The top economist at BP has predicted demand for global oil will start to drop by the late 2030’s.
The world currently consumes around 100 million barrels per day and BP, one of the largest oil firms, estimates demand will increase by a tenth before renewables and technology wean the world off oil.
The oil giant, based in London, has published its annual BP Energy Outlook, claiming ‘increasing environmental pressures on the use of some products, particularly single-use plastics and packaging, dampens growth quite materially relative to past trends.’
Spencer Dale, the chief economist at BP, which last year finished paying out $67 billion in legal settlements for the Deepwater Horizon disaster, said up to 2030 demand will be supported by ‘emerging economies’.
His views may be a word of warning to oil firms, and perhaps back up BP’s recent announcements that it is investing in renewable energy and oil alternatives. But the idea that the world will take its foot off the pedal on oil consumption is ludicrous.
Crude oil demand... is the sun setting on an industry or is it the dawn of an energy era?
By 2030, the world population will be knocking on nine billion. India, China and Nigeria will have huge, and young populations – with rapidly industrialising economies, more ‘middle-class’ expectations and disposable incomes.
The global population will travel more, travel further, and buy more stuff.
Is Dale seriously suggesting that crude oil, the lifeblood of the global economy, will be replaced by renewable energies? His Cassandra calls are only bad news for BP and the other top oil giants.
Oil will be cheaper, and more plentiful than ever before by the middle of the century. The shale gas revolution in America will result in exports of radical drilling technology to other countries, and increased efficiency of renewable alternatives such as solar and wind will diversify the energy market.
The move towards a circular plastics industry is accelerating – recycling technology is becoming cheaper and smarter. There remain serious problems with marine plastics, but the world’s load of waste packaging, if retained, is a raw material for more packaging.
Now the ‘peak oil’ myth is behind us (current reserves of crude could power the world to 2050 at minimum), the oil giants like BP fear the dawn of super-cheap oil. The fracking technology emerging in the mid-west Badlands will allow smaller rival companies to take on the hegemony of Big Oil. Plastics cracker plants are springing up on the Texas coast like groundhogs, as drilling technology makes shale gas values plummet.
Those that pump the crude have little say on where refined products go. If the world still needs kerosene to keep planes in the sky, diesel to power mega-tankers across the oceans, those taps must keep running. Is BP really suggesting the bans on plastic bags, of microns in width, will knock on the need for fuel? Perhaps Elon Musk is going to power his heavy-payload rockets to Mars on electric batteries?
By 2030 or even the end of this century, there will still be jets in the sky, powered by kerosene, lorries moving heavy goods, powered by diesel, and hi-tech plastics saving and improving livelihoods across the world.
The USA is now realistically energy independent. Recycled plastic is nearing virgin polymer prices all the time. The days of the OPEC cartel, along with BP and ExxonMobil calling the shots on the price per barrel will soon be history, but the days of black gold will be dawning for a long time yet.