The world and the oil and gas industry need to start tackling in earnest climate change, Spencer Dale, group chief economist at supermajor BP, told The Washington Post in an interview published on Tuesday.
"All the climate arguments are real, urgent and important," Dale told The Washington Post's Dino Grandoni.
The longer the industry and the world wait until they start addressing carbon emissions, the more "draconian" changes the global economy will see in the future, according to BP's chief economist.
In its annual BP Energy Outlook published last month, BP said that renewable energy will be the fastest-growing source of energy in the world through 2040, penetrating the energy system "more quickly than any fuel in history" to become the largest source of power by 2040. Renewables are expected to account for some two-thirds of the rise in power generation globally, and their share in the global power sector will grow to around 30 percent by 2040, up from around 10 percent now, according to the BP Energy Outlook.
Despite the forecast that peak oil demand could come in the 2030s, BP noted that under all scenarios oil will continue to play a significant role in the global energy system by 2040. Moreover, "significant levels of investment are required for there to be sufficient supplies of oil to meet demand in 2040," BP said, adding that "In all scenarios, trillions of dollars of investment in oil is needed."
Related: Major Breakthrough Could "Turn Back The Emissions Clock"
However, the outlook also noted that "Global carbon emissions continue to rise, signaling the need for a comprehensive set of policy measures to achieve a substantial reduction in carbon emissions."
"Polices aimed at the power sector are central to achieving a material reduction in carbon emissions over the next 20 years…most of the low-hanging fruit in terms of reducing carbon emissions is outside of the transport sector," Dale said in the press release accompanying the outlook's launch.
A few weeks before publishing the energy outlook, BP said that it would support a call from a group of institutional investors to expand its carbon emissions reporting and to describe how BP's strategy is consistent with the goals of the Paris Agreement, in yet another pledge by Big Oil to start taking investor demands on climate action seriously.
By Tsvetana Paraskova for Oilprice.com
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Comments
While policies to tackle climate change should in no way adversely impact on economic growth, for most countries of the world this differentiation is not a clear-cut one, hence the lagging behind of so many countries.
Mr Spencer dale and the annual BP Energy Outlook could start the ball rolling by correcting some of the claims they made. While renewable energy will be the fastest growing source of energy in the world through 2040 simply because it is starting from a very low base, the claim that it will become the largest source of power by 2040 is very exaggerated. In 2018 renewable energy accounted for only 3.6% of the global primary demand. How long will it take it to overtake oil and natural gas by 2040? Many many years.
Mr Dale and the annual BP Energy Outlook also need to accept that there will be neither a post-oil era nor a peak oil demand throughout the 21st century and probably far beyond. Oil will continue to reign supreme even in the global transport system all through. Even an introduction of 350 million electric vehicles (EVs) by 2040 which is an impossibility will only replace 9% of the oil used in global transport or 11 million barrels a day (mbd) out of 120 mbd used by then. That will never stop the global demand for oil growing. It will only decelerate the rate of growth.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London