Global energy demand rising

Global energy demand was expected to rise an average of 1.4 percent annually over the next 20 years, or a total of 37 percent from 2013 to 2035, BP said in its Energy Outlook 2035 report released on Tuesday.

In the report, BP projects that demand for oil will increase by around 0.8 percent each year to 2035. However, oil demand from advanced economies, grouped in the Organization for Economic Cooperation and Development (OECD), is expected to drop over the same period. Oil consumption within the OECD peaked in 2005, and by 2035 is projected to fall to "levels not seen since 1986."

Rising demand is set to come entirely from the non-OECD countries. In two decades, China is likely to have overtaken the US as the largest single consumer of oil globally.

The British energy company also said that the current weakness in the oil market, which was stemming in large part from strong growth in tight oil production in the US, was likely to take several years to work through.

"Today's turbulence is a return to business as usual," BP Chief Executive Bob Dudley said in a statement, adding that "continuous change is the norm in our industry."

Gas rising fast, coal slow

According to BP projections, demand for natural gas will grow fastest of the fossil fuels over the period, increasing by 1.9 percent a year and led by demand from Asia.

Half the increased demand will be met by rising conventional gas production, primarily in Russia and the Middle East, and about a half from shale gas. By 2035, North America, which currently accounts for almost all global shale gas supply, will still produce around three quarters of the total.

Coal had been the fastest growing of the fossil fuels over the past decade, driven by Chinese demand. However over the next 20 years BP instead sees coal as the slowest growing fossil fuel, growing by 0.8 percent a year, marginally slower than oil.

The report said that the change was driven by less energy-intensive growth in China and the impact of regulations on the use of coal in both the US and China, as well as by plentiful supplies of gas that would help squeeze coal out from power generation.

Carbon emissions continue to grow

BP's Energy Outlook report also considered global CO2 emissions to 2035 based on its projections of energy markets and seen against a backdrop of national carbon-related policies. Its projection showed emissions rising by 1 percent a year to 2035, or by 25 percent over the period

The report concludes that in order to abate carbon emissions further it will require additional significant steps by policy makers beyond the steps already assumed.

uhe/pd (dpa, Reuters, BP.com)