Looking ahead to 2045, our projections show that investments of more than $12 trillion will be needed in the upstream, midstream and downstream.
Global primary energy demand is forecast to continue growing in the long-term, increasing by a significant 23% in the period to 2045.
Renewable energy will rise significantly faster than any other source of energy at an annual average of around 7.1% to 2045.
Natural gas will be the fastest-growing fossil fuel during the forecast period, driven in part by higher urbanization rates, industrial demand and its long-term replacement of coal in power generation.
The above statement is from Organisation of Petroleum Exporting Countries, OPEC, at the ongoing 2023 Nigeria International Energy Summit in Abuja.
“From the perspective of oil, we expect it to retain the largest share in the energy mix throughout the forecast period, providing nearly 29% of global needs in 2045. Global oil demand is set to increase by 13 million barrels a day (mb/d) from 2021 levels, rising to 110 mb/d in 2045”, the organisation said.
“From the regional perspective, the drivers of global energy demand are exclusively non-OECD countries. They increase by 69 mboe/d over the outlook period. And for long-term oil demand, non-OECD demand is expected to increase by 24 mb/d, driven by an expanding middle class, high population growth and stronger economic growth potential”, added OPEC.
“In terms of investment, we continue to repeat what we have said in past outlooks. Major investments are required. Looking ahead to 2045, our projections show that investments of more than $12 trillion will be needed in the upstream, midstream and downstream”.
“Given today’s urgent challenges, it is important to remember that a well-funded oil sector provides many tangible benefits to global economy. Beyond supplying an energy source that is indispensable to our way of life, the industry also provides many well-paid, highly skilled and stable jobs”, stressed OPEC.
Two alternative scenarios to the Reference Case are also presented in the WOO 2022, which have starkly different outcomes.
“The first, the ‘Advanced Technology Scenario’, addresses the push to reduce emissions that follows an alternative trajectory to the mainstream focus on substituting fossil fuels with renewable energy sources. Emissions reductions achieved over the forecast period are aligned with the long-term goals of the Paris Agreement. Compared to 110 mb/d in the Reference Case, oil demand is projected to reach 92 mb/d by 2045. However, demand is less adversely affected than in the mainstream mitigation scenarios, on the back of an accelerated use of hydrogen, CCUS and a CCE framework”, noted OPEC.
“In the second, the ‘Laissez-Faire Scenario’, faster economic growth and development needs in non-OECD countries highlight the potential for higher future energy requirements, with the continued use of oil and gas to facilitate this growth. At the same time there is no coordinated move to reduce global emissions. In this scenarios, oil demand is projected to increase to reach 115 mb/d by 2045 and incremental demand will be disproportionally distributed between OECD and non-OECD countries. Non-OECD oil demand in is projected to reach more than 80 mb/d in 2045, which is almost 5 mb/d higher compared to the Reference Case”, OPEC stated further.
“In summary, given the pace of demand growth, it remains clear that all forms of energy will be needed. There is no one-size-fits-all solution to a sustainable global energy future. This Outlook also emphasizes that wind and solar energy will grow fastest. OPEC and its Member Countries recognize the importance of renewables to broaden the energy mix and to address the global challenge of climate change. Supportive of the Paris Agreement, our Member Countries are embarking on their own ambitious plans to diversify their energy portfolios”, OPEC maintained.
“Projections also show that oil will retain the highest share in the global energy mix as demand for oil products continues to expand in the medium-term and despite plateauing demand in the long-term”.
“Moreover, given current circumstances, uncertainty to both the supply and demand outlook remains high, to a large extent also due to a lack of clarity about the extent and timeliness of investments in the energy sector. Finally, we need to remember that despite significant growth in global energy demand, energy poverty remains a major issue. It is important to remember that as of 2020, about 733 million people still remain without access to electricity and about 2.4 billion people still lack access to clean cooking solutions, accounting for one-third of the world’s population”, Opined OPEC.