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BP predicts coal will be slowest growing major fuel

World Coal,


In its Energy Outlook through to 2035, BP research suggests that global energy demand will grow, but that the growth is continually slowing and driven primarily by emerging economies.

China and India will lead growth of energy demand, as global energy consumption is expected to increase by 41% from 2012 to 2035 – compared to 55% over the last 23 years and 30% over the last ten. 95% of this growth is expected to come from emerging economies, while energy use in advanced economies of North America, Europe and Asia is expected to grow slowly, and begin to decline in the latter years of the forecast period.

Among fossil fuels, it is gas that looks set to grow fastest, increasingly used as an alternative to coal for power generation.

Global energy demand

Bob Dudley, BP Group chief executive, said the outlook led to three main questions: “is there enough energy to meet growing demand? Can we meet demand reliably? And what are the consequences of meeting demand? In other words, is the supply sufficient, secure and sustainable?”

“On the first question, our answer is a resounding ‘yes’,” Dudley said. “The growth rate for global demand is slower than what we have seen in previous decades, largely as a result of increasing energy efficiency. Trends in global technology, investment and policy leave us confident that production will be able to keep pace. New energy forms such as shale gas, tight oil, and renewables will account for a significant share of the growth in global supply.”

On the question of security, the Outlook offers a mixed, though broadly positive, view. Among today’s energy importers, the United States is on a path to achieve energy self-sufficiency, while import dependence in Europe, China and India will increase. Asia is expected to become the dominant energy importing region. Dudley noted: “This need not be a cause for concern if the market is allowed to do its work, with new supply chains opening up to these big consuming regions.”

On the question of sustainability, global carbon dioxide emissions are projected to rise by 29%, with all of the growth coming from the emerging economies. The Outlook notes some positive signs: emissions growth is expected to slow as natural gas and renewables gain market share from coal and oil; and emissions are expected to decline in Europe and the US. Indeed towards the end of the period covered by the Outlook we expect many advanced countries will be seeing their economies grow while their energy use falls.

Coal’s future in the global energy mix

For coal, the future according to BP’s outlook is not as positive as some industry professionals may hope. After oil, coal is expected to be the slowest growing major fuel, with demand rising at an average 1.1%/year to 2035. Over the period, growth flattens to just 0.6% a year after 2020. Nearly all (87%) of the net growth in demand to 2035 will likely come from China and India, whose combined share of global coal consumption will rise from 58% in 2012 to 64% in 2035.

In it’s Medium-Term Coal Market Report, the International Energy Agency (IEA), predicted a stronger growth in coal demand than the one forecast by BP in the years prior to 2020. The IEA’s report noted that, despite abnormally weak coal demand from the US and China, coal exhibited the largest demand growth of all fossil fuels in 2012, growing to 7697 million t (a 2.3% increase on 2011). However, the IEA now expects coal demand to rise by only 2.3% to 2018, down from a predicted 2.6% in last year’s report.

As Harry-Kenyon Slaney opined in the December issue of World Coal, the future of coal will depend on the industry’s ability to strip out inefficiencies and reduce input costs. In order to do this, “industry and government will need to work closely together over an extended period of time.” 

Edited from various sources by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/17012014/the_future_of_coal_414/


 

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