BP usually only updates its outlook once a year. Yet barely two months after issuing its Statistical review of world energy – which forecast the world of fossil fuels out to 2035 ¬– in February, the company last week published an updated forecast of the likely path of global energy markets to 2035, according to Natural Gas Intelligence.
“North America becomes a net exporter this year, and accounts for 66% of net global export growth 2015-35,” BP said in its updated forecast, adding that North America is expected to switch from importing 6% of its energy in 2013 to exporting 19% by 2035.
Oil accounts for over 60% of that reversal, with North America set to become a net exporter in 2018. This is in contrast to BP’s forecast in February that net oil exports would start in 2031.
Global net inter-regional natural gas imbalances now are expected to more than double by 2035, and North America is forecast to become a net gas exporter in 2019. By 2035, the region's gas exports are expected to reach 16 billion cubic feet per day.
“In particular, the US, supported by 164% growth in shale gas production, becomes a net natural gas exporter in 2017 and exports nearly 18Bcf/d by 2035," BP’s economists said last week, after saying in February that they expected US net gas exports to start by 2016.
“The US also becomes a net pipeline exporter in 2019 with net exports of about 4Bcf/d.”
BP still sees North America's natural gas growing to about 37% of market share in 2035 from 30% in 2013, but the super-major now sees it overtaking oil as the leading fuel around 2025, after BP's original forecast had targeted North American gas overtaking oil use by 2028.
Gas now is expected to overtake coal in 2025, five years earlier than originally forecast, with gas set to rise from a 22% share in 2013 to 33% in 2035.
Worse news, however, is in store for the coal industry, with BP forecasting renewables to overtake coal in the forecast period.
“More than half of the increase in energy demand from 2013-2035 is met by natural gas," BP’s economists said.
BP projects the oil market share to be about 31% in North America by 2035, the lowest share on record and down from a high of 48% in 1977.
BP forecast coal's share over the period to decline to 9%, also the lowest on record, while the renewables share is set to continue on its rapid path to displace coal as the third largest fuel by market share, with 19% of the North American market by 2035.
“Renewables, shale gas, tight oil and oil sands in aggregate grow at 5%/year and reach a 45% market share by 2035, compared to 21% today and just 4% a decade ago,” BP said in its updated outlook.
“The growth of new energy forms has been enabled by the development of technology and underpinned by large-scale investments and supportive policy, and these conditions are assumed to continue over the outlook.”
BP forecasts cumulative North American production of tight oil and shale gas between 2013 and 2035 to be “roughly equivalent to 50% of tight oil and 30% of shale gas technically recoverable resources. The comparable numbers for the rest of the world are expected to be just 3% and 1%, respectively”
While oil production in the US is surging despite low prices, BP sees growth in US tight oil flattening out in coming years, reflecting high well decline rates and less extensive resources than natural gas; yet US shale gas production will grow rapidly over the outlook period by 4.5%/year.
BP expects gas’ growth rates to moderate gradually.
“Shale gas production continues to grow strongly in the US (48Bcf/d); later in the outlook, shale gas production grows in Canada and Mexico (6Bcf/d),” BP said.
“Growth in shale gas offsets declines in regional conventional supplies (-5Bcf/d). The US remains the largest producer of natural gas in the world, accounting for 23% of production in 2035. Shale gas supplies account for nearly 60% of regional output by 2035.”
