Escalating trade wars could limit America's rise as an oil and natural gas exporter while further boosting renewable energy use in some countries, BP's latest long-term energy outlook finds.
Why it matters: Surging shale production — combined with growing LNG and crude export infrastructure — is making the U.S. a player in global export markets. The Energy Department sees the U.S. becoming a net exporter in 2020.
But, but, but: BP's report, which is part of its annual, wide-angle look at the global energy system over the next 3 decades, models a scenario in which global trade disputes persist and worsen.
- That would slow global GDP and energy demand growth, with the effect "concentrated in countries and regions most exposed to foreign trade."
- "The risk premia on imported energy means the fall in energy consumed is concentrated in traded fuels (oil, gas and coal), with renewable energy increasing slightly."
What they did: BP's report contrasts this "less globalization" scenario with their "evolving transitions" (ET) case, which sees national policies, tech development and other forces continuing in a way that's consistent with the recent past.
What they found: Russia's exports are crimped, but the effect on the U.S. is even greater. "By 2040, US oil and gas exports in the ‘Less globalization’ scenario are around two-thirds lower than in the ET scenario."
The intrigue: Greater protectionism would slow down U.S. demand growth for renewables compared to the ET scenario as the country uses more of its domestically produced fossil fuels.
- However, that's more than offset by greater EU and Chinese renewables demand growth relative to the ET case.
Go deeper:
- Read the report.
- Carbon Brief compares this year's report to prior versions.
- The Wall Street Journal explores the top-level findings.
