As the global supply glut continues to keep oil prices at the lowest prices in years, it seems that everyone is focused on the future of the commodity.
In it’s 2016 energy outlook, oil giant BP predicted the US will be “energy self-sufficient” by 2021 and oil self-sufficient by 2030.
The difference here being that oil is used for products outside of just power, such as plastics, so oil independence will come shortly after energy independence.
According to the report, much of this independence will be a function of a global shift, adopting more renewable energy and the growing impact of shale drilling.
“The big winner in the ‘faster transition’ case is renewables, with an almost six-fold increase in output (nearly 9% p.a.) and a 15% share of energy by 2035,” said the report. “The rate at which renewables gain share from 2020 to 2035 matches oil’s gain over the 15 years of 1908-23 — years that included the Texas oil boom, the discovery of oil in the Middle East, the British Navy switching to oil, and the Model T Ford starting mass motorization.”
Despite this, BP said that oil consumption will be driven mostly by emerging economies, and natural gas consumption will continue to climb.
The company also made a number of other huge predictions including:
- “EU energy demand in 2035 is back to where it was 50 years earlier, despite the economy being almost 150% bigger.”
- “By 2035 coal accounts for less than 25% of primary energy, its lowest share since the industrial revolution.”
- Renewables account for a quarter of global primary energy growth out to 2035, and over a third of the growth in global power generation.
- “China adds more renewable power over the Outlook than the EU and US combined.”
BP said the biggest danger to the downside for their outlook is slower than expected GDP growth; and to the upside, the possibility of a quicker than projected adoption of renewable energy.