BP's Hayward: Growing economies demanding more energy
BP PLC Chief Executive Officer Tony Hayward says more money needs to be spent on exploration and development if the world is to meet increasing demand for energy.
PORT OF SPAIN, Nov. 25 -- BP PLC Chief Executive Officer Tony Hayward says more money needs to be spent on exploration and development if the world is to meet increasing demand for energy.
Speaking at a news conference in Trinidad, Hayward said BP was projecting that by 2030 the world will need at least 45% more energy than it consumes now.
Hayward said this increase demand will be driven mainly by the world’s emerging economies.
“Hundreds of millions of people, driven mainly by India’s and China’s development, are making the journey from a rural to an urban way of life, and that journey brings with it an explosion in demand for energy,” Hayward said.
To meet this increase in demand, BP projects it will require an investment of $25-30 trillion, or and average of “more than $1 trillion/year for the next 20 years.”
Hayward said is not happening at the moment because the world economic crisis has led to a reduction in companies’ ability to invest in exploration.
Hayward said to face the challenges of energy security and climate change there will also be a need for a more diverse energy mix.
“What has become very clear is that there are no magic bullets, nor is there going to be a ‘one-size fits all’ solution: each country will have to define its own pathway, based on its natural competitive advantage,” he said.
Focus on gas
Hayward said natural gas is becoming increasingly important in dealing with the energy and environmental challenges facing the world and as the developing economies continue to expand, demand for power is set to grow exponentially.
“We believe the best way of meeting this demand growth, while lowering carbon emissions, is through a switch from coal to gas.”
Renewable energy will eventually be important but it will take several decades to become a significant part of the power generation mix. Very long lead times apply to nuclear power as well.
“In the short term, the main choice for expanding generation capacity is between coal and gas. And until clean coal technology has been developed for use at scale—which is still some ways off—gas should be the clear choice,” he said.
Hayward added, “[Gas] generates half the carbon emissions of coal. It is abundantly available—even more so than we thought just a few years ago thanks to the unlocking of significant reserves of unconventional gas in North America. And as LNG it is traded in increasingly open markets around the world.”
A fundamental part of the world’s energy future, Hayward argued, must be gas. After all, he said, it is the fuel that offers the greatest potential to provide the largest carbon reductions—at the lowest cost—and all that by using technology that’s available today.
Hayward admitted though that clean coal technology will have to be improved and coal will return as part of the sustainable energy mix.