Energy in 2050: OPEC’s pink oil forecasts contrast sharply with TotalEnergies’ alarming scenario of “disruption”

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Two of Big Oil’s biggest players gave up their long-term energy prospects last week: French energy company TotalEnergies and the Organization of the Petroleum Exporting Countries. They offer very different views of the world in 25 years. The European Energy Major sees a future of technology and politics; the cartel presents a vision that is very similar to today.

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TotalEnergies examines all energy demand, not just oil, and postulates a refrain now familiar to long-term European energy planners: renewables will continue to develop rapidly; the growth in demand for oil and coal will decline; and the ever-growing demand for natural gas will be the key to the energy transition. Even with a timeline measured in decades, details matter. Let’s take a closer look at two scenarios Total offers of the energy transition: Momentum and the somewhat alarming one, called Rupture.

The momentum, notes the outlook, is “based on 2050 net-zero decarbonization strategies, with China on track to achieve carbon neutrality by 2060” and includes announced climate goals and contributions determined at the level national level of other countries on the basis of the Paris Agreement. This scenario, a basic expectation, predicts a temperature increase of 2.2 to 2.4 degrees Celsius by the end of the century. The break is more aggressive: it expects countries to meet the global aspirations of the Paris Agreement with even more net zero commitments, strong public policy, technological advances and a new energy system built to scale. global.

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The momentum also creates caps on future demand for oil and coal (gas, on the other hand, continues to grow). The peak in demand for oil will come at some point in this decade. In the Outage scenario, demand for oil in 2050 is 60% lower than in 2019. Demand for coal has already peaked and demand for gas continues to grow.

OPEC, unsurprisingly, has a rather different view of oil. It presents four scenarios, only one of which has a technological lens. The oil cartel sees demand rise in one scenario, peak in another, and peak in the 2030s in another. The only drop from 2019 levels is in its most aggressive scenario, the Fast Track Policy and Technology scenario.

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OPEC’s energy transition scenario allows for more aggressive policies, but does not specify them. Technological breakthroughs play no part in his vision, but they allow for faster adoption of existing technology.

New research from the Institute for New Economic Thinking at the Oxford Martin School suggests that OPEC’s technological scenario dramatically underestimates what is possible to change transport. The researchers looked at the actual and projected costs of 50 different energy technologies and found that most models consistently overestimated costs and underestimated the deployment of renewable technologies. Solar, wind and batteries, on the other hand, have fallen in cost by about 10% per year for several decades. Today’s energy technology simply needs to continue at this pace to change the energy system of tomorrow.

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This is a scenario that Oxford researchers see as possible. Their “rapid transition” scenario assumes that “renewable energy and storage technologies will maintain their current deployment rates for a decade, replacing fossil fuels in two decades”. Its “slow transition” scenario demands that current growth rates for renewables slow immediately, with fossil fuels still dominating until mid-century. In a “no transition” scenario, each type of energy grows in proportion to its current share. According to the authors, this is essentially the worst-case scenario.

“No transition” is a lot like what OPEC expects: today, a little more. But that’s not what research suggests is possible based on decades of observation. And that’s also not what companies like TotalEnergies expect, when even their standard scenario sees demand for oil peak soon, and then decline substantially by mid-century.

Nathaniel Bullard is the Content Director of BloombergNEF.

Bloomberg.com