The annual review of World energy from bp shows a stark reversal of the company’s position only a short while ago. When the pandemic hit, bp went on record suggesting that we may have seen peak oil demand in 2019. It was an interesting theory and one that we discussed at the time, but it underestimated the impact that aggressive COVID-related stimulus would have on consumers globally and we suspect that bp, like many others, overestimated the rate at which renewables could be added. Now the company is exploring a very different scenario, one in which the current momentum in the energy market continues and the rate of renewable additions slows, either because of more limited capital or because of material constraints – or a combination of both.
Source: BP – Energy Outlook 2022, March 2022
This momentum case puts the world very far away from the Paris goals for 2050 and is likely a bit of a shock tactic from bp, possibly aimed at waking governments up to the impact of their lack of coordination and incomplete policies. Historically, bp has presented some very solid analysis in this report and it would be in everyone’s best interest for all those chasing net-zero goals to pay attention. There is an acute need to attract capital to both conventional (but cleaner) energy and renewables markets today, and a clear regulatory playing field is necessary for that to happen. For more see today's daily.
Source: BP – Energy Outlook 2022, March 2022
