North America will become energy market leader by 2030, BP predicts
According to a new report published by BP, the next two decades will witness strong growth in production of gas and oil from unconventional sources, which will cause a significant change in global energy markets. The BP Energy Outlook 2030 claims that innovative methods of production will alter expectations for major economies and will shift the current balance of energy trade globally.
In its third Outlook report, BP presents its views on the likely developments in the energy markets, based on analysis of developments and statistics from 2012. Overall, there is little change in expectations in terms of global energy demand levels, with predicted growth in demand pegged at 36 percent by 2030 compared to 2011. Most of this growth is likely to come from emerging economies, BP says. However, the pattern of supply of this growth is likely to be undergoing dramatic changes, as unconventional sources like shale gas, tight oil, heavy oil and biofuels are expected to become more prominent. This change is predicted to have the biggest effect on the U.S. energy balance. BP also says that increasing production of tight oil, oil sands and biofuels will account for the entire net growth in global oil supply to 2020 and more than 70 percent of growth to 2030.
While last year's report predicted that North America was on its way to becoming energy-independent, this year BP has taken a more detailed look at the boom of shale gas and tight oil production and its global implications. BP calculates that by 2030 the U.S. will be be 99 percent self-sufficient in net energy, compared to 2005, when its energy self-sufficiency came in at 70 percent. On the other hand, emerging economies like China and India will experience steep growth in demand and will be relying heavily on energy imports, which will lead to a change in balance on the global energy markets.
Bob Dudley, BP Group chief executive, said that the latest Outlook showed how wrong those who predicted that oil sources are running low were. In fact, for countries like the United States, oil and gas will prove to be the key to strong economic growth. Even though shale gas and tight oil resources could be detected across the globe, the opportunities they provide have not been tapped in other regions apart from North America.
Christof Ruhl, BP Group chief economist, commented that the successful exploitation of these resources depended on a number of factors, such as a stable and competitive service sector, land access granted by private ownership, liquid markets and regulatory terms. So far, Canada and the United States have been the only countries that have managed to combine these factors to ensure production growth and this is the main reason why they are expected to become major forces on the global energy market by 2030.
This year's predictions indicate that the global energy market is diverse and dynamic, creating a future full of exciting opportunities, especially for innovative technologies and foreseeing businesses that are willing to work with them, Dudley concluded.