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BP Energy Outlook: why the oil giant's forecasts are flawed

The BP Energy Outlook 2030 is not a statistical or scientific document, Cobb writes, but rather a political one. It is not a statement about the way the world is so much as about the way BP wishes it to be over the next 20 years, he adds. 

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And so, our system is utterly reliant for its stability on the presumed correctness of optimistic long-term supply forecasts for finite fossil fuels, particularly oil, put out by BP and others. These fuels are the backbone of the world economy supplying more than 80 percent of our energy with oil supplying about a third of the total. We know—we are certain, in fact—that based on previous experience with oil wells, oil fields, and oil-producing countries, worldwide oil production will someday decline. And yet, even with the fabulously faulty record of long-term forecasts, we still put our fate into the hands of self-interested parties who tell us not to worry. We do this because somehow many of us cannot face a future which would require deep structural changes in our lives.

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Kurt Cobb is the author of the peak-oil-themed thriller, 'Prelude,' and a columnist for the Paris-based science news site Scitizen. He is a founding member of the Association for the Study of Peak Oil and Gas—USA, and he serves on the board of the Arthur Morgan Institute for Community Solutions. For more of his Resource Insights posts, click here.

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As it turns out, the BP Energy Outlook 2030 is not a statistical or scientific document, but rather a political one. It is not a statement about the way the world is so much as about the way BP wishes it to be over the next 20 years. Naturally, that includes BP continuing as one of the world’s largest and most influential corporations.

In short, the BP Energy Outlook is an exercise in wish fulfillment. The company and many who read its forecast think that if we dress up our wishes in the form of color graphs and charts, those wishes will come true—or possibly they have already come true because BP conveniently tells us so in advance.

Certainly, one of the world’s major oil companies wouldn’t mislead us on a matter as grave as the future of oil, would it?

________

P.S. For your edification here is the disclaimer on page 2 of the BP Energy Outlook 2030:

This presentation contains forward-looking statements, particularly those regarding global economic growth, population growth, energy consumption, policy support for renewable energies and sources of energy supply. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual outcomes may differ depending on a variety of factors, including product supply, demand and pricing; political stability; general economic conditions; legal and regulatory developments;availability of new technologies; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation. (emphasis added)

In other words, you shouldn’t really count on any of what you read in the forecast turning out the way BP says it will. It’s boilerplate, I know. But there is more truth to this boilerplate language than the rest of the report. Should we really be basing our energy policy on information this shaky and uncertain? The risks are wildly asymmetrical. If BP is right, then it’s business-as-usual. If they’re overly optimistic then we could be in for a period of turmoil that could destabilize the entire global economic system which will be unprepared for the consequences of a persistent decline in oil supplies. Why? Because BP and other major forecasters told us we don’t have to prepare.

P.P.S. Another astute reader of the Outlook 2030 noticed that at the end of BP’s cheery presentation, the company wrote that if its forecast comes true, we will be faced with a climate catastrophe. The forecast didn’t put it that way; but, that’s the implication of this language:

Carbon emissions from energy use continue to grow, increasing by 26% between 2011 and 2030 (1.2% p.a.). We assume continued tightening in policies to address climate change, yet emissions remain well above the required path to stabilise the concentration of greenhouse gases at the level recommended by scientists (450 ppm).

It turns out then that if the BP forecast comes true, it is actually a doomsday prophecy. Not so cheery after all.

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