Middle East to remain largest oil exporter: BP
Global energy landscape is set for fast change, but the Middle East will remain a large net energy exporter and the world's largest oil exporting region through 2040, according to the 2018 BP Energy Outlook.
The Middle East remains the largest oil producer and the second largest gas producer, accounting for over 34 per cent of global liquids production and 20 per cent of gas production by 2040, according to the report.
By 2040, non-fossil fuels account for eight per cent of the Middle East's energy consumption, compared with one per cent today. Natural gas represents almost 60 per cent of the incremental energy demand growth, and it accounts for 54 per cent of the region's energy consumption by 2040, against 52 per cent today, BP forecast said.
However, according to a recent forecast from Siemens, the Middle East is expected to more than triple its share of renewable energy from 5.6 per cent in 2016 to 20.6 per cent in 2035.
Despite the growing share of renewable energy, natural gas is expected to remain the primary source of power generation in the region, accounting for 60 per cent of installed capacity through 2035.
"While the energy mix will see significant diversification over the next 20 years, natural gas will remain the prime energy source for power generation in 2035," said Dietmar Siersdorfer, CEO, Siemens Middle East and UAE.
As per the UAE' energy plan for 2050, the target has been set at 44 per cent from renewable energy, 38 per cent from gas, 12 per cent from clean fossil and 6 per cent from nuclear energy.
In the UAE, the integration of renewable, nuclear and clean fossil energy is planned to be funded with investment of Dh600 billion over the next 33 years, equating to an annual spend of more than Dh17 billion.
BP Energy Outlook forecast that the Middle East energy consumption would increase by 54 per cent by 2040, with natural gas representing almost 60 per cent of that growth. Oil and coal both lose share at the expense of gas and non-fossil fuels. The contribution of non-fossil fuels increases from one per cent today to eight per cent in 2040, led by strong growth in solar, wind (each over 20 per cent per annum) and nuclear (15 per cent per annum). Still, by 2040, solar energy will represent only four per cent of total energy demand.
Oil's share in the total energy mix is predicted to fall from 47 per cent to 37 per cent. Non-combusted energy demand will be the fastest growing sector at 3.1 per cent per annum, while industry will remain the largest consuming sector, representing 37 per cent of primary energy demand by 2040. Energy consumed in power generation to expected to increase by 1.7 per cent per annum from 2016 to 2040. Oil's share in power generation will decline from 30 per cent to 12 per cent, as the share of non-fossil fuels rises from two per cent to 24 per cent.
The Middle East region is also expected to remain the largest LNG exporter throughout the period, representing 25 per cent of global LNG exports by 2040, down from 35 per cent of the total in 2016.
The BP Energy Outlook examines the forces shaping the global energy transition between now and 2040 as well as the key uncertainties surrounding that transition. Rising prosperity is expected to drive an increase in global energy demand, with the report reviewing ways in which demand will be met over the coming decades through a diverse range of supplies including oil, gas, coal and renewables.
Under the report's "evolving transitions" (ET) scenario, which suggests what might happen if there are not any substantive disruptions of current trends, crude will account for 85 per cent of the world's total transport fuel demand in 2040, down from 94 per cent currently. Natural gas, electricity, and other fuels are each projected to account for five per cent of transportation fuel's total, according to BP Chief Economist Spencer Dale.