Trade wars like Trump's threaten U.S. oil and gas exports
Escalating trade wars could limit America's rise as an oil and natural gas exporter while further boosting renewable energy use in some countries, BP's latest long-term energy outlook finds.
Why it matters: Surging shale production — combined with growing LNG and crude export infrastructure — is making the U.S. a player in global export markets. The Energy Department sees the U.S. becoming a net exporter in 2020.
But, but, but: BP's report, which is part of its annual, wide-angle look at the global energy system over the next 3 decades, models a scenario in which global trade disputes persist and worsen.
- That would slow global GDP and energy demand growth, with the effect "concentrated in countries and regions most exposed to foreign trade."
- "The risk premia on imported energy means the fall in energy consumed is concentrated in traded fuels (oil, gas and coal), with renewable energy increasing slightly."
What they did: BP's report contrasts this "less globalization" scenario with their "evolving transitions" (ET) case, which sees national policies, tech development and other forces continuing in a way that's consistent with the recent past.
What they found: Russia's exports are crimped, but the effect on the U.S. is even greater. "By 2040, US oil and gas exports in the ‘Less globalization’ scenario are around two-thirds lower than in the ET scenario."
The intrigue: Greater protectionism would slow down U.S. demand growth for renewables compared to the ET scenario as the country uses more of its domestically produced fossil fuels.
- However, that's more than offset by greater EU and Chinese renewables demand growth relative to the ET case.
- Read the report.
- Carbon Brief compares this year's report to prior versions.
- The Wall Street Journal explores the top-level findings.