More people, more wealth, more energy demand—that has been the story of the world’s civilization over the past 250 years, and it is expected to continue.
That is one of the messages from BP chief economist Christof Ruehl, who will lead the lunch debate: Energy markets – the short and the long term (1-2.30pm), at Offshore Europe today.
“The world economy has almost doubled in size over the past 20 years and it’s expected to double again over the next 20,” he says.
With growth comes increased demand for energy. Data collated by BP suggests there will be enough supply to meet that demand—“with the industry consistently finding more oil and gas than it produces over time,” says Ruehl.
“In 1980, companies and governments collectively had proved reserves of just under 700 billion barrels of oil. Today, there are more than 1,600 billion, despite massive consumption over this period.”
Growth in production will be dominated by non-OECD economies, he says, growing to supply 71% of global energy production in 2030, up from 58% in 1990.
The “renaissance” of oil production in North America, “largely due to tight oil or oil contained in shale formations,” as well as growth in biofuels in both the US and Brazil, alongside Canadian heavy oil, together mean North and South America together are set to overtake the Middle East as the world’s largest source of liquid fuels during the current decade. They will retain that position up to 2030, when BP expects the Middle East to catch up again, says Ruehl.
“It is likely that US total liquids production will surpass that of Saudi Arabia and Russia very soon,” he adds.
Natural gas supply, too, is growing rapidly, as it is increasingly used for generating power, as well as in homes and industrial plants, says Ruehl, aided by growth in LNG for transport.
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