As the demand for energy grows, opportunities exist in the 'global energy journey,' where the US and Russia hold key roles, said BP PLC chief executive Bob Dudley in an opening keynote address March 6 to attendees at IHS CERAWeek in Houston.
BP’s Energy Outlook 2030 publication forecasts energy demand to grow by more than a third by 2030, with China and India likely to account for roughly 90% of that growth. On the supply side, BP forecasts nonfossil energy—nuclear, hydro, biofuels, and other renewable together—to provide roughly 20% of all energy in 2030. Gas is expected to be the fastest growing fossil fuel at a pace of roughly 2% annually. “It’s clean, cheap, and increasingly available,” he noted. Oil is expected to grow at less than 1% per year.
Despite the growth, it is anticipated that the world will still need around 16 million b/d more in 2030 than today. “Let us pause on what that means—that increase alone is nearly the combined daily 2011 production of Russia, Canada, and the United Arab Emirates,” he explained.
The role of US and Russia
US crude oil production has soared in the last five years due, in no small part, to unconventional resources and deepwater discoveries. Previously unreachable oil and gas are now being produced, and Dudley believes, more resources will be found and developed.
North Dakota—thanks in part to the liquids-rich Bakken Shale—surpassed California, and more recently, Alaska, to become the second largest oil producer in the US behind Texas.
And, while Texas has long been associated with the oil and gas industry, the Eagle Ford Shale has offered another boost. The energy industry accounts for 27% of the US job growth since 2008, noted Dudley, and roughly 180,000 of those jobs were added in Texas, he said, citing a recent report in the Wall Street Journal.
Russia, too, has the opportunity to play a large part in the 'global energy journey,' said Dudley.
The largest country in the world, Russia holds the largest combined oil and gas reserves, as well as the highest combined production of oil and gas, he said, noting that the country’s potential "has yet to be realized."
Western Siberia, Eastern Siberia, the Yamal Peninsula, shale and tight oil are all possibilities for increased production in Russia.
Both countries require energy investment "on an epic scale," in an open, welcoming environment. "This is not a business for the faint-hearted or easily discouraged," he said.