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BP Energy Outlook 2035 expects energy demand growth

BP's Energy Outlook 2035 shows growth in the energy market despite current market weakness
BP Energy Outlook 2035 expects energy demand growth

Despite the dramatic weakening in global energy markets, ongoing economic expansion in Asia, particularly in China and India, will drive continued growth in the world’s demand for energy over the next 20 years. Global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4% a year according to the new edition of the BP Energy Outlook 2035.

US tight oil grows

The Outlook projects that demand for oil will increase by around 0.8% each year to 2035, with demand rising solely from non-OECD countries.

In 2014, tight oil production drove US oil output higher by 1.5 MMbpd. But further out, the growth in tight oil is likely to slow and Middle East production will gain ground once more.

By the 2030s the US is likely to have become self-sufficient in oil, after having imported 60% of its total demand as recently as 2005.

Gas rising fast; coal slow

Demand for natural gas will grow fastest of the fossil fuels over the period to 2035, increasing by 1.9% a year, led by demand from Asia. Half the increased demand will be met by rising conventional gas production, primarily in Russia and the Middle East, and about a half from shale gas. By 2035, North America, which currently accounts for almost all global shale gas supply, will still produce around three quarters of the total.

Coal, on the other hand, is seen as the slowest growing fossil fuel, growing by 0.8% a year, according to the Outlook. The change is driven by three factors: moderating and less energy-intensive growth in China; the impact of regulation and policy on the use of coal in both the US and China; and the plentiful supplies of gas helping to squeeze coal out from power generation.

LNG grows, becoming dominant in trade

As demand for gas grows, there will be increasing trade across regions and by the early 2020s Asia Pacific will overtake Europe as the largest net gas importing region, with an overwhelming majority of the increase in traded gas to be met through increasing LNG supplies.

Production of LNG will show dramatic growth over the rest of this decade, with supply growing almost 8% a year through the period to 2020. This also means that by 2035 LNG will have overtaken pipelines as the dominant form of traded gas.

Energy flowing east

The combination of increased oil and gas supplies in the US, North American trends in energy self-sufficiency, and lower demand in the US and Europe due to improving energy efficiency and lower growth will combine with continuing strong economic growth in Asia to shift the energy flows increasingly from west to east.

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