BP Forecasts Renewables To Grow Fastest Of All Fuels

Is BP beyond petroleum or not? If not, why not?

Those questions come to mind when reviewing BP's 2012 version of its Energy Outlook for 2030 that forecasts that renewable energy globally will be the fastest growing energy source--and by a lot--from 2010 to 2030. Specifically BP forecasts that renewables will grow 8.2% per year for the 20-year forecast period. That rapid global growth rate for renewables compares to 2.1% per year growth for gas and 0.7% per year for oil.

You can see the report here

Not surprisingly gas is the fastest growing fossil fuel, with BP projecting that coal loses market share, starting in 2020. The relatively slow annual oil demand increase reflects declining usage in developed nations being more than offset by increasing oil consumption in especially China and India. The annual increase compounded over 20 years adds 16 million barrels of daily demand or close to 20% more by 2030. Oil supply will strain to keep pace with this modest rate of increase, making current high oil prices a probable fact of life for the next 18 years. BP's oil demand forecast makes the economic case for natural gas vehicles, electricity vehicles, and biofuels look sound. The slow movement toward forms of transportation that do not use oil remains a colossal failure of policy.

While the BP forecast is bullish for renewables, BP projects that fossil fuels will provide 80% of global energy in 2030, even with its forecasted rapid increases in renewable energy production. BP's forecast, however, refutes the claims of some that renewable energy is a passing fad that will be extinguished by shale gas or something else. Renewable energy is instead a big, rapidly growing global industry, where investment in new renewable power plants matches or exceeds investment in fossil fuel power plants. Moreover, as bullish as the BP forecast is for renewables, I suspect its inevitable errors include underestimating the growth of renewables. Time will tell.