UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.

Record Description

  • Log in to access the full content

    Some of our content is available only to EI members or registered users

    Members should log in to access PDFs and complete articles. If you haven´t already, please register to access personalised saved searches and organisation contact details. Join as a member for the full range of EI benefits!

    Who can access what content?

Oil and gas will be crucial components of the worlds energy future, according to DNV GLs inaugural forecast of the energy transition. While renewable energy will grow its share of the energy mix, oil and gas will account for 44% of world energy supply in 2050, compared to 53% today. Gas will become the largest single source of energy from 2034.

The Energy transition outlook (ETO) forecast spans the global energy mix to 2050, predicting that global demand for energy will flatten in 2030, then steadily decline over the next two decades, thanks to step-changes in energy efficiency. The fossil fuel share of the worlds primary energy mix will reduce from 81% currently to 52% in 2050.

Demand for oil is expected to peak in 2022, driven by expectations for a surge in prominence of light electric vehicles (EVs), accounting for 50% of new car sales globally by 2035. However, the stage is set for gas to become the largest single source of energy towards 2050, and the last of the fossil fuels to experience peak demand, which DNV GL expects will occur in 2035.

Gas will continue to play a key role alongside renewables in helping to meet future, lower-carbon, energy requirements. Major oil companies intend to increase the share of gas in their reserves, and DNV GL expects an accelerated shift by 2022 as companies decarbonise their business portfolios.

While demand for hydrocarbons will peak over the next two decades, significant investment will be needed to add new oil and gas production capacity and operate existing assets safely and sustainably. However, the results of the ETO model reinforce the need to maintain strict cost efficiency in order to achieve the margins necessary for future capital and operational expenditure.

We have seen impressive and important innovative efforts across the energy industry, resulting in cost saving and efficiency gains. The oil and gas industry must continue on a path of strict cost control to stay relevant. Coming from a tradition of technological achievements, and having the advantage of existing infrastructure and value chains, this industry has the potential to continue to contribute to energy security and shape our energy future, says Elisabeth Trstad, CEO, DNV GL  Oil & Gas.

Increased digitalisation, standardisation and remote or autonomous operations will play a central role in achieving long-term cost savings and improving the oil and gas industrys carbon footprint. We also expect the industry to turn to innovations in facility design, operating models and contracting strategies, she added.

Looking at the renewables and carbon emissions elements of the report, our sister publication Energy World notes that the DNV GL forecast warns that the world is not on a track to meet the Paris Agreement goal of a maximum 2C rise on pre-industrial temperatures. The forecast sees energy-related carbon emissions dropping by 50% by 2050, with the 2C carbon budget exhausted by 2041 and a resulting 2.5C of warming.

Launching the ETO in London in early September 2017, DNV GLs President and CEO Remi Eriksen said that the company set out to avoid wishful thinking when outlining the forecast  and that the predicted failure to meet the Paris target should focus the minds of policymakers. This should be a wake-up call to governments and decision-makers within the energy industry, he said. The industry has taken bold steps before, but now needs to take even bigger strides.

The peaking of primary energy supply is part of the ETOs wider story in which energy use continues to decouple from global population rises, carbon emissions and especially GDP growth. This is due to the rate of energy efficiency improving faster than the rate of global economic growth in the forecast. The study suggests the worlds energy intensity (units of energy used per unit of GDP growth) will decline by a rate of 2.5%/y, almost double the 1.4%/y decline seen today.

As well as a move in China and India to more service-oriented economies, electrification and a growing share of renewables is a large part of this decoupling picture. Eriksen pointed out that the shift to renewable technologies will aid efficiency by avoiding thermal losses from coal and gas-fired power generation. DNV GL predicts that wind and solar power will each account for 36% of the global electricity mix in 2050, and by 2050 both fossil fuels and renewables will have an almost equal share of the total energy mix.

Elsewhere the report says that the energy transition will be affordable. As the energy system shifts from one that is dominated by operating costs (opex) and fossil fuels to one that is dominated by capital costs (capex) and renewables, the overall yearly expenditure on energy will remain relatively constant, it says. With a projected 130% increase in global GDP by 2050, the proportion of energy expenditure is expected to drop to 2% of global GDP in 2050 from 5% today.

DNV GL describes ETO 2017 as a central forecast, using an in-house model and the companys experience of both the fossil fuel and renewable energy worlds to come up with a single energy future  rather than range of scenarios.

Speaking at the reports launch former Shell Chairman Lord Oxburgh said the forecast had some optimistic assumptions, and that a future world may have to rely more on carbon capture and storage (CCS) and nuclear power should some of these not materialise. Meanwhile, John Knight, Head of Global Strategy at Statoil said that the decline of energy intensity to 2.5% per year was a heroic step change that would require a big change in policy.

Decarbonisation is not just an engineering challenge, it is a governance one, said Ditlev Engel, CEO of DNV GLs energy business. Bold policies are needed to enable the transition.

To download a copy of the report, visit


- News Item -
  Websites: Energy Disciplines: Energy Processes: Energy Products: Subjects: Gas markets | Oil markets | Renewables | Policy and Governance | Forecasting | Oil | Gas |

 Go back to the previous page

           Email this page.      Delicious Delicious