• Ian Sutton

BP's Energy Outlook — 2020

Updated: Mar 18

Credit: BP

In September 2020 BP published their 2020 Energy Outlook. In the report's Summary the company says,

The Energy Outlook explores the forces shaping the global energy transition out to 2050 and the key uncertainties surrounding that transition.

The company makes it clear that they are not predicting the future. The report’s purpose is to outline how energy consumption and production may change over the next 30 ‎years based on a range of assumptions to do with policies and societal ‎preferences.

There is a lot of interesting material in this report — it is well worth reading.

Some of the report's assumptions would seem to be open to challenge. For example, it projects that road and air travel will double by the year 2050. Given the impact of the COVID pandemic, this projection seems dubious. Also, the report shies away from talking too much about the consequences of climate change should we choose not to take action.

Three Scenarios

The report is structured around three possible scenarios.

  • Business-as-Usual (BAU) assumes that government policies, technologies and societal ‎preferences continue to evolve in a manner and speed seen in the recent past. In BAU, carbon ‎emissions from energy use peak in the mid-2020s but do not decline significantly, with ‎emissions in 2050 less than 10% below 2018 levels.‎

  • Rapid assumes the introduction of policy measures, led by a significant increase in carbon ‎prices, that result in carbon emissions from energy use falling by around 70% by 2050 from ‎‎2018 levels. Rapid is broadly in line with scenarios that are consistent with limiting the rise in ‎global temperatures by 2100 to well below 2°C above pre-industrial levels.‎

  • Net Zero assumes the policy measures of Rapid Scenario are reinforced by significant shifts in societal ‎and consumer behavior and preferences – such as greater adoption of circular and sharing ‎economies and switching to low carbon energy sources. This increases the reduction in ‎carbon emissions by 2050 to over 95%. Net Zero is broadly in line with a range of scenarios ‎consistent with limiting temperature rises to 1.5°C. ‎

Each scenario assumes that energy use will continue to increase over the course of the next 30 years.

The following chart is taken from the report. It shows CO2 emissions from energy use starting in the year 2000. Current programs to cut back fossil fuel consumption cause emissions to level out, even under BAU conditions. At the other extreme, emissions drop to close to zero just three decades from now.

From BAU to Rapid to Net Zero

Page 110 of the report describes the changes that need to be made to move from BAU to the Rapid scenario. The following factors are important.

  • A switch to low-carbon fuels, i.e., from coal to natural gas, mostly in Asia.

  • A rapid increase in the use of Carbon Capture Use and Storage (CCUS). The report projects that 4 gigatons of CO2 will be captured annually. Three quarters of this will be captured from industrial and power sectors emissions; the remainder from the production of ‘blue’ hydrogen.

  • Changes in the behavior, preferences and actions of companies and households.

The transition from Rapid to Net Zero requires,

  • An almost total switch from fossil fuels to renewable energy sources, and

  • Greater use of CCUS to around 5.5 gigatons of CO2 annually.

Carbon Capture

This report recognizes that, if we are to achieve the CO2 reduction goals called for, then it will be necessary to capture some of the CO2 that has been emitted and to either sequester it underground, or convert it to a useful product. Broadly speaking, there are three ways in which this can be done. The first is biological — it consists of planting trees that will remove CO2 as they grow. The second approach is point-source capture, i.e., to capture CO2 at the exhausts of power plants and industrial facilities. The third strategy is to remove CO2 from the ambient air.

The BP report appears to favor the first two of these.

Point-capture is technically feasible, but has not yet been established at scale. For example, the company Climeworks is planning on building a direct air capture facility with a capacity of 500,000 tonnes of CO2 by the year 2024. Yet the BP report calls for the removal of 4 gigatons (4 billion) tonnes per annum. This would require that 8,000 of the Climeworks facilities be designed, engineered, built, commissioned and put into operation in less than 30 years. By comparison, one of the world’s largest industries — ammonia production — has just 500 to 1,000 plants operating world-wide.

The BP report does not speak to this formidable logistical challenge. Nor does the report discuss the economic challenges to do with carbon capture. The cost of installing thousands of these facilities in just a few years will be very high. There is no revenue stream associated with the underground sequestration of CO2 so the operating expenses will have to be covered by some type of government subsidy. (Some of the CO2 may be used to make products that last for many years and thus serve as a form of sequestration.)

Engineering and Project Management Challenges

The above discussion to do with carbon capture raises the broader topic of engineering and project management realities — the theme of this blog.

The level of effort needed to transform our society away from carbon-based fuels will require an all-out political, social, engineering, project management and financial commitment. Although there has been some progress, say to do with electrically-powered vehicles, there are no signs that society is ready to make that commitment. It is one thing to demonstrate a new technology, such as carbon capture — it is quite another to install it world-wide in less than three decades.

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