With energy demand projected to keep rising, the global energy challenge is set to become increasingly complex​

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The Challenge


Energy demand is linked to population and economic growth. The world’s population is projected to increase by 1.4 billion over the next 20 years, while its real income is likely to grow by 100% over the same period. This combination of factors is expected to increase world primary energy consumption by as much as 40% over the next 20 years1 with non-OECD energy consumption as much as 70% higher by 2030. Energy and climate policies, efficiency gains and a long-term structural shift in fast-growing economies away from industry towards less energy-intensive activities may act to restrain consumption and result in lower growth, but the overall trend is likely to be one of strong growth in energy demand.​

While energy is available to meet growing demand, action is required to limit the volumes of carbon dioxide (CO2) and other greenhouse gases being emitted through energy use. Plus, there are air quality and other local concerns associated with the combustion of hydrocarbons.

Energy security represents a challenge in its own right. More than half of the world’s natural gas is in just three countries, and more than 80% of global oil reserves are in 10 countries, most of which are located well away from the hubs of energy consumption.



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Why there isn't an easy solution

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The epic challenge of the 21st century is filling the gap between energy supply and demand with clean, reliable and inexpensive energy. While new sources of energy are gradually changing the landscape, products made from fossil fuels continue to heat our homes, fuel our cars and power our computers. Despite extraordinary advances in technology, rapid economic growth in countries like China and India will require more energy. Some solutions are being implemented today, but many will come from the next generation of entrepreneurs, engineers and scientists. In order to rise to this grand challenge, we must consider the following issues:

• Encouraging Growth of Alternative Energy Sources

• New Transportation Technologies

• Reducing Environmental Impact

• Increasing Energy Efficiency

• Recruiting the Next Generation of Engineers and Scientists
   

​​Meeting the challenge



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Energy efficiency


Saving energy through greater efficiency addresses several issues at once. It helps with affordability – because less energy is needed. It helps with security - because it reduces dependence on imports. And it helps with sustainability – because it reduces emissions. In transport especially, we believe that efficient combustion engines and power train technologies, including hybridization, combined with use of biofuels, could offer the quickest and most effective pathway to a secure, lower-carbon future, at least in the short to mid-term.

A diverse mix


We believe the global energy challenge can only be met through a diverse mix of fuels and technologies. A broad mix can help to provide enhanced national and global energy security while supporting the transition to a lower-carbon economy. This is why BP’s portfolio includes oil sands, shale gas, deepwater production and alternative energies such as biofuels and wind.

Oil and gas


Oil and gas are still expected to play a significant part in meeting this demand and we project they will represent 53% of total energy consumption in 2030 (compared to 57% in 2010). Even under the International Energy Agency’s most challenging climate policy scenario that might with difficulty still be achievable (the 450ppm scenario), oil and gas still make up 49% of the energy mix in 20302. Moreover, we believe the political, technological, logistical, infrastructure and cost challenges presented by the 450ppm scenario make it increasingly unlikely to occur, meaning that demand for fossil fuels would remain at a higher level for longer. We think it likely that fossil fuels will still account for 80% of the world’s energy in 2030.

Gas in particular is likely to play an increasingly strategic role. It is a lower-carbon fuel that is increasingly secure and affordable. Used in place of coal for power, it could reduce CO2 emissions by half. We also believe that oil will remain the dominant source for transport fuels, accounting for as much as 87% of demand in 2030.

Over time the available hydrocarbon resources will become increasingly difficult to reach, extract and manage, requiring BP and others in our industry to move into more technically-challenging areas. Greater energy intensity could be required to extract these resources; operating costs and greenhouse gas emissions from operations are likely to increase. On the other hand, advances in technology will lead to more efficient ways to transform base hydrocarbons, including natural gas and coal, into usable forms of energy, petrochemicals and lubricants.

Renewables


Renewables, such as biofuels and wind, will be essential in addressing the challenges of energy security and climate change over the long term. Renewables are already the fastest-growing energy source, but they are starting from a low base. Sufficient policy support is required to help commercialize renewable technologies, but they will ultimately need to become free from subsidy and commercially self-sustaining.

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Alternatives​

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Research at companies, universities and national laboratories are pioneering technologies that will aim to be sustainable and economically competitive with today’s fossil fuels. While wind, solar and biofuels appear to be among the most promising, significant breakthroughs are still required to make them viable sources of future energy supply. The wind blows where and when it wants. Similarly, the sun only shines during the day and is most intense in sparsely populated areas. How do we effectively transport this energy from such remote areas to big cities? How can we efficiently store energy generated during the day for use in homes at night? The challenge will be to bridge these supply limitations with a 24-hour demand for electricity throughout the world. This means making our electricity grid more efficient and streamlined while developing storage systems to allow wind and solar energy to be saved for times of peak use.

Another source of future alternative energy may come from the world’s vast reserves of natural gas. Currently, much of our electricity comes from burning coal in power plants, releasing large quantities of carbon dioxide and other gases. Despite advancements in “clean coal” technology, alternatives to coal will surely be part of tomorrow’s solution. New technologies are beginning to unlock vast reservoirs of natural gas in North America, making it both a cheap and clean alternative to coal. Natural gas is also more easily transportable over long distances and releases less pollutants for the same amount of energy produced.

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It is likely that meeting tomorrow’s energy needs will require not just one but all of these alternatives working alongside traditional fossil fuels.