WSJ (BHP)
BP’s latest long-term energy outlook actually appears to offer better news for that other big London-listed commodity producer, BHP Billiton.
Demand for BP’s main product, oil and other liquid fuels, is forecast to continue rising to 103.5 million barrels per day in 2030 (consumption this year is estimated to be just over 90 million bpd according to the latest International Energy Agency projection). But at just 0.8% per year between 2010 and 2030, oil is set to have the slowest growth of any major energy source by some way.
Natural gas, with its lower carbon emissions and growing abundance in stable regions like the U.S., will continue to gain in popularity. While in 2010 it accounted for 24% of global energy consumption, compared with oil’s 34%, come 2030 the two are forecast to be almost neck and neck. Gas should have 26% of the pie by then, with oil at 28%.
But the perhaps surprising winner over the next decade is coal. In fact, BP sees coal briefly overtaking oil in terms of its share of the world’s energy mix in 2020. Coal’s last hurrah — its share of the market levels off abruptly after 2020 — comes courtesy of Asia, where China and India continue to rely on it to fuel their economic development. For China, coal exacerbates its pollution problems, but domestic reserves and coal’s cheap cost make it hard to resist in the short term.
All of which is good news for BHP, which mines coal, produces oil and has a growing presence in natural gas after last year’s Petrohawk Energy acquisition. In recent years, we’ve seen French oil major Total talk about diversifying into nuclear power and even Exxon putting money into algae for biofuels. As the global energy mix shifts, the BHP model of backing several different horses looks increasingly astute.
