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Oil drilling ship Tungsten Explorer off the coast of Lebanon on Feb. 25, 2020. Photo: Joseph Eid/AFP via Getty Images

Global oil consumption is slated to plateau early this decade even without vastly stronger measures to combat climate change, BP said in a new analysis.

Why it matters: BP now sees this moment arriving a decade sooner than last year's version of their long-term outlook for oil-and-gas, coal, renewables, cars and more.

  • The new projection signals how the COVID-19 pandemic is reshaping analysts' views of the energy future.
  • The timing of peak oil demand, and the slope of its decline, will affect carbon emissions, corporate strategies and the finances of oil-producing nations.

Driving the news: BP projects demand for liquid fuels (a rough oil proxy) entering a long plateau in the early 2020s in their "business as usual" (BAU) scenario.

  • It assumes "government policies, technologies and social preferences continue to evolve in a manner and speed seen over the recent past."
  • Oil demand plateaus at roughly 100 million barrels per day — where it was before the pandemic drove it downward — for almost 20 years, and then declines slightly through 2050.

The intrigue: In other BP scenarios, oil demand never reaches pre-pandemic levels again and declines steeply by 2050, the end of its outlook period.

  • BP's "rapid transition" case assumes policies strong enough to slash energy-related CO2 emissions by 70% by 2050. It shows oil demand falling to roughly half of pre-COVID levels by 2050.
  • Under its "net zero" scenario — which explores policies and behaviors aligned with holding temperature rise to 1.5°C above pre-industrial levels — demand falls to about one-third of pre-pandemic levels.
  • When it comes to transportation, the largest source of oil demand, all three scenarios see increasing efficiency, while the "rapid transition" and "net zero" cases both see much greater increases in electric cars and hydrogen fuels than BAU.

Where it stands: The report comes as BP is planning to diversify away from its dominant fossil fuel business in coming decades, including plans to cut aggregate oil-and-gas production by 40% by 2030.

The big picture: Oil demand across the models is "significantly affected" by the pandemic, due in part to its economic effect in emerging economies that are centers of demand growth.

  • "The experience of coronavirus also triggers some lasting changes in behavior, especially increased working from home," the report finds.

Yes, but: "We can’t predict the future; all the scenarios discussed in this year’s Outlook will be wrong," said BP chief economist Spencer Dale. Instead, BP uses these scenarios to "better understand the range of uncertainty we face as the energy system transitions to a lower-carbon world."

Go deeper

How to judge America’s climate-change responsibility

Illustration: Aïda Amer/Axios

Historically, America has emitted the most greenhouse gases of any country in the world. But over the next 80 years, the U.S. may account for as little as 5% of such emissions.

Why it matters: Installing technologies to address climate change will, therefore, be most critical in places other than America where emissions’ growth is expected to be higher, according to physicist Varun Sivaram.

Updated 35 mins ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.

48 mins ago - World

North Korea launches 4th suspected missile test this month

A news broadcast in Seoul, South Korea, of an apparent North Korean missile test on Monday morning local time. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired "two suspected short-range ballistic missiles" eastward from Pyongyang on Monday morning local time, per South Korean and Japanese officials.

Why it matters: The fourth such launch since Jan. 5 comes days after North Korea's military warned of "stronger" action if the U.S. moved to have more sanctions imposed on the country.

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