Released June 18, 2020 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--BP Plc (NYSE:BP) (London, England) Chief Executive Bernard Looney took the occasion of the oil giant's 69th annual Statistical Review of World Energy, released June 17, to underscore the size and urgency of the global climate change challenge.
In his introduction to the report, Looney noted, "The COVID-19 pandemic may well turn out to be the most tragic and disruptive event that many of us will ever live through. ... This combined health and economic shock is bound to reshape the global economic, political and social environment in which we all live and work. It has the potential to accelerate emerging trends and create opportunities to shift the world onto a more sustainable path."
He continued: "The disruption to our everyday lives caused by the lockdowns has provided a glimpse of a cleaner, lower carbon world: air quality in many of the world's most polluted cities has improved; skies have become clearer. The IEA (International Energy Agency) estimates that global CO2 emissions may fall by as much as 2.6 gigatonnes this year. That has come at considerable cost and as economies restart and our lives return to normal there is a risk that these gains will be lost."
Here's the eye-opener: The BP chief said getting to a net-zero carbon world by 2050 would require "similar-sized reductions in carbon emissions every other year for the next 25 years. This can be achieved only by a radical shift in all our behaviors."
Looney said he is confident the world can get there: "The technologies required to reach net zero exist today -- the challenge is to use them at pace and scale, and I remain optimistic that we can make this happen."
BP executives have for several years included notes of concern about global climate change when issuing its annual statistical report. For more on that, see June 21, 2019, article - BP Executives Review 2018 Global Energy Trends, Sound Alarms and June 26, 2018, article - 'One Step Back': BP Rues Increased Global Coal Use. But this year's report has an added layer of alarm, most likely triggered by the COVID-19's reminder of the fragility of life on our planet.
The dramatic reductions in energy demand caused by COVID-19 have wreaked havoc on BP's business. This week, it announced a second-quarter non-cash after-tax asset-impairment charge of between $13 billion and $17.5 billion, owing mostly to its sharply lowered price expectations for crude oil and natural gas until 2050.
In a news release that was separate from the annual statistical report, the oil giant said it expected Brent crude oil prices to average about $55 per barrel (measured in 2020 dollars) for the next three decades. Natural gas at Henry Hub, Louisiana, is expected to average approximately $2.90 per million British thermal units (MMBtu) over the 2021-2050 period, it projected.
Last week, as the scope of future price deterioration was coming into focus, BP announced plans to cut about 10,000 jobs -- about 14% of its global workforce of 70,000.
The statistical report, which captures global energy use through yearend 2019, contains good news and bad news for the energy industry.
For those with an environmental outlook, Looney noted the "encouraging" news that global demand for renewable energy continued to grow strongly in 2019. Led by wind and solar power, renewable energy increased by a record amount, accounting for more than 40% of the growth in primary energy in 2019, he said. And coal consumption fell for the fourth time in the past six years, with its share in the global energy mix falling to its lowest level for 16 years.
But Looney said other aspects of the energy system "continued to give cause for concern." Despite last year's decline, coal was still the single largest fuel used to generate electricity, accounting for over 36% of the world's electricity generated in 2019. By contrast, renewable energy, despite years of strong growth, accounted for only 10% of electricity generated. "Renewables will need to grow even more strongly over the next three decades to decarbonize the power sector," he said.
Over the last 25 years, oil has suffered declining share of global primary energy use while gas' share has risen.
Click on the image at right to see a breakdown of global primary energy use over the last 25 years, from 1994 through 2019.
The report noted dramatic growth of oil production in North America, mostly driven by the shale revolution, as well as the sharp growth in demand from Asia, for the 25-year period of 1994-2019.
Click on the image at right to see charts showing oil production and demand growth, by region, between 1994 and 2019.
The BP report also documents the striking growth of natural gas production in North America and the Middle East, as well as Asia's rising demand for gas, over the same quarter-century.
Click on the image at right to see charts showing natural gas production and demand growth, by region, between 1994 and 2019.
The report documents global liquefied natural gas (LNG) exports at 485.1 billion cubic meters (bcm), roughly 17.1 trillion cubic feet (Tcf). Of this market, the U.S. has about a 10% share, roughly 47.5 bcm, or about 1.7 Tcf. U.S. LNG exports skyrocketed 66.3% last year, and over the 2008-2018 period, by 39.7%.
The U.S. share of the global LNG export market in 2019 was eclipsed by Qatar (107.1 bcm) and Australia (104.7 bcm). But U.S. LNG exports last year exceeded those of Russia (39.4 bcm), Malaysia (35.1 bcm), and Nigeria (28/8 bcm), the report noted.
Turning to carbon dioxide emissions, the Statistical Review of World Energy report said the world's leading emitters in 2019 were: China (9,825 million metric tons), the U.S. (4,964 million metric tons) and India (2,840 million metric tons). While U.S. emissions declined by about 1.1% per year over the 2008-2018 period, emissions in China rose by about 2.6% annually over that timeframe, and India's emissions rose 5.3% per year.
Looney said he worries about the trend of carbon emissions. "The average annual growth in carbon emissions over 2018 and 2019 was greater than its 10-year average," he noted. "As the world emerges from the COVID-19 crisis it needs to make decisive changes to move to a more sustainable path."
He concluded: "At BP, we are committed to playing our part. In February, we adopted a new purpose -- to reimagine energy for people and our planet. And we announced a new ambition, to be a net-zero company by 2050 or sooner, and to help the world get to net zero."
"The experience of COVID-19 has only reinforced our commitment to this purpose and ambition," he continued, "by highlighting both the fragility of our planet and the opportunities it provides to truly build back better."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
In his introduction to the report, Looney noted, "The COVID-19 pandemic may well turn out to be the most tragic and disruptive event that many of us will ever live through. ... This combined health and economic shock is bound to reshape the global economic, political and social environment in which we all live and work. It has the potential to accelerate emerging trends and create opportunities to shift the world onto a more sustainable path."
He continued: "The disruption to our everyday lives caused by the lockdowns has provided a glimpse of a cleaner, lower carbon world: air quality in many of the world's most polluted cities has improved; skies have become clearer. The IEA (International Energy Agency) estimates that global CO2 emissions may fall by as much as 2.6 gigatonnes this year. That has come at considerable cost and as economies restart and our lives return to normal there is a risk that these gains will be lost."
Here's the eye-opener: The BP chief said getting to a net-zero carbon world by 2050 would require "similar-sized reductions in carbon emissions every other year for the next 25 years. This can be achieved only by a radical shift in all our behaviors."
Looney said he is confident the world can get there: "The technologies required to reach net zero exist today -- the challenge is to use them at pace and scale, and I remain optimistic that we can make this happen."
BP executives have for several years included notes of concern about global climate change when issuing its annual statistical report. For more on that, see June 21, 2019, article - BP Executives Review 2018 Global Energy Trends, Sound Alarms and June 26, 2018, article - 'One Step Back': BP Rues Increased Global Coal Use. But this year's report has an added layer of alarm, most likely triggered by the COVID-19's reminder of the fragility of life on our planet.
The dramatic reductions in energy demand caused by COVID-19 have wreaked havoc on BP's business. This week, it announced a second-quarter non-cash after-tax asset-impairment charge of between $13 billion and $17.5 billion, owing mostly to its sharply lowered price expectations for crude oil and natural gas until 2050.
In a news release that was separate from the annual statistical report, the oil giant said it expected Brent crude oil prices to average about $55 per barrel (measured in 2020 dollars) for the next three decades. Natural gas at Henry Hub, Louisiana, is expected to average approximately $2.90 per million British thermal units (MMBtu) over the 2021-2050 period, it projected.
Last week, as the scope of future price deterioration was coming into focus, BP announced plans to cut about 10,000 jobs -- about 14% of its global workforce of 70,000.
The statistical report, which captures global energy use through yearend 2019, contains good news and bad news for the energy industry.
For those with an environmental outlook, Looney noted the "encouraging" news that global demand for renewable energy continued to grow strongly in 2019. Led by wind and solar power, renewable energy increased by a record amount, accounting for more than 40% of the growth in primary energy in 2019, he said. And coal consumption fell for the fourth time in the past six years, with its share in the global energy mix falling to its lowest level for 16 years.
But Looney said other aspects of the energy system "continued to give cause for concern." Despite last year's decline, coal was still the single largest fuel used to generate electricity, accounting for over 36% of the world's electricity generated in 2019. By contrast, renewable energy, despite years of strong growth, accounted for only 10% of electricity generated. "Renewables will need to grow even more strongly over the next three decades to decarbonize the power sector," he said.
Over the last 25 years, oil has suffered declining share of global primary energy use while gas' share has risen.
The report noted dramatic growth of oil production in North America, mostly driven by the shale revolution, as well as the sharp growth in demand from Asia, for the 25-year period of 1994-2019.
The BP report also documents the striking growth of natural gas production in North America and the Middle East, as well as Asia's rising demand for gas, over the same quarter-century.
The report documents global liquefied natural gas (LNG) exports at 485.1 billion cubic meters (bcm), roughly 17.1 trillion cubic feet (Tcf). Of this market, the U.S. has about a 10% share, roughly 47.5 bcm, or about 1.7 Tcf. U.S. LNG exports skyrocketed 66.3% last year, and over the 2008-2018 period, by 39.7%.
The U.S. share of the global LNG export market in 2019 was eclipsed by Qatar (107.1 bcm) and Australia (104.7 bcm). But U.S. LNG exports last year exceeded those of Russia (39.4 bcm), Malaysia (35.1 bcm), and Nigeria (28/8 bcm), the report noted.
Turning to carbon dioxide emissions, the Statistical Review of World Energy report said the world's leading emitters in 2019 were: China (9,825 million metric tons), the U.S. (4,964 million metric tons) and India (2,840 million metric tons). While U.S. emissions declined by about 1.1% per year over the 2008-2018 period, emissions in China rose by about 2.6% annually over that timeframe, and India's emissions rose 5.3% per year.
Looney said he worries about the trend of carbon emissions. "The average annual growth in carbon emissions over 2018 and 2019 was greater than its 10-year average," he noted. "As the world emerges from the COVID-19 crisis it needs to make decisive changes to move to a more sustainable path."
He concluded: "At BP, we are committed to playing our part. In February, we adopted a new purpose -- to reimagine energy for people and our planet. And we announced a new ambition, to be a net-zero company by 2050 or sooner, and to help the world get to net zero."
"The experience of COVID-19 has only reinforced our commitment to this purpose and ambition," he continued, "by highlighting both the fragility of our planet and the opportunities it provides to truly build back better."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
