On December 14th the Cercle Economique of the Chamber has hosted Peter Mather, BP Group Vice President Europe, who gave his current views on the evolution of the world energy market, particularly on oil and gas.
Oil and gas plus coal will continue to dominate the energy market with a balanced proportion of around 30/30/30 % with some 10% for renewables and nuclear together.
These 3 energy sources will be available, affordable and not harmful for the planet.
Availability is there for the longest forseeable future as reserves continue to increase:
– 200 years for coal,
– 60 to 80 years for gas and 40 to 50 years for oil ,benefitting from the recent discoveries of shale oil and gas particularly in the US but also the deep extraction in areas like Brazil or Western Africa plus the return of Iran, Irak, Egypt and other Middle East countries.
To be affordable oil and gas will need a minimum price level in order to cover both shale resources in the US and deep extraction in other places in the world like Russia, Brazil, Africa or Asia.
A price range around 50 /70 dollars per barrel oil equivalent seems to allow both shale and deep extraction to be competitively available in the main production areas.
The recent OPEC move supported by large non OPEC suppliers like Russia gives an indication that such a price range might become the ideal short ,medium and long term target.
Considerable production cost reductions are being made in order to ensure both shale and deep extraction become viable and competitive. These energy sources must also ensure an harmless impact on climate and water!
The transfer from oil to gas in the industry and electricity supply brings a huge reduction of carbon emissions The specialised use if oil in transport with clean engines and clean/hybrid/electric cars will also improve the impact on climate.
For coal cleaner power stations will become the norm in the long run.Nuclear and renewables (wind/solar/waste and biofuels) will also contribute to a cleaner energy supply but on a selective basis according to the geography and historic situation but should remain minor contributors compared to the 3 main energy sources: Oil gas and coal .
The world economy will be boosted by these abundant , affordable and cleaner energy sources for the foreseeable future.
Michel de Fabiani