1. BP Energy Outlook 2035
January 2014
bp.com/energyoutlook
#BPstats
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2. Disclaimer
This presentation contains forward-looking statements, particularly those regarding global
economic growth, population growth, energy consumption, policy support for renewable
energies and sources of energy supply. Forward-looking statements involve risks and
uncertainties because they relate to events, and depend on circumstances, that will or may
occur in the future. Actual outcomes may differ depending on a variety of factors, including
product supply, demand and pricing; political stability; general economic conditions; legal and
regulatory developments; availability of new technologies; natural disasters and adverse
weather conditions; wars and acts of terrorism or sabotage; and other factors discussed
elsewhere in this presentation.
Energy Outlook 2035
2
© BP 2014

3. Contents
Page
Introduction
4
Outlook 2035: Global energy trends
7
Liquid fuels
23
Natural gas
51
Coal and non-fossil fuels
67
Carbon emissions and the fuel mix
79
Appendix
91
Energy Outlook 2035
3
© BP 2014

4. Welcome to the 2014 edition of BP’s Energy Outlook.
Published for the 4th time, the annual Energy Outlook reflects our best effort to describe a
“most likely” trajectory of the global energy system, based on our views of likely
economic and population growth, as well as developments in policy and technology. The
Outlook, like its sister publication, the Statistical Review of World Energy, is the result of
intensive analysis by our Economics Team; both documents have deservedly become
standard references for those with an interest in energy.
Of course the future is uncertain: the numbers that make up this Outlook are less
important than the long-term trends, the possible forks in the road ahead, and the choices
they pose for decision makers in government and business.
This edition of the Outlook raises three big questions: Will the world have sufficient
energy to fuel continued economic growth? Will that energy be secure? And will it be
sustainable?
On the first question, our answer is a resounding “Yes” We project that global energy
.
consumption will rise by 41% by 2035, with 95% of that growth coming from rapidlygrowing emerging economies. That growth rate is slower than what we have seen in
previous decades, largely as a result of increasing energy efficiency. Trends in global
technology, investment and policy leave us confident that production will be able to keep
pace. New energy forms such as shale gas, tight oil, and renewables will account for a
significant share of the growth in global supply. Energy efficiency promises to improve
unabatedly, driven by globalization and competition.
Energy Outlook 2035
4
© BP 2014

5. On the question of security, our Outlook offers a mixed, though broadly positive, view.
Among today’s energy importers, the United States is on a path to achieve energy selfsufficiency, while import dependence in Europe, China and India will increase. Asia will
become the dominant energy importing region. Russia will remain the leading energy
exporter, and Africa will become an increasingly important supplier. While it will remain a
key energy player, the Middle East is likely to see relatively static exports.
And on the question of sustainability, we project that global carbon dioxide emissions
will rise by 29%, with all of the growth coming from the emerging economies. There are
some positive developments: emissions growth will slow as natural gas and renewables
gain market share from coal and oil. And emissions are expected to decline in Europe and
the US. But we could do better.
This year, we extend the outlook to 2035 – far enough to see some key turning points:
India is likely to surpass China as the largest source of energy demand growth;
renewable energy will no longer be a minor player, surpassing nuclear energy; and OECD
countries will have started to “crack the code” of sustaining economic growth while
reducing energy demand.
Once again, the Outlook highlights the power of competition and market forces in
unlocking technology and innovation to meet the world’s energy needs. These factors
make us optimistic for the world’s energy future, and they suggest a way forward in
mastering challenges such as security and sustainability.
I hope you find the BP Energy Outlook a useful addition to the global energy discussion.
Bob Dudley
Group Chief Executive
Energy Outlook 2035
5
© BP 2014

6. Note on method and assumptions
This edition updates our view of the likely path of global energy markets
and extends it to 2035. The underlying methodology remains unchanged
– we make assumptions on changes in policy, technology and the
economy, based on extensive internal and external consultations, using
a range of analytical tools to build a single “most likely” view.
We focus on these “most likely” numbers, to provide a basis for
discussion. Of course the future is uncertain, and in the process of
building the Outlook we explore the impact of alternative assumptions.
While we do touch on some of the key uncertainties, the treatment of
energy market risks here is by no means exhaustive.
Unless noted otherwise, data definitions are based on the BP Statistical
Review of World Energy, and historical energy data through 2012 is
consistent with the 2013 edition of the Review. Gross Domestic Product
(GDP) is expressed in real Purchasing Power Parity (PPP) terms and
rescaled from 2005 to 2012 prices using a simple across-the-board
increase for exposition purposes. All data sources are listed on page 96.
Energy Outlook 2035
6
© BP 2014

7. Page
Introduction
4
Outlook 2035: Global energy trends
7
Liquid fuels
23
Natural gas
51
Coal and non-fossil fuels
67
Carbon emissions and the fuel mix
79
Appendix
91
Energy Outlook 2035
7
© BP 2014

8. Primary energy consumption growth slows...
Consumption by region
Ten year increments by region
Billion toe
Billion toe
18
2.8
15
2.0
Other
12
1.2
9
China
0.8
China
6
India
1.6
India
0.4
OECD
0.0
OECD
Energy Outlook 2035
8
2035
2025
2015
2005
2035
1995
1975
2000
-0.4
1985
3
0
1965
Other nonOECD
2.4
© BP 2014

9. …and the growth is almost all in the non-OECD
Primary energy demand increases by 41% between 2012 and 2035, with
growth averaging 1.5% per annum (p.a.). Growth slows, from 2.2% p.a.
for 2005-15, to 1.7% p.a. 2015-25 and just 1.1% p.a. in the final decade.
We are leaving a phase of very high energy consumption growth, driven
by the industrialization and electrification of non-OECD economies,
notably China. The 2002-2012 decade recorded the largest ever growth of
energy consumption in volume terms over any ten year period, and this
is unlikely to be surpassed in our timeframe.
There is a clear long-run shift in energy growth from the OECD to the
non-OECD. Virtually all (95%) of the projected growth is in the non-OECD,
with energy consumption growing at 2.3% p.a. 2012-35. OECD energy
consumption, by contrast, grows at just 0.2% p.a. over the whole period
and is actually falling from 2030 onwards.
China has emerged as the key growth contributor, but by the end of the
forecast China’s contribution is starting to fade. India’s contribution
grows, almost matching that of China in the final decade of the forecast.
Energy Outlook 2035
9
© BP 2014

10. The strong impetus from industrialization...
Consumption by sector
Ten year increments by sector
Billion toe
Billion toe
18
3.0
Transport
15
12
Other
2.5
2.0
Industry
1.5
9
Electricity
share
6
Other
1.0
Industry 0.5
Transport
3
Energy Outlook 2035
10
2035
2025
2015
2005
2035
1995
2000
1985
0
1965
1975
0.0
© BP 2014

11. …starts to fade toward the end of the forecast
By sector, industry remains the dominant source of growth for primary
energy consumption, both directly and indirectly (in the form of
electricity). Industry accounts for more than half of the growth of energy
consumption 2012-35. This reflects the unprecedented pace and scale of
industrialization in Asia. Energy for industry grows at 2.6% p.a. over the
decade 2005-15, but this slows to just 1.0% p.a. in the final decade of the
forecast as China’s rapid industrialization comes to an end.
The next major component of growth is energy used in the ‘other’ sector
(residential, services and agriculture), predominantly in the form of
electricity. By the final decade, growth in other sector energy use almost
matches industry in volume terms.
The transport sector continues to play a relatively small role in primary
energy growth throughout the forecast, growing steadily but accounting
for just 13% of total growth during 2012-35.
Energy Outlook 2035
11
© BP 2014

12. The slowdown in China and industry...
Consumption by fuel
Ten year increments by fuel
Billion toe
Billion toe
18
3.0
Renew.*
Hydro
Nuclear
15
Renew.*
2.5
Hydro
2.0
12
Coal
Nuclear
1.5
3
2035
2025
2015
2035
2005
1975
2000
1995
0.0
Oil
0
1965
Oil
1985
6
Gas
0.5
Gas
Coal
1.0
9
*Includes biofuels
Energy Outlook 2035
12
© BP 2014

13. …is reflected in a marked slowdown in coal growth
All fuels show growth over the forecast period, with the fastest growth
seen in renewables (6.4% p.a.). Nuclear (1.9% p.a.) and hydro-electric
power (1.8% p.a.) both grow more rapidly than total energy.
Among fossil fuels, gas is the fastest growing (1.9% p.a.) and the only
one to grow more rapidly than total energy. Oil (0.8% p.a.) shows the
slowest growth, with coal (1.1% p.a.) only slightly ahead.
Coal’s contribution to growth diminishes rapidly. It is currently the
largest source of volume growth, but by the final decade coal adds less
volume than oil and is only just ahead of hydro. Again, this reflects the
shift away from coal-intensive industrialization in China.
In that final decade, gas is the largest single contributor to growth; but
non-fossil fuels in aggregate contribute even more than gas, accounting
for 39% of the growth in energy in that period.
Energy Outlook 2035
13
© BP 2014

14. New sources help to supply sufficient energy...
Primary energy production
New energy forms
Billion toe
Billion toe
18
3
FSU
S & C America
12
N America
2
Middle East
Europe
6
1
Asia Pacific
0
1990
Africa
2005
Energy Outlook 2035
2020
Renewables
in power
Shale gas
14
12%
Tight oil,
oil sands,
biofuels
6%
% of total
(RHS)
0
1990
2035
18%
2005
2020
0%
2035
© BP 2014

15. …to meet demand growth
World primary energy production grows at 1.5% p.a. from 2012 to 2035,
matching consumption growth. Growth is concentrated in the non-OECD,
which accounts for almost 80% of the volume increment.
There is growth in all regions except Europe. Asia Pacific shows both the
fastest rate of growth (2.1% p.a.) and the largest increment, providing
47% of the increase in global energy production. The Middle East and
North America are the next largest sources of growth, and North America
remains the second largest regional energy producer.
There is expansion across all types of energy, with new energy forms
playing an increasingly significant role. Renewables, shale gas, tight oil
and other new fuel sources in aggregate grow at 6.2% p.a. and
contribute 43% of the increment in energy production to 2035.
The growth of new energy forms is enabled by the development of
technology and underpinned by large-scale investments. Our Outlook
assumes that the right competitive and policy conditions are in place to
support that investment and technical progress.
Energy Outlook 2035
15
© BP 2014

16. Energy is gradually decoupling from economic growth…
GDP and energy
Trillion $2012
Shares of primary energy
Billion toe
220
44
50%
Oil
GDP
170
40%
34
Coal
30%
120
24
20%
70
14
10%
Energy
(RHS)
20
1965
2000
Gas
Hydro
0%
1965
4
2035
Nuclear
2000
Renewables*
2035
*Includes biofuels
Energy Outlook 2035
16
© BP 2014

17. …and the fuel mix is slowly shifting away from fossil fuels
Energy consumption grows less rapidly than the global economy, with
GDP growth averaging 3.5% p.a. 2012-35. As a result energy intensity, the
amount of energy required per unit of GDP declines by 36% (1.9% p.a.)
,
between 2012 and 2035. The decline in energy intensity accelerates; the
expected rate of decline post 2020 is more than double the decline rate
achieved 2000-2010.
Fuel shares evolve slowly. Oil’s share continues to decline, its position as
the leading fuel briefly challenged by coal. Gas gains share steadily. By
2035 all the fossil fuel shares are clustering around 27%, and for the first
time since the Industrial Revolution there is no single dominant fuel.
Taken together, fossil fuels lose share but they are still the dominant
form of energy in 2035 with a share of 81%, compared to 86% in 2012.
Among non-fossil fuels, renewables (including biofuels) gain share
rapidly, from around 2% today to 7% by 2035, while hydro and nuclear
remain fairly flat. Renewables overtake nuclear in 2025, and by 2035 they
match hydro.
Energy Outlook 2035
17
© BP 2014

18. The power sector takes an increasing share of energy…
Inputs to power as a share of
total primary energy
50%
40%
Primary inputs to power
100%
World
Renew.
Gas
OECD
Non-OECD
75%
Nuclear
Oil
30%
50%
Coal
20%
25%
10%
Hydro
0%
1900
1945
Energy Outlook 2035
1990
2035
18
0%
1965
2000
2035
© BP 2014

19. …and plays a key role in shaping the fuel mix
One of the longest established trends in energy is the increasing role of
the power sector. The share of primary energy devoted to power
generation rises in industrializing as well as in mature economies, where
growth is dominated by the service sector.
In 2012, 42% of primary energy was converted into electricity in the
power sector, up from 30% in 1965. By 2035 that share will rise to 46%.
Fuels for power generation account for 57% of the growth in primary
energy consumption 2012-35. And the power sector is the one place
where all the fuels compete.
At the global level coal remains the largest source of power through
2035, although in the OECD coal is overtaken by gas. Carbon-free sources
(renewables, hydro and nuclear) increase their combined share of power
generation from 32% in 2012 to 37% by 2035. Renewables overtake
nuclear as a source of power generation in 2028, increasing their share of
power generation from 5% today to 13% in 2035, and showing little sign
of approaching any limit to their market share.
Energy Outlook 2035
19
© BP 2014

20. The security and sustainability of energy supply…
Primary energy net balances
Energy and CO2 emissions
Index: 1965 = 100
Billion toe
FSU
4
500
Africa
2
S&C
America
Middle
East
North
America
Asia
0
-2
2005
Energy Outlook 2035
2020
300
Energy
200
CO2
Europe
-4
1990
400
100
1965
2035
20
2000
2035
© BP 2014

21. …continue to pose significant challenges
Regional energy imbalances – production minus consumption for each
region – suggest that trading relationships will change significantly by
2035. North America switches from being a net importer of energy to a
net exporter around 2018. Meanwhile, Asia’s need for imported energy
continues to expand; by 2035 Asia accounts for 70% of inter-regional net
imports – and nearly all of the growth in trade.
Among exporting regions, the Middle East remains the largest net
regional energy exporter, but its share falls from 46% in 2012 to 38% in
2035. Russia remains the world’s largest energy exporting country.
Energy security is a theme that will run through the fuel-by-fuel
projections described later in this Outlook.
The biggest challenge in terms of sustainability remains the level of
carbon emissions, which continue to grow (1.1% p.a.) – slightly slower
than energy consumption, but faster than recommended by the scientific
community. We will also address this challenge in more detail later.
Energy Outlook 2035
21
© BP 2014

22. Energy Outlook 2035
22
© BP 2014

23. Page
Introduction
4
Outlook 2035: Global energy trends
7
Liquid fuels
23
Natural gas
51
Coal and non-fossil fuels
67
Carbon emissions and the fuel mix
79
Appendix
91
Energy Outlook 2035
23
© BP 2014

24. The global liquids balance reflects shifts…
Supply
Demand
Mb/d
110
2035 level
Crude
105
Other
100
Mid East
95
Other Asia
North
America
India
Other
NGLs*
90
China
85
80
2012
OECD
decline
Non-OECD
growth
2012
Non-OPEC
growth
OPEC
growth
*Natural gas liquids
Energy Outlook 2035
24
© BP 2014

25. …in non-OECD demand and non-OPEC supply growth
Oil is expected to be the slowest growing fuel over the outlook period.
Global liquids demand (oil, biofuels, and other liquids) nonetheless is
likely to rise by around 19 Mb/d, to reach 109 Mb/d by 2035.
Demand growth comes exclusively from rapidly growing non-OECD
economies. China, India and the Middle East account for nearly all of the
net global increase. OECD demand has peaked and consumption is
expected to decline by 8 Mb/d.
Rising supply to meet demand growth will come primarily from nonOPEC unconventional sources and, later in the outlook, from OPEC. By
2035, non-OPEC supply is expected to have increased by 10.8 Mb/d while
OPEC production will have expanded by 7.4 Mb/d.
The largest increments of non-OPEC supply will come from the US (3.6
Mb/d), Canada (3.4 Mb/d), and Brazil (2.4 Mb/d), which offset declines in
mature provinces such as the North Sea. OPEC supply growth will come
primarily from NGLs (3.1 Mb/d) and crude oil in Iraq (2.6 Mb/d).
Energy Outlook 2035
25
© BP 2014

26. Asia and the Middle East drive liquids demand growth…
Five year increments
Demand by region
Mb/d
Mb/d
120
2.5
100
Other
Middle East
80
1.5
India
60
China
40
1.0
US
20
0
1965
2.0
India
Middle East
China
Other OECD
0.5
0.0
2000
Energy Outlook 2035
2035
2010- 2015- 2015- 2025- 20302015 2020 2025 2030 2035
26
© BP 2014

27. …with growth in India overtaking China by 2035
Global liquids consumption is projected to reach 109 Mb/d by 2035 but
growth continues to slow (from 1.3% p.a. in 2000-12 to 0.6% for 2025-35).
OECD consumption is projected to fall by 8 Mb/d to 37.6 Mb/d in 2035, the
lowest since 1985. Non-OECD consumption will reach 71 Mb/d by 2035 –
60% higher than in 2012.
Demand in China grows by 8 Mb/d to 18 Mb/d in 2035, surpassing the US
in 2029 (US demand falls 2.7 Mb/d to 15.8 Mb/d over the outlook period).
India and the Middle East are the next largest contributors, both growing
by 4.6 Mb/d while other non-OECD Asia sees growth of 3.1 Mb/d.
Although China provides the largest increment to liquids demand over
the outlook period, its growth volumes slow relative to those observed
over the last 10 years. During 2030-35 Chinese demand rises by only 0.9
Mb/d (versus 2.3 Mb/d for 2005-10) making India the largest contributor
to demand growth (1.3 Mb/d for 2030-35). The Middle East also sees
growth of 0.9 Mb/d during this period, and overtakes the US to become
the largest per capita consumer of oil in 2033.
Energy Outlook 2035
27
© BP 2014

28. Liquids demand growth is largest in non-OECD transport...
Five year increments
Demand by sector
Mb/d
120
Mb/d
4
Industry
Transport
Non-OECD
transport
100
3
80
OECD
transport
60
Non-OECD
ind. & other
40
OECD
ind. & other
20
0
1965
2
1
Power
0
2000
Energy Outlook 2035
2035
2010- 2015- 2020- 2025- 20302015 2020 2025 2030 2035
28
© BP 2014

29. …but growth in industry becomes increasingly important
By sector, liquids demand growth to 2035 comes primarily from nonOECD transport (16.6 Mb/d) – due to a rapid increase in vehicle
ownership – and from non-OECD industry (8.7 Mb/d, largely for
petrochemicals).
OECD demand declines across all sectors. Outside of transport there are
two main drivers: the continued displacement of oil by cheaper
alternative fuels, and the closure of uneconomic industrial plants (in
refining and petrochemicals) in favour of newer plants in the non-OECD.
In transport, declines are first driven by vehicle efficiency improvements
(despite slow growth in the OECD vehicle fleet) and then by increasing
penetration of non-liquid alternative fuels, such as natural gas.
At the global level, transport demand growth for liquid fuels slows post
2025, as efficiency gains and displacement by gas ramp up, falling below
growth in industry between 2030 and 2035. Industrial growth remains
steady since the production of petrochemicals is already an efficient
process and as yet there are no large scale alternatives to oil available.
Energy Outlook 2035
29
© BP 2014

30. Supply growth is supported initially by unconventionals…
Tight oil supply
Liquids supply by type
Mb/d
Mb/d
12
120
Russia
% of total
China
(RHS)
South America
Canada & Mexico
US
OPEC NGLs
100
OPEC crude
80
8
9%
6%
Biofuels
60
Oil sands
Tight oil
20
0
1990
4
3%
0
40
0%
Other non-OPEC
2005
Energy Outlook 2035
2020
2005
2035
30
2020
2035
© BP 2014

31. …pushing the need for OPEC growth to later in the outlook
Liquids supply will expand by over 18 Mb/d with non-OPEC production
contributing nearly 11 Mb/d of growth and OPEC crude and NGLs
accounting for the rest. Unconventionals will drive non-OPEC growth
and delay the need for higher OPEC supplies.
By 2035, growth of tight oil (5.7 Mb/d), biofuels (1.9 Mb/d), and oil sands
(3.3 Mb/d) alone will have accounted for 60% of global growth and all of
the net increase in non-OPEC production.
Tight oil will account for 7% of global supplies in 2035 while biofuels and
oil sands obtain market shares of 3% and 5%, respectively. North
America will dominate the expansion in unconventionals with 65% of
global tight oil and with Canada responsible for all the world’s oil sands
production.
OPEC crude production will not expand significantly until 2025, but by
the end of the forecast period will be up over 4 Mb/d. OPEC NGLs will
continue to expand on increasing natural gas production in the Middle
East and contribute over 3 Mb/d to growth.
Energy Outlook 2035
31
© BP 2014

32. Oil balances suggest OPEC will be challenged…
OPEC share of global supply
OPEC spare capacity
Mb/d
10
Mb/d
Spare capacity
50%
40
Call on OPEC (RHS)
45%
8
30
6
40%
35%
4
20
30%
2
0
1975
1995
Energy Outlook 2035
2015
10
2035
25%
1975
32
1995
2015
2035
© BP 2014

33. …but the experience of the 1980s is unlikely to be repeated
In our outlook, demand growth slows and non-OPEC supplies rise – both
as a result of high prices. We assume that OPEC members cut production
over the current decade. As a result, spare capacity will exceed 6 Mb/d by
2018, the highest since the late 1980s.
The market requirement for OPEC crude is not expected to reach today’s
levels for another decade before rebounding. While we believe that
OPEC members will be able to maintain discipline despite high levels of
spare capacity, cohesion of the group is a key oil market uncertainty.
The challenging decade ahead for OPEC, however, is unlikely to be a
repeat of the 1980s. At that time, spare capacity peaked at over 10 Mb/d
and the group’s share of global supply dropped well below 30%.
The key difference is the response of demand, which collapsed after the
price shock of the 1970s, due to the combination of fuel substitution and
efficiency improvements. Furthermore, spare capacity as a share of
crude production will peak at 7%, compared to 17% in 1985.
Energy Outlook 2035
33
© BP 2014

34. Supply disruptions reduce the immediate impact on OPEC…
Historical disruptions
Recent disruptions
Change since 4Q10, Mb/d
Change from pre-disruption level*, Mb/d
3
2
2
Sudans
Iran
Libya
Syria
US
Net
1
Iran (1979)
Iraq (1990)
Libya (1970)
Russia (1991)
0
1
-1
0
-2
-1
-3
-2
-4
-3
-5
3Q11
2Q12
1Q13
4Q13
0 1 2 3 4 5 6 7 8 9 10 11
*Event occurs in year 1
Energy Outlook 2035
34
© BP 2014

35. …and history suggests recovery will take time
Since the advent of the Arab Spring in 2011, supply disruptions have
become a key feature of today’s oil market. Libyan production suffered a
complete shutdown in early 2011, followed by disruptions in Syria due to
civil war, Sudan as the country split, and Iran due to international
sanctions.
By the end of 2013, disruptions in those countries had removed over 2
Mb/d from global markets. Meanwhile, US output surged due to tight oil,
nearly matching disruptions barrel for barrel. Absent those disruptions,
prices would likely have come under pressure without OPEC action.
While non-OPEC supply growth – led by unconventionals – may place
pressure on OPEC in the medium term, historical precedent suggests
that supply disruptions take years to fully recover, which could provide
some cushion for OPEC. Revolutions in Libya and Iran, war and
sanctions in Iraq, and the collapse of the Soviet Union all resulted in
pr