BP Predicts the Future of Energy: Here's What You Should Know

A new report from BP holds its predictions for the energy world over the next two decades. Here are the key takeaways.

Jan 17, 2014 at 9:03AM

Integrated giant BP (NYSE:BP) is out with an extensive insight into what the future holds for energy. In its Outlook to 2035, BP notes the massive potential presented by emerging-market growth. At the same time, the road ahead over the next two decades isn't without a number of potholes.

There are immense challenges presented by soaring global energy demand, which BP warns will require complex solutions. Here's what BP expects to see over the next 20 years, and why it believes it will be there to profit along the way.

Global energy demand set to skyrocket
BP expects global energy demand to rise 41% between now and 2035, driven primarily by rapid expansion in the emerging markets. In addition, BP cites advanced drilling technologies that have enabled renewed production capabilities in the United States.

Interestingly, under-developed nations will account for the vast majority of the increase. A full 95% of the increase in demand will be concentrated in the emerging markets, led by China and India. By contrast, energy use in North America, Europe, and the developed economies of Asia will experience slowing growth, and even decline toward the end of the forecast period.

These findings are echoed by other energy majors, which have their own accounts of what the future of energy likely holds. Fellow energy behemoth ExxonMobil (NYSE:XOM) recently produced a report titled Outlook for Energy in which it states global energy demand should rise 35% by 2040.

BP's report differs from ExxonMobil's in the sense that they each see the global energy mix unfolding in different ways. ExxonMobil believes oil will retain its spot as the primary source of fuel, with natural gas taking second place and other forms in the distance. BP, meanwhile, sees a more equitable split: oil, natural gas, and coal should each represent 27% of the total mix by 2035, with nuclear and renewables accounting for the rest.

Soaring demand means rising emissions
Importantly, BP acknowledges the looming threat of greater pollution that will result from such an increase in energy consumption. In all, the company project global carbon dioxide emissions will increase by 29% over the next 20 years. The emerging markets are the primary culprit, as emissions are expected to decline in the United States and Europe.

Fortunately, BP plans to get in front of this with a series of energy-saving initiatives, and other oil majors are following suit. In recent years, BP has redesigned its chemicals plants to cut down on waste, while simultaneously increasing production. In addition, BP has targeted efficiency opportunities in its refining business. For example, it's developing new technologies in China to produce oil from hydrocarbon sources other than oil.

Rival Chevron (NYSE:CVX) has incorporated renewables into its energy mix as well. Chevron now prides itself on being one of the world's leading geothermal producers, and currently supplies 890 megawatts of electricity capacity to Indonesia and the Philippines, which is enough to serve millions of customers.

For its part, ExxonMobil recently launched two separate energy-saving programs, called the Global Energy Management System and Production Operations Energy Management. The efforts have worked in ExxonMobil's favor thus far, since total energy usage from its core operations remained unchanged in 2012 from the year prior.

A long road ahead, paved with profits
Between now and 2035, the under-developed world is about to embark on a new era of energy consumption. While BP and ExxonMobil see differences in the makeup of the global energy mix over the coming decades, both companies intend on delivering solutions.

Soaring global populations combined with rising standards of living mean the largest emerging economies, China and India, are about to see millions of new entrants into the middle class. Surging global energy demand isn't without a steep cost, but again, BP plans to be a big part of the solution going forward.

2035 is a long ways away, so don't wait 'til then to invest in our "Top Stock of 2014"

There’s a huge difference between a good stock, and a great one like our "Top Stock for 2013" -- Core Laboratories. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014 to try and recreate Core Labs' market trouncing returns. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Bob Ciura owns shares of BP p.l.c. (ADR). The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers