2019 May Have Been Peak Year For Oil Demand, BP Trying to Pivot

BP 2020 Global Energy Outlook Released

Yesterday, the world’s leading oil producers, the Organization of Petroleum Exporting Countries (OPEC), projected a larger decrease in oil demand than was predicted earlier in the pandemic, The Hill reported OPEC also predicts an increase in demand next year, but that increase will not be as large as this year’s drop.

Indeed, the oil and gas giant British Petroleum issued a report yesterday that implied that 2019 could have been the peak year for oil demand.  They also forecast there could be between a 55% and 80% reduction in oil demand by 2050 under 2 greenhouse gas reduction scenarios. But BP was “bullish” on gas as a “cleaner” option, saying that its demand increases into the 2030s.

Why This Matters:  Big oil and gas companies like BP may be starting to pivot away from oil, while they try to remain sunny about gas.  But then The New York Times breaks a story like the one this weekend about industry lobbyists who were working hard to get the Trump administration to put in place laxer methane leak rules while knowing about the excess methane gas pollution occurring.  Pesky natural gas.”  Their words, not ours.  

BP Says Business As Usual is Unsustainable

BP says in its report, “The world is on an unsustainable path: the scenarios show that achieving a rapid and ‎sustained fall in carbon emissions is likely to require a series of policy measures, led by a ‎significant increase in carbon prices. These policies may need to be further reinforced by shifts ‎in societal behaviors and preferences. Delaying these policy measures and societal shifts ‎may significantly increase the scale of the challenge and lead to significant additional ‎economic costs and disruption.”

CNN reported that this year’s report was markedly different from last year’s when they predicted demand for oil would continue for more than a decade.  Analysts, according to CNN Business, say the pandemic accelerated the changeover to renewable energy.  BP is releasing a new strategy in which the company reportedly will make a 10 times increase in annual low carbon investments to $5 billion by 2030, “when it expects its oil and gas production to have fallen by 40% from 2019 level,” according to CNN.

Pesky Gas Flares 

The New York Times’ Hiroko Tabuchi broke the story of a recording of an oil and gas industry meeting in 2019 in which industry lobbyists lamented how methane gas flaring was giving the industry a bad name.  Apparently, on the recording, the lobbyists discuss the practice of burning it off methane that created a “huge, huge threat” to the industry’s efforts to portray natural gas as a “clean and climate-friendly” fuel source.  The lobbyists believed that flaring overall was damaging to the industry’s reputation.  One asked, “What’s going to stick with those young people and make them support oil and gas?”  As if anything could.

To Go Deeper:  This seems a bit like the drug pusher telling an addict that he’s not healthy. It’s a tough pivot for BP to make, but they have launched quite a campaign.

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