Due to the rapid development of electric vehicles and travel-sharing services, global consumption of oil will decline about 20 years from now, the British oil and gas giant has predicted in its latest industry outlook.
Under BP's Evolving Transition scenario, which assumes that policies and technology continue to evolve at a speed similar to that seen in the recent past, some 30 percent of car kilometers will be powered by electricity by 2040 from almost zero in 2016.
At the same time, the number of electric vehicles (EVs) is set to increase from 3 million today to over 320 million in the next two decades, representing roughly 15 percent out of a total car fleet of 2 billion.
The scenario is part of the British oil major's annual Energy Outlook presented on Tuesday. It comes to the conclusion that fuel demand from the global car fleet will dip to 18.6 million barrels per day (bpd) in 2040 from 18.7 million bpd in 2016.
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The gap between the increasing number of EVs on the road and the kilometers powered by electricity was due to the expected growth in so-called shared mobility by electric vehicles.
"Electric cars are likely to account for some 15 percent of cars on the road by 2040 but cover 30 percent of passenger distance travelled, since electric vehicles are expected to be used at a much higher intensity," the report said.
Ride-sharing on the rise
Unlike many other forecasts, including previous BP Energy Outlooks, which looked solely at the growing share of EVs in the car fleet, BP this year focused on the share of vehicles kilometers powered by electricity.
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By 2040, a vast majority of new cars will be bought by fleets offering shared mobility services, the BP report predicts, with the average electric car to be driven about two and a half times more than an internal combustion car.
"What we expect to see in the 2030s is a huge growth in shared mobility autonomous cars. Once you don't have to pay for a driver, the cost of taking one of those share mobility fleets services will fall by about 40 or 50 percent." The vast majority of the shared mobility is expected to be EVs because of their lower maintenance costs.
'Peak oil' set for late 2030s
London-based BP, for the first time, joined other oil companies such as Royal Dutch Shell in forecasting a peak for oil demand in the late 2030s, when it is expected to slightly decline at around 110 million bpd.
While the transportation sector will continue to dominate the growth in oil consumption, demand for plastic manufacturing will become the main source of growth in the 2030s.
Regarding overall energy demand, BP expects this to continue growing in the coming decades, rising by a third into 2040, or roughly 1.3 percent per year, driven by growth in China and India.
But as the world is learning to "do more with less energy," the demand of the European Union, for example, will remain largely the same over the next two decades despite a three times higher economic output in 2040.
China's energy needs will grow, however at a slower pace by the 2030s, when India will become the main driver of growth.
BP once again revised upwards its forecast for growth in renewable power, which is set to increase by 40 percent by 2040, with its share in the energy mix increasing from 4 percent to 14 percent.
However, this won't reduce climate changing carbon emissions, the report said, and "signaling the need for a comprehensive set of actions to achieve a decisive break from the past."
BP chief executive Bob Dudley said in a statement that there was a need for "more downward pressure on carbon emissions," warning at the same time that there was no silver bullet.
"We need a comprehensive approach encouraging both improvements in how efficiently we use energy as well as the continuing shift to a lower carbon fuel mix," Dudley said.
uhe/jd (Reuters, dpa, AFP)