Policy News

Tuesday 09 February 2010

Tony Hayward said that oil and gas would have a major role to play in the future energy mix

Future energy needs will not be met by renewables alone but will require "a major role" played by hydrocarbons, the chief executive of BP has claimed.

Tony Hayward, who replaced Lord Browne as head of the oil and gas major in 2007, told an audience at the London Business School that it would be foolish to rely on "ambitious" plans to expand offshore wind to meet demand in twenty year's time.

Mr Hayward said that his company's projections suggested the world would need 45% more energy in 2030 than we consume today and double today's amount by 2050.

He claimed that meeting this demand would require investment of more than $1 trillion (£640 billion) a year, every year.

This would require changes in the energy mix, Mr Hayward said, including low carbon energy and greater energy efficiency.

Mr Hayward acknowledged that the share of renewable energy would increase, most notably offshore wind through Round 3 of The Crown Estate's licensing, but claimed that the "uncertainty" surrounding such plans meant it would be "foolish to underplay the role that natural gas and energy conservation can play in reducing carbon emissions."

He said that people had to be "realistic" about the overall contribution renewables could make - and the role oil and gas would therefore have to play.

"The challenge of creating a low-carbon economy is far from easy, requiring the wholesale re-engineering of the global economy over time," he said.

"Today, all of the world's wind, solar, wave, tide and geothermal energy accounts for around 1% 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 5% 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."

However, Mr Hayward stressed that there was no straightforward answer.

"The main point is that there is no magic solution, and we will need a wide mix of energy types in 20 years time," he said.

"There is no one, silver-bullet solution or technology that will deliver a secure energy future. A diverse mix of resources and technologies will be needed."