“The US has cheap energy; Asia has cheap labour, but Europe is at risk of having cheaper costs for neither”
This startling fact was one of many made by Mr Peter Mather, BP Group Regional Vice President for Europe, during a recent fascinating briefing on his 2035 energy forecast.
The FBCCI Presidents Forum Members were greeted at the Cercle de l’Union Interalliée on Tuesday the 8th of April by splendid sunshine and the promise of a lively, detailed and interesting run through of BP’s predictions for the years to come, broken down into sectors and regions.
Bob Lewis, president of the FBCCI, introduced the Energy Outlook briefing by inviting guests to “servez-vous” to the delicious array of French viennoiserie, as Remy Delphin, CEO of BP, introduced the topic and welcomed to the podium the keynote speaker.
Peter Mather began his presentation with some general facts, including the future figures of energy consumption (an absolute increase of 41% by 2035); the decrease in China’s consumption growth due to the slow-down of industrialisation; and the general energy growth shift from OECD to non-OECD economies.
He continued his analysis with an overview of different countries and how changes within them would affect energy consumption and climate change. The world as a whole is changing: by 2035 there will be an extra 1.7 billion people on the planet. In India, 180 in 1000 people will own cars, where now only two do. He highlighted the fact that Europe’s biggest problem is its weak production of fossil fuels in comparison to the US, where energy is cheaper, or Asia where labour is cheap.
Mr Mather followed the regional breakdown with a summary of the forecast by sector: liquid fuels, natural gas, and coal and non-fossil fuels. He predicted that oil was expected to be the slowest growing fuel from now until 2035; that global demand for natural gas will grow by almost 2% per annum; and that China and India combined will make up for 87% of the global coal growth to 2035.
In terms of carbon emissions, it looks like China will be overtaking the EU per capita by 2017, but staying well behind US level until 2035. It was also forecast that the IEA 450 Scenario1 will certainly be passed by 2035. Conversely, it was noted that energy intensity will decrease, with Mr. Mather’s current prediction currently lying at a 35% decrease by 2035, a positive sign for reducing CO2 emissions.
The presentation was followed by a round of Q&A from the guests, who raised issues such as energy prices (where Peter Mather commented on their unpredictability and dependency on various factors); the differing attitudes towards Shale Gas in the States compared to Europe; and, on a more general level, the need for increased investment and reduced regulation within in the industry.
Bob Lewis closed the event, thanking BP and Peter Mather for his fascinating insight into the future of this dominant industry.