Lower-carbon power’ scenario
                                                                                                              relative to the ET scenario,                    described on pp 58-61 considers
                                                                                                              and reduce the level of CO2                     a package of policy measures aimed
                                                                                                              emissions by around 2 Gt.                       at substantially decarbonizing the
                                                                                                                                                              global power sector.

      57 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Power

Alternative scenario: Lower-carbon power
Alternative scenario: a lower-carbon power sector is driven by
higher carbon prices and direct policy measures
Carbon prices                                                                      Other policy measures
Real $/t of CO2

                                                                   1RQ2(&'                  &RQYHQWLRQDOFRDOEDVHGJHQHUDWLRQ

                                                                                          +LJKHU5 'VSHQGLQJGRXEOLQJSDFHRI



Key points

  The extent to which the global                    This is achieved via a combination               conventional coal-fired power
  power sector decarbonizes over                    of policies. Most importantly,                   stations in OECD banned from
  the next 20 years has an important                carbon prices are increased to $200              2030; worldwide ban from 2030
  bearing on the speed of transition to             per tonne of CO2 in the OECD by                  on new investment in non-CCUS
  a lower-carbon energy system.                     2040 and $100 in the non-OECD –                  coal stations; support for stronger
                                                    compared with $35-50 in OECD and                 deployment of nuclear and hydro
  In the ET scenario, the carbon                    China (and lower elsewhere) in the               power;
  intensity of the power sector                     ET scenario.
  declines by around 30% by 2040.                                                                    support for higher R&D
  The alternative ‘Lower-carbon                     Carbon prices in the LCP scenario                investment, which is assumed
  power’ (LCP) scenario considers a                 are raised only gradually to avoid               to double the pace of
  more pronounced decarbonization                   premature scrapping of productive                technological progress;
  of the power sector.                              assets. To help support carbon
                                                                                                     incentives for investment in
                                                    prices, especially as their impact
                                                                                                     carbon capture, use and storage
                                                    is building, a number of additional
                                                                                                     (CCUS) in gas and coal-fired
                                                    policy measures are taken:
                                                                                                     power stations.

59 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
Sectors – Power

Alternative scenario: Lower-carbon power
The carbon intensity of the power sector declines by over 75% led
by renewables, greater use of CCUS, and less coal
Carbon intensity in ET and LCP scenarios                                   Inputs to power by fuel
g of CO2 per kWh                                                           Billion toe








           (7    &DUERQ  &&86 0RUH5 ' 2WKHU /&3                           (7          /&3
                          3ULFHV VXEVLGLHV VSHQGLQJ SROLFLHV

Key points

                                                    The carbon intensity of the global     Renewables more than account
                                                    power sector in the LCP scenario       for the entire growth of power
      Carbon prices account                         declines by over 75% by 2040           generation in the LCP scenario,
      for nearly half the fall                      relative to the ET scenario. As a      with their share of the global power
      in CO2 emissions                              result, total CO2 emissions in the     sector increasing to around 50%
                                                    LCP scenario fall by 25% by 2040,      by 2040.
                                                    compared with an 7% increase in
                                                    the ET scenario.                       The share of natural gas in power is
                                                                                           broadly unchanged from its current
                                                    The most significant factor            level, although by 2040 almost
                                                    underpinning this decarbonization      half of all gas-fired generation is
                                                    is the higher carbon price,            supported by CCUS. Gas with
                                                    which accounts for almost half
                                                                                           CCUS is more competitive than
                                                    of the carbon reduction. This is
                                                                                           coal with CCUS due to the greater
                                                    supported by the other measures,
                                                                                           carbon content in coal. In total,
                                                    especially during the first half
                                                                                           CCUS captures 2.8 Gt of CO2
                                                    of the Outlook as carbon prices
                                                                                           emissions by 2040 in the
                                                    gradually rise. The limit on the
                                                                                           LCP scenario.
                                                    speed with which carbon prices
                                                    can be increased without leading       Coal is the main loser in the LCP
                                                    to scrapping of productive assets      scenario, with its share declining
                                                    implies other policy measures          from around 40% in 2017 to less
                                                    are needed to achieve significant      than 5% by 2040.
                                                    progress over the next 20 years.
61 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

    Regional consumption
    Fuel mix across key countries and regions
    Regional production
    Global energy trade
    Alternative scenario: Less globalization

63 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

A transition is underway in the global pattern of demand, with the
dominance of the developing world increasing
                                                                             Primary energy growth
Primary energy consumption by region                                         and regional contributions
Billion toe                                                                  % per annum









                                                  Key points

                                                    There is an energy transition              China’s transition to a more
                                                    underway in the global pattern of          sustainable pattern of economic
     By mid-2020s India                             energy demand, with the developing         growth means that by the mid-
     is the world’s largest                         world increasing its role as the main      2020s India surpasses China as
     growth market                                  market for energy consumption.             the world’s largest growth market,
                                                                                               accounting for over a quarter of the
                                                    In 1990, the OECD accounted                growth in global energy demand
                                                    for almost two-thirds of energy            over the Outlook. Even so, China
                                                    demand, with the developing world          remains the largest market for
                                                    just one-third. In the ET scenario,        energy: roughly double the size
                                                    that position is almost exactly            of India in 2040.
                                                    reversed by 2040, with the
                                                    non-OECD accounting for over               Africa’s energy consumption
                                                    two-thirds of demand.                      remains small relative to its size:
                                                    Much of the increase in energy             in 2040 Africa accounts for almost
                                                    demand is concentrated in                  a quarter of the world’s population,
                                                    developing Asia (India, China,             but only 6% of energy demand.
                                                    and Other Asia), where rising
                                                    prosperity and improving living
                                                    standards support increasing energy
                                                    consumption per head. See pp 22-25
                                                    for a discussion of the importance of
                                                    providing ‘more energy’.
65 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

Differences in the fuel mix across regions have an important
influence on the energy transition
Primary energy consumption by region and fuel
Billion toe
                                                   US                                                   EU

                                                China                                                 India





Key points

    Differences in the fuel mix across              In contrast, the share of coal
    regions, and the extent to which                within India declines only modestly,
    that mix changes over the Outlook,              driven by increasing coal
    have an important bearing on the                consumption within the Indian
    energy transition.                              power sector (pp 102-103).

    The two countries accounting for the            The US and EU both start the
    fastest growth in energy demand                 Outlook with relatively diverse
    – India and China – both start with             fuel mixes and, over the Outlook,
    relatively coal-intensive fuel mixes.           share similar trajectories of
                                                    declining shares of coal and
    In the ET scenario, China’s coal                oil offset by increasing use of
    share declines sharply over the                 renewables and, in the US,
    Outlook – falling from 60% in 2017              natural gas.
    to around 35% in 2040 – largely
    offset by increasing shares
    of renewables and natural gas.
    Indeed, in China, the growth of
    non-fossil fuels (renewables plus
    nuclear and hydro power) more
    than matches the entire growth in
    Chinese energy demand over
    the Outlook.

67 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019

The global pattern of energy production is shifting with strong
growth in US supply and slowing growth in China
                                                                               Primary energy supply growth
Primary energy supply by region                                                and regional contributions
Billion toe                                                                    % per annum








Key points

     The global pattern of energy                   The growth of energy production          Russia’s share of global energy
     production is also shifting,                   in China slows markedly relative to      production declines slightly over
     with strong growth in US energy                the past 20 years as China adjusts       the Outlook, largely reflecting
     production and a slowing in                    to a more sustainable pattern of         an edging down in its share
     the expansion of Chinese                       economic growth. Despite this            of global gas production.
     energy supplies.                               slowing, China is the world’s largest    Even so, Russia remains the
                                                    source of growth in energy supplies      world’s largest exporter of
     US energy production increases                 over the Outlook, driven by rapid        oil and gas. The changing
     markedly in the ET scenario,                   growth in renewables and nuclear         global pattern of energy trade
     driven by increases in oil, gas,               power (pp 104-109).                      and imbalances is considered
     and renewables. The US is the                                                           on pp 70-71.
     largest contributor to energy                  The Middle East maintains its role as
     production growth until the                    a key source of energy, supported by
     mid-2020s; after which growth                  the growth of OPEC oil production
     slows as tight oil production                  in the second half of the Outlook
     peaks and gradually declines.                  (pp 86-87), together with an
                                                    expansion in gas production in
                                                    Qatar and Iran (pp 94-95).

69 | BP Energy Outlook: 2019 edition | © BP p.l.c. 2019
You can also read
Next part ... Cancel