BP Annual Report and Form 20-F 2011 - Company Reporting

Above An engineer onboard the BP oil tankerBritish Gannet. At theend of 2011, we had 53international vessels.Below The controlroom at BP’s AtlanticLNG facility in Trinidad,where BP has beenoperating since 1961.Meeting the energy challengeWe estimate that there are enough energy resources available to meet theincreases in demand. As a measure of this availability, today’s oil reserves couldmeet more than 45 years of demand at current consumption rates; while knownsupplies of natural gas could meet demand for nearly 60 years; and coal couldmeet demand for up to 120 years. a Meanwhile, new technologies are improvingthe availability and affordability of unconventional fossil resources such as shalegas, oil sands and coalbed methane. And emerging renewable resources have thepotential for significant growth as their markets mature and technological advancesmake them more affordable and efficient.While energy is available to meet demand, action is also required to limitthe volumes of carbon dioxide and other greenhouse gases being emittedthrough energy use. Global economic challenges have reduced the focus of somegovernments on climate policy, at least in the short term. But the position setout at the UN’s 2010 climate change conference in Cancun that deep cuts arerequired to hold global temperature rises to 2˚C, and the commitment by bothdeveloped and developing countries in Durban in 2011 to negotiate an agreementby 2015 that requires action from all countries, suggests that in the medium tolong term an emphasis on carbon policy will return and grow. We project thatunder known and probable policy and technology, global CO 2emissions may be28% higher in 2030 than they are today, partly as a consequence of coal use inrapidly-growing economies. More aggressive, but still plausible, energy policyand technology deployment could lead to slower growth in CO 2emissions thanexpected, with emissions from energy use falling after 2020, but probably notto the extent of putting the world on a global warming trajectory that does notexceed 2˚C. And even these policies would require concerted multilateral actionfrom policymakers and a willingness by society to bear a significant cost.Energy security also represents a major challenge. More than half of theworld’s natural gas is in just three countries, and more than 80% of global oilreserves are in 10 countries, most of which are located well away from the hubsof energy consumption. The ability and willingness of OPEC members to expandcapacity and production is one of the main factors determining the dynamics ofthe oil market.Business review: Group overviewa BP Statistical Review of World Energy June 2011. These reserve estimates are compiled from officialsources and other third-party data, which may not be based on proved reserves as defined by SEC rules.Non-OECD economies drive consumption growth(billion tonnes of oil equivalent)Non-OECDOECD181614Renewables*HydroNuclearCoalGasOil18161412121010886644221990 2000 2010 2020 2030 1990 2000 2010 2020 2030Source: BP Energy Outlook 2030.*Includes biofuels.BP Annual Report and Form 20-F 2011 23