By Victor Gbonegun
The world’s rising demand for fossil fuels may have already reached its peak and faces an unprecedented decades-long decline, says a new global energy report released by the BP.
The report published on Monday insisted that demand for oil may never fully recover from the impact of the coronavirus pandemic, and may begin falling in absolute terms for the first time in modern history.
It stated that oil would be replaced by clean electricity from wind-farms, solar panels and hydropower plants as renewable energy emerges as the fastest-growing energy source on record.
The BP’s Chief economist, Spencer Dale, explained that the world’s energy future had become greener due to a combination of the Covid-19 pandemic and the quickening pace of climate action, which has hastened “peak oil”.
Dale said energy transition could be even quicker if global governments choose to spur a green economic recovery from the coronavirus crisis. He added that a boom in economic stimulus packages for low-carbon industries, which is expected by many energy experts, was not taken into account in the report because this outcome is “not inevitable”.
The world’s greater reliance on clean energy means renewables could grow from 5 percent of the world’s energy use to somewhere between 20 per cent and 60 per cent by 2050, according to the report.
He stated that the coronavirus pandemic was expected to stall economic growth in developing countries that typically spur energy demand, while economically developed countries are putting in place more ambitious climate policies and raising carbon taxes, according to the report.
“In all three of these scenarios the share of renewable energy grows more quickly than any energy fuel ever seen in history,” Dale said.
The shift towards electric vehicles will also take its toll on demand for oil. In all three scenarios the report found that the use of oil in transport would reach a peak in the mid- to late 2020s due to the shift towards electric cars and hydrogen-powered vehicles.
The report’s central scenario, which aligns with the goals of the Paris climate agreement to keep global temperatures well below 2C above pre-industrialised levels, shows demand for oil tumbling by 55 per cent over the next 30 years.
According to the chief executive, BP, Bernard Looney, he said the findings would help the company to “better understand the changing energy landscape” and would be instrumental in helping it develop its plans to become a net zero energy company by 2050.
Another factor dragging on the forecasts for oil demand in the coming decades are new measures to limit the production of plastic, which is manufactured using petrochemicals produced from fossil fuels, through more recycling and less single-use plastics.