The Global Energy Supply Is Getting Greener. It’s Just Not Happening Fast Enough

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Patricia Fenn Gallery

With President Obama’s rejection (for now) of the proposed Keystone XL oil sands pipeline fresh in everyone’s mind—and conservatives and the oil industry already hammering him, even as greens sing his praises—you can be sure that energy issues will play a bigger role than usual in the 2012 election. So it’s worth taking a step back and figuring out where we are globally on energy. What’s rising, what’s falling—and how much oil, gas, coal and renewables will we need and use in the decades to come?

Thankfully, our friends at BP have just released their annual Energy Outlook, a compendium of current global energy stats and a prediction over how that picture will change over the next 20 years. A couple of caveats: one, BP is, of course, primarily an oil and gas company, so it wouldn’t be surprising to see their expectations of future energy use skewed towards fossil fuels, while possibly undercutting renewables and efficiency. Second, every attempt to look very far into the future of energy is by its nature a doomed enterprise. Technologies change, economies rise and fall and disasters happen. Any attempt to pinpoint how we’ll be using energy two decades into the future is—if we’re lucky—an educated guess.

With that out of the way—what does BP’s vision of the energy future look like?

MORE: Pipeline Politics: Keystone Is Dead (For Now). What Happens Next?

First of all, BP expects us to use considerably more energy, projecting that demand will increase 39% between now and 2030, or about 1.6% a year. Nearly all of that growth will come from developing nations—especially titans like China and Russia—while developed nations like the U.S. may be approaching peak energy use, as both slower economic growth and increased energy efficiency reduces the need to use more power. That’s largely positive—getting more economic activity out of less energy is always good—but it underlines how the geopolitics of energy are shifting. Once centered on the U.S. and Europe, now Asia, Latin America and parts of Africa will be demanding larger shares of the energy pie, which could prompt countries like China to take a more active role in safeguarding that supply. Up until now the U.S. has been the world’s global oil cop, but we could see a future where China—which is likely to become increasingly reliant on imported oil—wants to walk the beat as well in the Middle East. How will the Americans react?

It’s possible that we may be willing to let them have it. Another surprising fact from the BP report is that the Western Hemisphere—including the U.S.—could become almost totally energy self-sufficient by 2030. That’s largely thanks to the growth in unconventional crude from oil sands, shale oil and ultradeepwater drilling, as well as the ongoing shale gas bonanza to go with deep existing reserves of coal. Here’s BP CEO Bob Dudley:

Our report challenges some long-held beliefs. Significant changes in US supply-and-demand prospects, for example, highlight the likelihood that import dependence in what is today’s largest energy importer will decline substantially.

Caveats, of course, abound—starting with the still uncertain environmental risks around unconventional oil and gas production, which were highlighted this week with the rejection of the Keystone XL pipeline. BP—and many others in the energy business—assume that if there’s oil or gas in the ground (or the water), we’ll do whatever’s needed to get at it. But that’s not necessarily how it works. Environmental concerns, climate policy that raises the price on carbon or a major accident could all slow the pace of unconventional fossil fuel development.

MORE: As the U.N. Talks Climate, the World Keeps Warming

And then there’s the growth of renewables. Renewable energy like wind and solar—BP puts hydro, which is mostly tapped out, in a separate category—have been the fastest growth sources of energy over the past few years, and BP projects that trend will continue, with renewables growing at more than 8% a year between now and 2030. That’s considerably faster than natural gas, the most rapidly growing fossil fuel at about 2% a year. But those trends may be deceiving because renewables are still a tiny percentage of the overall global energy picture—and at the rates BP projects, in 20 years they will still be a relatively part of the pie, providing well less than 10% of global energy. (Extremely low natural gas prices won’t help—cleaner gas tends to compete directly with renewables, and according to a recent report from the Massachusetts Institute of Technology, shale gas may be crowding out investment in renewables.) And that’s one reason why BP projects that carbon emissions will increase 28% by 2030, which would mean the world would have no shot at keeping global temperature increases below the 2 C level that many scientists believe is a red line.

The reality is that global energy use is like a vast aircraft carrier, and changing course will almost certainly take a lot of time, unless the world proves willing to embrace expensive policies that could accelerate that change. But that doesn’t seem to be happening—not on the scale rapid change would demand. Global energy is going green. It’s just not happening fast enough.

MORE: The Science Is Dire on Carbon Emissions. The Politics Are Worse