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Vol. 23, No.12 Week of March 25, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

BP on energy trends

Technology Outlook evaluates how energy production, use, may evolve through to 2050

Alan Bailey

Petroleum News

BP’s 2018 Technology Outlook report, published recently, presents the results of studies into potential energy trends through to 2050 conducted by BP and eight partner organizations from research institutes. The report sees a future in which natural gas will play a key role, coupled with the growing use of renewable energy sources, improved energy efficiency and the increased use of electric cars. Digital technologies will play an increasing role in the efficiency of energy production and usage, the report says.

However, the report does not attempt to make an energy forecast but, instead, examines technology trends as a means of gaining insights into what might result from technological advances.

In general, the analysis does not factor into its projections the impacts of government policies such as those for addressing climate change. The report does, however, suggest that reaching global climate change goals set in Paris in 2015 is technically achievable but would require significant policy intervention, to push technology change beyond what would happen otherwise. And, as part of its assessment the report has tried factoring a potential carbon price into its evaluation of evolving technologies around electrical power, transportation and heat generation, and the report does suggest energy technology trends that may result from a drive to reduce carbon emissions.

Wind and solar

The report anticipates rapid growth in the use of wind and solar power, with these technologies becoming major sources of electricity worldwide by 2050. The cost of the technologies is falling rapidly, driven by technical advances and economies of scale. Solar power, in particular, is growing in efficiency.

The downside to wind and solar is the intermittency of their power generation. Considerable cost will be incurred in managing this intermittency through the use of storage technologies such as batteries, and through the use of power from gas, coal or nuclear generation facilities.

Natural gas and oil

The most economical energy technology supporting reduced carbon dioxide emissions consists of the use of natural gas in combination with carbon capture, usage and storage, the report says. In fact, the report anticipates gas continuing to play a significant role as a source of power, for heating and as a transportation fuel in the transition to a lower carbon economy. However, demand for oil will likely remain robust. The report supports an International Energy Agency estimate that $600 billion per year in investment will be needed to offset oil and gas field decline and to meet growing demand.

There is the potential to achieve an around 30 percent savings in oil and gas development and production costs while also substantially increasing the volume of recoverable reserves through new technologies, the report says.

Other primary energy sources likely to remain in significant use include coal, nuclear and hydroelectricity.

The use of high temperature power plants can significantly improve the efficiency of coal-fired power generation, but the use of coal results in relatively high carbon emissions. The use of combined cycle gas-fired systems, with both gas and steam turbines, greatly improves the efficiency of gas fired power plants. Hydroelectric power is a mature technology with improvements likely to be incremental rather than transformational, the report says.

Carbon capture, use and storage technologies may come into use to reduce carbon emissions from fossil fuel plants.

Electricity storage

Technologies for storing electricity, in particular battery technologies, are advancing rapidly. The improved batteries can lower the cost of electric vehicles, while also increasing electric vehicle ranges. Battery technologies set to replace traditional lead-acid batteries may include high density lithium-ion, metal-air, solid-state and fluid-flow batteries. Hydrogen could also be used as an energy storage material.

The report suggests that, where extensive and interconnected power supply networks already exist, centralized power supplies will remain cheaper than distributed, small scale power generation systems. The use of digital technology to optimize power supply operations could create significant savings in the cost of power, while digital technology could also reduce power demand by optimizing power use, the report says.

Electric vehicles

The emergence of affordable and practical electric vehicles will probably transform ground transportation, with electric vehicles, together with hybrid vehicles, likely to account for a large proportion of the fleet of cars and other light vehicles by 2050, as the cost of these vehicles converges with the cost of internal combustion engine vehicles. The report suggests that electric car batteries are likely to fall in cost by three-quarters over that timeframe. The common use of self-driving cars and car sharing will likely impact car purchasing habits and fuel consumption. The use of liquefied natural gas will likely be competitive for trucks and some ships.

The widespread use of electric vehicles will impact power supply systems, both through increased electricity demand and through the need to be able to handle peaks in electricity usage.

The report suggests that bio-jet fuel may become a means of managing carbon emissions targets for the aviation industry. Liquid bio fuels could also be used in road vehicles, with sugarcane ethanol projected to be the cheapest biofuel option.

Heating and efficiency

Natural gas fueled systems are likely to continue to be the most common means of heating buildings. However, a push to reduce carbon emissions to limit global warming to 2 degrees C could cause an increased use of heat pumps, an electrically powered technology for transferring heat into a building. The solar heating of water could become competitive across Europe by 2050.

Energy efficiency will be key both to savings in primary energy use and to reducing carbon emissions. Efficiency improvements can come from vehicle efficiency, building design, the increased use of heat pumps and moving to the use of light emitting diodes for lighting, the report says. There is the potential to use improved efficiency to save about 40 percent of current energy use and reduce carbon emissions by up to 13.5 billion tonnes per year, the report says.

There are significant opportunities for improved efficiency in the production of industrial heat for, for example, iron and steel production. Waste heat could, for example, be recycled, the report says.

Digital technology

Continuing advances in digital technology underlie improvements in the efficiency of energy production and use. Advances in seismic data collection and processing and the use of computer-based analysis for field production optimization are rendering oil and gas production more cost effective. Technologies such as smart-grids improve power distribution and usage efficiency. Digital technology is moving along a path through increasing levels of automation and advanced networking towards autonomous machinery. Artificial intelligence appears set to open new avenues for energy production and usage efficiency.

The report also considers urban air pollution, assessing the causes of pollution in London, Los Angeles and Beijing, cities notorious for air quality problems. It turns out that the pollution arises from a variety of sources, both inside and outside the cities, including road vehicles; the use of gas for heating and cooking; and industrial sources. Diesel powered vehicles are a particular culprit in London. San Francisco has a more diverse spread of pollution sources, while in Beijing pollution comes from coal use in industry, power plants and heating, coupled with emissions from transportation.

Challenge for the future

The widespread use of energy in conjunction with industrialization has brought benefits “undreamed of by previous generations,” the report says. But industrialization has also contributed to a growing world population facing increased greenhouse gas emissions, with many people living in overcrowded, polluted cities. The challenge now is to meet an increasing demand for energy while also reducing greenhouse gas emissions and managing water and air pollution. The use of technology for improved energy efficiency coupled with a shift to lower or zero carbon energy sources will be crucial to addressing this challenge, the report says.



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