Environment, Social & Governance

BP Energy Outlook points to rapid rise of renewables but also continued importance of oil, natural gas

Oil will continue to play a critical role in the global energy system, but demand could fall to just above 85 million barrels per day (bpd) by 2035 and to just below 35 million bpd by 2050, according to this year’s edition of the BP Energy Outlook. Those numbers, from the report’s Below 2° scenario, contrast with a more robust outlook in the Current Trajectory scenario, under which oil consumption would continue to grow over the rest of this decade before falling back to its current level by 2035.

In both scenarios, it is assumed that oil used in road transport will decline due to improving vehicle efficiency and the switch to electric vehicles. However, in the Current Trajectory, road transport demand falls to just over 25 million bpd by 2050, while Below 2° assumes a greater impact from vehicle electrification, pushing demand to around 35 million bpd by 2035 and less than 10 million bpd by 2050.

Also in both scenarios, it’s anticipated that renewables, including geothermal energy, will be the fastest-growing source of primary energy. The combined supply of renewable energy rises more than two-and-a-half-fold by 2050 in Current Trajectory and three-and-a-half-fold in Below 2°.

The outlook for natural gas is more dependent on the pace of decarbonization, the report noted. Under Current Trajectory, natural gas demand rises to approximately 4,700 billion cubic meters (bcm) by 2035, almost 20% higher than 2023 levels. Over 80% of this growth stems from emerging economies. The US could be an exception among developed economies, with domestic gas demand growing by almost 15% by 2035. Most of that will be used to support increasing power generation needs, the report noted.

In the Below 2° scenario, natural gas demand peaks by the end of this decade, then declines back close to current levels by 2035. By 2050, it will be around half of current levels.

Production emissions from UK offshore is down for 5th consecutive year 

The UK offshore oil and gas industry decreased its production emissions by 7% in 2024, the fifth consecutive year of reductions, according to the Emissions Monitoring Report from the North Sea Transition Authority (NSTA). That represents a 34% drop since 2018.

Meanwhile, flaring activity dropped by 4.8% in 2024 to the lowest level on record and was 51% lower than in 2018.

However, the NSTA also noted that more investment in large-scale active emissions abatement projects is needed for the industry to meet the 2040 target of lowering emissions by 90% or achieve net zero by 2050. About half of the offshore emissions reductions achieved between 2018 and 2024 were from online assets. NSTA says its interventions have contributed to preventing the emission of 4.5 million tonnes of lifetime carbon dioxide equivalent since early 2021.

During that period, operators have invested in flaring reduction equipment and improved the efficiency of existing kits, such as gas export compressors and power generation turbines. Onshore gas compression for the Breagh field has been electrically driven since October 2024. Further, multiple normally unattended platforms now have low-carbon power supplies, for example, small wind turbines, solar panels and batteries.

Methane intensity in Permian down by half

The methane intensity of oil and gas production in the Permian Basin declined by more than 50% during the 2022-2024 period, according to analyses by S&P Global Commodity Insights. Improved operations, better equipment and the utilization of AI and other advanced technologies have led to reductions across all observable plume rates.

The latest data for 2024 show the methane emissions intensity of upstream oil and gas operations in the region to be 0.44% per barrel of oil equivalent, a 29% reduction from the previous year. Absolute annual 2024 methane emissions decreased by 21.3 billion cubic feet (bcf), a 22% decline from the previous year. Since the end of 2022, absolute emissions have declined by 55.2 bcf.

The findings are based on high-frequency observation data that include more than 500 high-resolution aerial surveys covering 90% of the basin’s production.