1. Home
  2. Energy economics
  3. Energy Outlook
  4. Foreword from Spencer Dale

Foreword from Spencer Dale

Published:
14 March 2022
Welcome to the 2022 edition of bp’s Energy Outlook
“This year’s Outlook describes three main scenarios – AcceleratedNet Zero and New Momentum – which explore a wide span of possible outcomes as the world transitions to a lower carbon energy system‎.”

 

Spencer Dale, chief economist

Bernard Looney, chief executive officer

At the time of writing, the world’s attention is focussed on the terrible events taking place in Ukraine. Our thoughts and hopes are with all those affected.


The scenarios included in Energy Outlook 2022 were largely prepared before the outbreak of the military action and do not include any analysis of its possible implications for economic growth and global energy markets. Those implications could have lasting impacts on global economic and energy systems and the energy transition. We will update the scenarios as the possible impacts become clearer.


In the meantime, this year’s Outlook describes three main scenarios – Accelerated, Net Zero and New Momentum – which explore a wide span of possible outcomes as the world transitions to a lower carbon energy system. Understanding this range of uncertainty helps to shape bp’s strategy, increasing its resilience to the different speeds and ways in which the energy system may transition over the next 30 years.


Developments since the previous Outlook was published in 2020 show some signs of progress. Government ambitions globally to tackle climate change have increased markedly. And key elements of the low-carbon energy system critical for the world to transition successfully to net zero – installation of new wind and solar power capacity; sales of electric vehicles; announcements of blue and green hydrogen and CCUS projects – have all expanded rapidly. There are signs of a new momentum in tackling climate change.


Despite that, other than the COVID-19-induced dip in 2020, carbon emissions have risen in every year since 2015, the year of the Paris COP. The carbon budget is finite, and it is running out: further delays in reducing CO₂ emissions could greatly increase the economic and social costs associated with trying to remain within the carbon budget. 


Although there is considerable uncertainty, some features of the energy transition are common across all the main scenarios in this year’s Outlook and so may provide a guide as to how the energy system may change over the next few decades: 

  • Wind and solar power expand rapidly, supported by an increasing electrification of the world.
  • A range of energy sources and technologies is required to support deep decarbonization of the global energy system, including electric vehicles, blue and green hydrogen, bioenergy, and CCUS.
  • Oil and natural gas continue to play a critical role for decades, but in lower volumes as society reduces its reliance on fossil fuels.
  • The energy mix becomes more diverse, with increasing customer choice and growing demands for integration across different fuels and energy services. 


The importance of the world making a decisive shift towards a net-zero future has never been clearer. The opportunities and risks associated with that transition are significant. I hope this year’s Energy Outlook is useful to everyone trying to navigate this uncertain future and accelerate the transition to net zero.  


As always, any feedback on the Outlook and how we can improve would be most welcome. 

 

Spencer Dale

Chief economist
March 2022