GLOBE-Net, February 20, 2012 - The global energy sector is undergoing a fundamental transformation due to technological innovation, supply fluctuations, and changing economic, regulatory, social, and political landscapes. How will it all play out and how will it affect us?

These are some of the energy related issues that will be discussed at GLOBE 2012 on March 14-16 when the  leaders of some of the world's largest energy companies discuss the future of the global energy market.

Some insights may be gained from BP's 2030 Energy Outlook released last month.

According to these forecasts global energy demand will continue to grow over the next twenty years, albeit at a slowing annual rate, fuelled by economic and population growth in non-OECD countries. Increased energy efficiency and strong growth for renewable energy are also forecast in the Energy Outlook.

"This report is by turns challenging, fascinating and stimulating for anyone in the energy business. It helps us to be both realistic and optimistic. It shows there are things we can't change - like the underlying drivers of energy demand - and things we can change - like the way we satisfy that demand." BP chief executive Bob Dudley

Global energy demand is likely to grow by 39 per cent by 2030, or 1.6 per cent annually, almost entirely in non-OECD countries; consumption in OECD countries is expected to rise by just 4 per cent in total over the period.

Not surprisingly, global energy will remain dominated by fossil fuels, which are forecast to account for 81 per cent of global energy demand by 2030, down about 6 per cent from current levels.

The period should also see increased fuel-switching, with more gas and renewables use at the expense of coal and oil. That gradual switching should see renewables, including biofuels, continue to be the fastest growing sources of energy globally, rising at an annual clip of more than 8 per cent, much quicker even than natural gas, the fastest growing fossil fuel at about 2 per cent a year over the period to 2030.

"The main message is that we need to have an open, competitive energy sector, which encourages innovation and thereby maximises efficiency in order to enjoy energy that is sufficient, secure and sustainable into the future," said BP chief executive Bob Dudley.

BP chief economist Christof Rühl argues that the impact of globalization and competition will continue to deliver a remarkable convergence in energy intensity around the world, a measure of energy use per unit of national economic output.

The growth of unconventional supply, including US shale oil and gas, Canadian oil sands, and Brazilian deepwaters, against a background of a gradual decline in oil demand, will see the Western Hemisphere become almost totally energy self-sufficient by 2030.

This means that growth in the rest of the world, principally Asia, will depend increasingly on the Middle East in particular for its growing oil requirements.

Oil, the world's leading fuel today, will continue to lose market share throughout the period although demand for hydrocarbon liquids will still reach 103 million barrels per day (b/d) in 2030, up by 18 per cent from 2010. This means the world will still need to bring on enough liquids - oil, biofuels and others - to meet that forecast 16 million b/d of extra demand by 2030 and replace declining output from existing sources.

While coal is expected to continue gaining market share in the current decade, growth will wane in the 2020-30 decade; gas growth will remain steady and non-fossil fuels are likely to contribute nearly half of the growth after 2020.

Power generation is expected to be the fastest growing user of energy in the period to 2030, accounting for more than half the total growth in primary energy use. And it is in the power sector where the greatest changes in the fuel mix are expected. Renewables, nuclear and hydro-electric should account for more than half the growth in power generation.

This year's Energy Outlook 2030 examines in more detail several important facets of the global energy story: the pathways for economic development and energy demand in China and India; the factors impacting the energy export prospects of the Middle East; and the "drivers" of energy consumption in road transportation.

In China, growth of energy use is expected to slow significantly after 2020 as the economy matures. Although India's population is on track to exceed China's, its energy growth path is unlikely to replicate China's energy intensive growth path. It will more than double its energy use to 2030, heavily based on coal, but this will still result in consumption of some 1.3 billion tonnes of oil equivalent (toe), or just over one quarter of China's total.

There will remain a heavy reliance on higher oil exports from Middle East OPEC countries to meet demand. BP's analysis suggests that the Middle East countries have the capability to bring on the required new production to meet global demand, even though the region's energy use per capita is expected to remain more than three times as high as the rest of the non-OECD world.

BP says it expects to see steady progress in longstanding efforts to displace oil with gas and to improve the efficiency of energy use within the region.

Saudi Arabian, Iraqi, and regional production of gas-related liquids will dominate supply growth as the region's share of global oil supply rises to 34 per cent by 2030.

Transportation is likely to be the slowest growing sector for global energy consumption; significant improvements in fuel efficiency, including hybridization of vehicles will partly offset continued strong growth in vehicle sales in emerging markets.

Hybrid vehicles (including plug-ins) offer consumer flexibility and appear capable of meeting anticipated fuel economy targets in 2030; oil is likely to account for 87 per cent of transport sector energy use, down from 95 per cent today, with biofuels filling most of the gap, and accounting for seven per cent of transport sector energy use.

Global CO2 emissions are likely to rise by about 28 per cent by 2030 - slower than the current rate of energy demand growth due to the rapid growth of renewables and natural gas. If more aggressive policies than currently envisioned are introduced, global CO2 emissions could begin to decline by 2030.

The U.S. plays a big part in BP's 2030 Energy Outlook. BP predicts that renewable energy will increase from 3% to 10% in the U.S. by 2030, as oil use declines from 36% to 28%.

By 2030 today's energy importers will need to import 40 per cent more than they do today, but the experience will vary by region. In North America, efforts to reduce dependence on foreign supplies should show impressive results in the next couple of decades.

Bolstered by supply growth from biofuels as well as unconventional oil and gas, North America's energy deficit will turn into a small surplus by 2030.

China's energy deficit across all fuels will widen by more than a factor of five and India's, mainly of oil and coal, will more than double in the period to 2030. 

The BP Energy Outlook 2030 is available online at www.bp.com/Energyoutlook2030.

Energy Dialogue: Collaboration & Innovation for the 21st Century

Don't miss this opportunity to hear from the leaders of the world's top energy companies as they forecast what the gloable energy market will look like in the years ahead and how it will affect you. Confirmed Participants include: 

Velma McColl, Principal, Earnscliffe Strategy Group, Canada (Moderator)

Lars Christian Bacher, President and CEO, Statoil Canada Ltd., Canada 

Eric Marsh, President, Encana Natural Gas Inc. & Executive Vice President, Encana Corp., USA 

James Rogers, Chairman, President & CEO, Duke Energy, USA 

Murray Edwards, Vice Chairman, Canadian Natural Resources Ltd., Canada (To be confirmed)