BP's projections suggest we'll need around 45 per cent more energy in 2030 than we consume today – and double what we consume today by 2050. That's going to require investment of more than $1trn a year – every year. How do we meet that demand sustainably? Certainly there will need to be changes in the energy mix. We need more low-carbon energy. And we need to use energy more efficiently. But the main point is that there is no magic solution, and we will need a wide mix of energy types in 20 years' time.
The share of renewable energy will increase, but we have to be realistic about its contribution. As of today, all of the world's wind, solar, wave, tide and geothermal energy accounts for around one per cent of total consumption. Given the practical challenges of scaling up such technologies, the International Energy Agency can't see them accounting for much more than five per cent of consumption in 2030, even with aggressive policy support.
Undoubtedly nuclear energy and biofuels will play a part, and by 2030 carbon capture technology could be deployed at scale. But there will still be a major role for hydrocarbons. Indeed the IEA analysis indicates that even in a low-carbon scenario predicated on keeping the atmospheric concentration of CO2 to less than 450ppm, hydrocarbons will remain dominant.
The good news is that we have enough reserves of oil, and especially natural gas, to last for decades and reserve estimates are rising as we develop ways of unlocking both conventional and unconventional resources. Our analysis indicates that the world has sufficient proved reserves for over 40 years of oil and 60 years of gas at today's consumption rates.
So the foundation stone of energy security is creating a diverse supply of energy – diverse in the forms it takes and diverse in the places it comes from. Today we say "there are no silver bullets". A century ago Churchill said the same thing in the language of his time when he declared that "safety and certainty in oil lie in variety and variety alone".
The energy of the future will be more than oil. But oil will still be a major part of it. The critical point is that it will be a diverse mix.
Taken from a speech given by the chief executive of BP at the London Business School last night