BP Says the Era of Oil-Demand Growth Is Over

[bluefete]

BP Says the Era of Oil-Demand Growth Is Over

(Bloomberg) -- BP Plc said the relentless growth of oil demand is over, becoming the first supermajor to call the end of an era many thought would last another decade or more.

Oil consumption may never return to levels seen before the coronavirus crisis took hold, BP said in a report on Monday. Even its most bullish scenario sees demand no better than “broadly flat” for the next two decades as the energy transition shifts the world away from fossil fuels.




BP is making a profound break from orthodoxy. From the bosses of corporate energy giants to ministers from OPEC states, senior figures from the industry have insisted that oil consumption will see decades of growth. Time and again, they have described it as the only commodity that can satisfy the demands of an increasing global population and expanding middle class.

The U.K. giant is describing a different future, where oil’s supremacy is challenged, and ultimately fades. That explains why BP has taken the boldest steps so far among peers to align its business with the goals of the Paris climate accord. Just six months after taking the top job, Chief Executive Officer Bernard Looney said in August he’d shrink oil and gas output by 40% over the next decade and spend as much as $5 billion a year building one of the world’s largest renewable-power businesses.

That’s because he suspects oil use may already have peaked as a result of the pandemic, stricter government policies and changes in consumer behavior. BP’s energy outlook shows consumption slumping 50% by 2050 in one scenario, and by almost 80% in another. In a “business-as-usual” situation, demand would recover but then flatline near 100 million barrels a day for the next 20 years.

Read: BP Walks Away From the Oil Supermajor Model It Helped Create

BP isn’t the only big oil company adapting its business to the energy transition. Royal Dutch Shell Plc, Total SE and others in Europe have announced similar pivots toward cleaner operations as customers, governments and investors increasingly call for change.

Three Possible Futures

BP’s report comes ahead of three days of online briefings starting Monday on its clean-energy and climate strategy. The study considers three scenarios, which aren’t predictions but nevertheless cover a wide range of possible outcomes over the next 30 years and form the basis of the new strategy Looney announced in August.

The “Rapid” approach sees new policy measures leading to a significant increase in carbon prices. The “Net Zero” course reinforces Rapid with big shifts in societal behavior, while the “Business-as-usual” projection assumes that government policies, technology and social preferences continue to evolve as they have in the recent past.

See also: New EU Climate Plan Brings End of the Combustion Engine Closer

In the first two scenarios, oil demand falls as a result of the coronavirus, the report shows. “It subsequently recovers but never back to pre-Covid levels,” according to Spencer Dale, BP’s chief economist. “It brings forward the point at which oil demand peaks to 2019.”

That contrasts with what many others are forecasting. Russell Hardy, chief executive officer of trading giant Vitol Group, said on Monday that oil demand is poised for 10 years of growth before a steady decline. He predicts consumption will return to pre-virus levels by the end of next year.

BP’s outlook last year contained a scenario called “More energy,” which had oil demand growing steadily to about 130 million barrels a day in 2040. There’s no such scenario this time.

“Demand for oil falls over the next 30 years,” BP said in the report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”

Covid Impact

The pandemic shattered oil consumption this year as countries locked down to prevent infections from spreading. While demand has since improved, and crude prices with it, the public health crisis is still raging in many parts of the world and the outlook remains uncertain in the absence of a vaccine.

The impact, including lasting behavioral changes like increased working from home, will affect economic activity and prosperity in the developing world, and ultimately demand for liquid fuels, according to BP. That means it won’t be able to offset already falling consumption in developed countries.

Demand for liquid fuels is seen falling to less than 55 million barrels a day by 2050 in BP’s Rapid scenario, and to around 30 million a day in Net Zero. The drop is mostly in developed economies and in China. In India, other parts of Asia and Africa, demand remains broadly flat in the first scenario but slips below 2018 levels from the mid-2030s in the second.

Other points in the energy outlook:

The Rapid scenario has carbon emissions from energy use falling by around 70% by 2050, while they drop by more than 95% in Net Zero. Business-as-usual sees them peaking in the mid-2020s.Demand for all primary energy -- the raw materials from which energy is derived -- increases by about 10% in Rapid and Net Zero in the period, and by around 25% in the third scenario.In Rapid, non-fossil fuels account for the majority of global energy from the early 2040s.Growth in China’s energy demand slows sharply relative to past trends, reaching a peak in the early 2030s in all three scenarios.Renewable energy -- excluding hydro -- increases more than 10-fold in both Rapid and Net Zero, with its share in primary energy rising from 5% in 2018 to more than 40% by 2050 in Rapid and almost 60% in Net Zero.Natural gas consumption is seen broadly unchanged to 2050 in Rapid and around 35% higher in business-as-usual. Demand falls by about 40% by 2050 in Net Zero.

(Updates with BP briefings in the seventh paragraph, Vitol CEO comments in the 10th.)

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©2020 Bloomberg L.P.

https://www.yahoo.com/finance/news/bp-s ... 00653.html

[Dohplaydat]

Lots of journalists and industry experts say this, but this is one of the first times a big oil company is saying it which is indicative that this is true.

[Les Bain]

Don't mind the proof and talk has been around at least 2 decades, a lot of governments will be running around now bawling 'oh gosh.'

[Redman]

Well BP talking their book justifying their belief...that said there is quite a bit of money in the ground.

[MG Man]

Well BP talking their book justifying their belief...that said there is quite a bit of money in the ground.

it's only money if there's demand

[bluefete]

Don't get fooled by BP.

BP is headquartered in the UK. The UK and other European governments have passed legislation that will make gasoline powered vehicles obsolete.

BP is just falling in line.

https://www.bbc.com/news/science-enviro ... 0by%202050.

EDITED:

Petrol and diesel car sales ban brought forward to 2035
4 February 2020

A ban on selling new petrol, diesel or hybrid cars in the UK will be brought forward from 2040 to 2035 at the latest, under government plans.

The change comes after experts said 2040 would be too late if the UK wants to achieve its target of emitting virtually zero carbon by 2050.

In a statement made ahead of the launch, Mr Johnson said the ban on selling new petrol and diesel cars would come even earlier than 2035, if possible.

Hybrid vehicles are also now being included in the proposals, which were originally announced in July 2017.

People will only be able to buy electric or hydrogen cars and vans, once the ban comes into effect.

The change in plans, which will be subject to a consultation, comes after experts warned the previous target date of 2040 would still leave old conventional cars on the roads following the clean-up date of 2050.

The Scottish government does not have the power to ban new petrol and diesel cars but has already pledged to "phase out the need" for them by 2032 with measures such as an expansion of the charging network for electric cars.

Mr Johnson said the 2050 pledge was necessary because the UK's "historic emissions" meant "we have a responsibility to our planet to lead in this way".

(You can also check this timeline from Wikipedia.)

https://en.wikipedia.org/wiki/Phase-out ... l_vehicles

[MG Man]

I sense a disconnect between 'reading' and 'comprehension' in your comment

[bluefete]

LOL. Not really.

BP is repositioning itself for the new realities in its external environment.

Take it anyhow you want.

[bluefete]

Meanwhile in T&T:

https://guardian.co.tt/business/major-o ... 68889020b4

Curtis Williams

Lead Editor Business

curtis.williams@guardian.co.tt

Prime Minister Dr Keith Rowley is expected to make a major announcement on oil and gas exploration success when he holds a news conference at the Diplomatic Centre this morning.

Sources have confirmed that the Prime Minister will reveal the good news at a joint news conference with the President BHP Billiton Trinidad, Vince Pereira and Minister of Energy Franklin Khan.

According to a media invite a live virtual press conference will be held to discuss the Return of the Invictus Deep Water drillship and the Drilling of the BHP deepwater Well Broadside- 1.

Earlier this year BHP’s Vice President, Exploration Sonia Scarselli in an exclusive interview with the Business Guardian spoke extensively about the Broadside well.

Scarselli said Broadside 1 would target a much deeper horizon.

She said: “So we will penetrate the shallowness of that interval where we encountered oil seeps in the Le Clerc and Victoria wells but we will now go drilling deeper than we have done in the past. Since we have a much larger understanding, a better understanding of the full hydrocarbon systems and potential for the area. In the Le Clerc well we encountered the oil seeps. So part of the well we will drill the next couple of months it is to test this oil potential.”

Scarselli said in the original Le Clerc well, the plan was to drill to relatively shallow depth but when there was gas and then oil seeps were found so the company decided to continue drilling given that it was a frontier basin and wild-cat exploration it wanted to take as much information as it could from the well and only stopped when the pressure came too much to continue. So now they have a better understanding of the geology BHP will take another look at the acreage.

BHP’s vice president, Exploration, said in the case of the North the company does not expect to find oil because she believes that the source rock is over mature.


Transocean deep water Invictus drillship.


“We tested that so we don’t expect to find any lead with that. In the South is a different story, so in the South, because we encountered the shallow section was biogenic so it was locally sourced. So expect to go deeper to find oil because we don’t think the oil has migrated shallow enough. It takes a certain amount of time for the oil to migrate through the rocks and because of the level of maturity in the south we don’t think it has migrated that shallow yet,” Scarselli said.

She said there are similarities and differences in the Guyana and T&T deep water and the company incorporated the information from Guyana to a mega-regional view of the basin. She said the source rock we have in T&T deepwater is a Cretaceous source rock in the Cenonian age which is similar to what there is in Guyana and most of the Central Atlantic.

She noted, however, in terms of the fold of play, there are differences. “There are differences in water systems and age compared with where we are looking, the main difference is the age of maturity of the source rock in Guyana vs T&T. So certainly we’ll learn a lot from the experience there but we’re also looking at different petroleum system overall,” Scarselli said.

Scarselli said BHP’s strategy is to target tier-one opportunities. She explained: “We want to find the traps so we can deliver multiple hundred million barrels of discovery. So that is like really the minimum threshold that we are looking and it could be a set of multiple traps that can deliver this amount. Normally when you open a new play you can find maybe some larger traps and smaller traps but necessarily you need to have quite a large amount to move forward with the development, because we are targeting large trap we are looking for the deepwater it is sort of numbers we are talking about,” Scarselli ended.

Today we will find out the extend of their success.

[88sins]

We should have been looking into new ways to earn revenue 3 decades ago, but nah, it easier to sit and pound a table top & cyak about constitutional reform & diversification every 5 years while simultaneously doing absolutely nothing. Tourism, agriculture, tech, labor markets, all these are things that we could have gotten into as a means of diversification of our economy, and still can, but the twits at the helm too busy lining their pockets & fixin their people to think about this.

On the upside tho, by the time when most larger countries completely abandon oil & gas as energy sources those small nations that still going to be using fossil fuels for the longer term will be able to buy it on the cheap.

[sMASH]

We should have been looking into new ways to earn revenue 3 decades ago, but nah, it easier to sit and pound a table top & cyak about constitutional reform & diversification every 5 years while simultaneously doing absolutely nothing. Tourism, agriculture, tech, labor markets, all these are things that we could have gotten into as a means of diversification of our economy, and still can, but the twits at the helm too busy lining their pockets & fixin their people to think about this.

On the upside tho, by the time when most larger countries completely abandon oil & gas as energy sources those small nations that still going to be using fossil fuels for the longer term will be able to buy it on the cheap.

problem is, for the producers. because demand is low, prices will bottom out. look at what happened before the covid, without any mass increase of non fossil energy sources, the prices went rock bottom. so much so, it was cheaper to pay people to take it. when the giant users transition more to renewable, the price will not make it any big earner...
i think, it will be like film photography, it will have its market, but very niche for those specific cases, like a local supplier of cooking fuel.

the AUM plant and the new CGCL plant are steps in the right direction. to not sell the raw material, but to sell derivatives, that are intermediate materials for other goods.
like, dont sell the dinosaur juice/gas, and dont sell plastic chairs, but refine and sell the intermediary material to make the plastic chairs.

3d printing is getting bigger, we can look towards producing different materials for those devices.

[MG Man]

why plant a tree when you will die before it provides shade for your own benefit??

[Redman]

There will be demand for various grades of oil for the transportation Aviation, plastics, alongside the reversion to whatever economic growth is possible in this new normal....

The world isnt coming to an end.

So BP can be correct in its quantities demanded in oil... AND oil be priced around high enough to be great business.

For efficient producers...

[sMASH]

^^ when some people set their prices, some angola or nigeria or iran or syria will jump out and undercut, bussing the market... is like, goin to the market to buy tomatoes, and every body selling tomatoes. and before u reach the market, u buy from a b11 park up outside.

[Redman]

Cept it isnt tomatoes

And in the real world -it isnt a simple thing...unless one needs to be simplistic.

[sMASH]

Cept it isnt tomatoes

And in the real world -it isnt a simple thing...unless one needs to be simplistic.

balisier juice economic outlook.
before the covid, the part of petrotrin that sold the crude,, heritage i think, how did that perform again.... projected vs reality..

[Redman]

Cept it isnt tomatoes

And in the real world -it isnt a simple thing...unless one needs to be simplistic.

balisier juice economic outlook.
before the covid, the part of petrotrin that sold the crude,, heritage i think, how did that perform again.... projected vs reality..

Aha....if that is your thought process...then carry on.

[88sins]

why plant a tree when you will die before it provides shade for your own benefit??

A picture perfect example of classic trini politician logic.
the idea that it might be the right or smart thing to do for the benefit of future generations evades them

[sMASH]

Cept it isnt tomatoes

And in the real world -it isnt a simple thing...unless one needs to be simplistic.

balisier juice economic outlook.
before the covid, the part of petrotrin that sold the crude,, heritage i think, how did that perform again.... projected vs reality..

Aha....if that is your thought process...then carry on.

all i can do is bump gum on tuner, i in no position to change or influence any ting. going with the flow par the course

[bluefete]

why plant a tree when you will die before it provides shade for your own benefit??

I sense that forward thinking is not your strong point. You will do well in T&T politics.

[88sins]

why plant a tree when you will die before it provides shade for your own benefit??

I sense that forward thinking is not your strong point. You will do well in T&T politics.

You not used to looking up at all are you?
That sarcasm went right over your head and you didn't even know it

[Duane 3NE 2NR]

[MG Man]

why plant a tree when you will die before it provides shade for your own benefit??

I sense that forward thinking is not your strong point. You will do well in T&T politics.

You not used to looking up at all are you?
That sarcasm went right over your head and you didn't even know it

he too busy straining his back trying to lick is own peepee

[bluefete]

why plant a tree when you will die before it provides shade for your own benefit??

I sense that forward thinking is not your strong point. You will do well in T&T politics.

You not used to looking up at all are you?
That sarcasm went right over your head and you didn't even know it

he too busy straining his back trying to lick is own peepee

Good to see that you have not lost your acidity over the years or is it something about the 20-50 oil you use?