IDC Energy Industry Insights Community –
BP recently released, for the first time publicly, its projections of future energy trends titled BP Energy Outlook 2030. This document builds on BP's well known annual Statistical Review of World Energy which has been published since 1956. In publishing its Energy Outlook, BP joins a host of other organizations that attempt to forecast future global energy trends including its competitor Shell, which published its most recent Shell Energy Scenarios to 2050 in 2008, and the non-profit International Energy Agency (IEA), which publishes its World Energy Outlook annually. Each organization takes a somewhat different approach and covers different time periods so it is nearly impossible to make "apples to apples" comparisons. However, it is interesting to note the commonalities and differences and infer the potential impact on technology in the energy industry.
All three organizations agree that global energy consumption will grow during the next 20+ years and that the predicted growth will be driven by the emerging economies of developing or non-OECD countries - particularly China and India. The BP Energy Outlook forecasts 39% growth of global primary energy consumption 2010-2030 (average 1.7% per annum). Non-OECD countries show 68% growth while OECD countries show only 6% growth. Shell's Energy Scenarios show 32-38% global growth over the same period, depending on which of the two scenarios is chosen. IEA's most recent World Energy Outlook forecasts global growth of 36% over the period 2008-2035. This, however, is a bit of a no-brainer since everyone in the energy industry has assumed this at a general level for years.
A more interesting prediction, and one where there is less agreement, relates to the projected fuel or energy source mix. BP sees the fuel mix gradually shifting away from coal and oil, losing share to natural gas and renewables. BP seems to be a strong believer in the growth potential for renewables, stating that the fastest growing fuels will be renewables (including biofuels) which are expected to grow at 8.2% per annum 2010-30. Natural gas is expected to be the fastest growing fossil fuel, growing at 2.1% per annum. Equally interesting, BP sees the shares of the three fossil fuels (oil, coal, gas) converging at 26-27% each and non-fossil fuels (hydro, nuclear, renewable) converging at roughly 7% each.
By sector, energy used to generate power remains the fastest growing, accounting for 57% of the projected growth in primary energy consumption to 2030. BP also suggests that the diversification of the fuel mix will be driven largely by the power sector.
BP is less optimistic about the potential for electric vehicles to have a major impact on global energy consumption. BP believes that energy used for transport will continue to be dominated by oil, but should see its share of global energy use decline as other sectors grow more rapidly. Growth is expected to slow over the next twenty years to average 1.1% per annum vs 1.8% per annum during 1990-2010, with OECD demand slowing and then declining post-2015. The company goes on to state that rail, electric vehicles and plug-in hybrids, and the use of compressed natural gas in transport is likely to grow, but without making a material contribution to total transport before 2030.
So, assuming that natural gas and renewables will be the big winners in the global energy growth race, where might BP and other large energy companies place their energy information technology bets? A reasonable starting point might be:
- Environmental, health and safety applications related to fracturing or "fracking"
- Sensor, communications and high performance computing (HPC) technologies to support seismic data acquisition, processing and interpretation for unconventional resources
- Similar real-time monitoring and control technologies for remote operation of drilling rigs and wells
- Collaboration technologies
- Well lifecycle management including rig scheduling
- Project portfolio management and enterprise content management to support capital project planning and management (across natural gas and renewable energy projects)
- Enterprise asset management (also across natural gas and renewable energy projects)
- Analytics across a number of business areas (risk management, weather modeling)
Anyone else have a view on this?