Statoil Chief Economist presents to Member States’ Gas Forum Dinner

In a private dinner following the Member States’ Gas Forum, Statoil Chief Economist Eirik Wærness presented the Norwegian energy giant’s vision for what the energy landscape could look like in 2040. This was a thought-provoking event, where we learned that energy demand would be driven by a huge increase in Chinese tourists by 2040 and that a lot will depend on progress in battery technology – for energy storage and for the roll-out of electric vehicles.

Statoil’s Energy Perspectives 2015 presents three scenarios, Renewal, Reform and Rivalry. The most optimistic is the Renewal scenario, calculated specifically to stay within the target of 2°c of global warming since the industrial era. In this scenario gas is a key factor, filling in after coal use is dramatically reduced. Interestingly, the share of energy production that comes from oil and gas remains roughly the same in 2040 as it is today, while the share of renewables grows and coal use decreases. This is all complemented? by a dramatic drive for energy efficiency, which substantially cuts energy consumption.

The Reform scenario, in which current trends roughly continue, ‘new renewables’ (i.e. wind and solar) jump from their current share of 1% of global energy production to 7%. These intermittent sources of energy require new flexible energy capacity, which takes the form of an increasing share of gas. Coal, meanwhile, drops from 29% of energy production to 25%, which though an improvement, is far more than the 14% share it holds in the Renewal scenario.

Finally, the Rivalry scenario is one in which domestic concerns overshadow global climate ambitions. A drive for energy security and the economic growth of individual states means that domestic resources are exploited regardless of their carbon content. Coal use grows to 30%, and emissions are higher than both the reform and renewal scenarios.

Somewhat ironically, the 2040 GDP of the Rivalry scenario is the lowest of the three scenarios, as climate change imposes real costs and challenges growth. Correspondingly, the Renewal scenario has the highest GDP, but was described by Mr Wærness “very challenging”. The outlook, he said, was unlikely to get all of the specifics right in every scenario, but it did present clearly the choices that policymakers must make today, and suggested the very possible outcomes they may have.

Access the Mr Wærness’ presentation here, and Statoil’s Energy Perspectives here