Renewable energy is growing faster than other sources, at about 8.2 percent annually, but will make up only 6 percent of energy use by 2030, according to the forecast released Wednesday by BP. Oil, natural gas and coal will still account for 80 percent of global energy use.
Separately, ConocoPhillips CEO James Mulva said in Houston that the need and availability of fossil fuels weigh against government policies he said tax oil and natural gas differently than other energy sources and require utilities to use certain levels of renewables.
“Past assumptions of oil and gas scarcity that went into business strategic plans, government policies and public attitudes are out of date,” Mulva said, speaking Wednesday at a summit hosted by Rice University’s Baker Institute.
BP’s report showed that among fossil fuels, natural gas consumption will grow the fastest, at 2.1 percent per year. Its growth is especially manifest in the U.S., where its share as a power plant fuel has risen while coal’s has steadily declined, from 50 percent in 2005 to 45 percent in 2010.
Technology improvements have allowed drillers to access natural gas in deep, dense shale rock economically for the first time. That has led to a rush on North America’s shale gas fields, leaving a glut of low-priced natural gas in the U.S. market.
“Our entire understanding of North American energy potential is changing,” Mulva said. “Everyone is having to cast aside some old assumptions, such as the one about domestic fossil fuels being in short supply. They are not.”
He said the technology that fueled shale gas production has begun driving a rapid increase in the development of domestic oil fields, too. With natural gas prices low, producers are moving more rigs into fields containing higher-priced crude and natural gas liquids, including the Eagle Ford shale in South Texas and the Bakken shale in North Dakota.
BP said that the increase in world energy demand will occur mostly in emerging nations such as China and India as they look to cheap fossil fuels to power their growth. Slower population growth in developed countries, as well as greater efficiency of appliances, vehicles and machinery, will keep energy consumption stable in the United States and Europe, BP forecast.
Developed countries will put more renewables on the electricity grid, BP said. Fuel efficiency in gasoline- and diesel-powered vehicles will rise, and electric and hybrid vehicles become more common, BP said.
Still, the forecast noted that oil will account for 87 percent of transportation fuels by 2030.
Worldwide, BP projects energy use will grow about 1.6 percent per year, mostly in electricity.
“That’s like adding one more China and one more U.S. to the world’s energy demand by 2030,” CEO Bob Dudley said in prepared remarks in London.
Coal share still growing
Globally, coal’s share of the fuel market will continue growing for a few more years, but the trend will start to reverse by 2020, as a significant portion of power generation shifts from coal to cleaner-burning natural gas, BP said.
Absent any major policies for tackling emissions linked to climate change – such as an international emissions-trading scheme or carbon tax – the continuing dominance of fossil fuels will mean global greenhouse gas emissions will rise 28 percent from 2010 to 2030, according to BP.