WHITING | Crude oil prices may have crashed, but BP predicts demand will continue to rise over the next 20 years.
The company's annual Energy Outlook, which is released every February, projects global demand for energy will rise 37 percent by 2035, an average of 1.4 percent a year.
High oil prices and technological advances in drilling resulted in a major production boom in North America that will make the United States a net explorer instead of net importer of oil for the first time this year. Crude oil prices are expected to remain low for several years, partly because U.S. production rose by 1.5 million barrels a day last year, the biggest annual increase in American history.
"After three years of high and deceptively steady oil prices, the fall of recent months is a stark reminder that the norm in energy markets is one of continuous change," BP Group Chief Economist Spencer Dale said. "It is important that we look through short-term volatility to identify those longer term trends in supply and demand that are likely to shape the energy sector over the next 20 years and so help inform the strategic choices facing the industry and policy makers alike."
The United States, which imported 60 percent of its oil in 2005, is on pace to become entirely self-sufficient with oil by the 2030s.
But the use of different energy sources is becoming so diversified that by 2035 no one fuel will be dominant for the first time since the Industrial Revolution.
Fossil fuels will go from having about 86 percent of the market share to about 81 percent in 2035, the study found. They will remain the dominant source of fuel despite losing ground.
Demand for oil is projected to grow by an average of 0.8 percent each year through 2035, largely because of economic growth in China and India. China is in fact expected to usurp the United States as the world's largest consumer of oil by then.
Energy will flow eastward as U.S. production will increase, and demand in the United States and Europe will decline because of increased energy efficiency and the slower growth that comes with established economies.
"The energy industry works on strategies and investments with lifespans often measured in decades," Chief Executive Officer Bob Dudley said. "This is why an authoritative view of the key trends and movements that will shape our markets over this long term is essential ... and is precisely why this Outlook is so valuable."