China and India set to drive up hybrid car sales

Oil giant BP predicts they will account for more than half of all vehicles by 203

Sales of fuel-efficient, hybrid cars may have got off to a sluggish start, but ownership is set to explode to account for more than half of all vehicles sold by 2030, as improving models, government incentives and rising petrol costs escalate demand, according to BP.

In its latest "energy outlook" report, the oil giant said phenomenal demand in India and China would drive up the number of cars worldwide from 1 billion to 1.6 billion by 2030.

Although this represents an increase of 60 per cent in vehicle ownership, the total amount of energy consumed by the world's cars will only rise by 26 per cent as hybrid ownership jumps from less than 1 per cent of vehicles to represent a third.

However, the oil giant warned that, even with projected efficiency gains inside and outside the transport sector, total worldwide energy usage will increase 39 per cent by 2030 – putting well out of reach targets to keep global warming at below 2 degrees Celsius, the level at which experts agree the worst consequences of climate change could be avoided.

Coal, oil and gas will continue to dominate energy production, with each forecasted to account for about 30 per cent of the total power produced in 2030.

This has potentially huge geopolitical implications, as China will have to import more than five times the amount of coal, oil and gas as it currently does, while India will need to bring in twice as much. In Europe, imports of oil and coal will remain near current levels, while natural gas imports will rise by about two-thirds.

Meanwhile, the phenomenal growth of shale oil and gas production and widespread cultivation of biofuels in the US and tar sands developments in Canada, will transform North America from having a substantial "energy deficit" to a "small surplus" by 2030, BP said.

It sees energy generated from renewable sources, which here include wind, solar and biofuels, but not hydropower, growing much faster than the traditional fossil fuels of oil, gas and coal.

BP forecasts that renewably generated energy will grow by 8.2 per cent a year and, together with nuclear and hydro power, the non-fossil fuel contribution will satisfy 34 per cent of the additional energy demanded by 2030.

Exploration up despite spill

BP signed 80 exploration contracts last year, more than at any time since the late 1980s, despite the damage to its reputation inflicted by the Gulf of Mexico oil spill in 2010.

The contracts span 11 countries, including the Gulf of Mexico and the UK's North Sea, and cover an area the size of Italy, surprising even the company itself.

Bob Dudley, BP's chief executive, said: "After the events in the Gulf of Mexico, I thought we would have a more difficult time taking on exploration roles and being offered rights around the world than has happened."

BP was also awarded contracts to explore Angola, Brazil, Australia and China.