BP Predicts Natural Gas Will Be World’s Main Fossil Fuel By 2040

British Petroleum anticipates that natural gas will take over oil as the world’s main fossil fuel energy source by the year 2040, according to a new report by Reuters.

“We see it (gas) take over from coal in the early 2030s... We think there is a very good case for gas actually overtaking oil post 2040 or just before 2040,” Dominic Energy, BP’s VP for strategic planning said during a conference in Vienna on Wednesday.

Demand growth for gas—in just China alone—will rise 15 percent year-over-year, while global demand increases by 1.6 percent annually for a number of years. The oil demand curve, on the other hand, will slow to 0.8 percent growth in the meantime.

“We do see a very strong chance that (gas) is going to be the largest source of primary energy into the future... By gas we mean natural gas, but also ... we mean biogas, we mean biomethane, we mean power-to-gas...”

A previous forecast by the U.K.-based company said oil’s share of global fossil fuel markets would shrink from 33 percent to 30 percent by 2035. Most of the gains would go to natural gas, which is considered better to the environment due to lower carbon emissions.

“Once (methane leakage) exceeds 3 percent it means that gas, certainly in the nearer term, over a few decades, is actually worse than coal from a (greenhouse gas) perspective,” he said.

Related: What's Behind Canada's Oil Driller Exodus?

“We’re getting a lot of pressure..., and rightly so, to get our act together in terms of managing methane in the supply chain. There are not only climate benefits for doing it but also economic benefits from doing it.”

BP CEO Bob Dudley said last year that 2017 had been a turning point for the company after the Deepwater Horizon disaster. "It feels like we are now dealing with the same problems that everyone else has," he said. The company has continued to invest in large-scale projects and has worked to improve efficiencies to lower its breakeven point. It also has boasted a 40-percent decline in its production costs since 2014. Its production last year averaged 3.6 million bpd.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:

• Iran, Qatar Crude Exports To Asia Are Tanking
• The Biggest Threat To U.S. Oil Exports
• Oil Prices Fall After Strong Crude Inventory Build