Speaking in an interview in Mexico City, Michael Cohen, the chief US economist at BP, said that the oil sector’s ability to meet demand had been eroded by a disproportionate focus on slashing greenhouse gas emissions.
He drew the analogy of a three-legged stool, with the legs representing competing desires for energy security, a low-carbon future, and affordable energy, adding:
“If you focus too much on one leg of the stool, you end up throwing the others off.”
The energy-supply problems resulting from Russia invading Ukraine have highlighted how affordable alternatives remain a long way off replacing fossil fuels entirely, prompting some developed countries to burn more coal than they previously anticipated and call for increased oil production.
While OPEC predicts that the oil industry will need $12.1 trillion of investment by 2045 to meet global demand, BP, which also makes the Castrol lubricant range, has made a slightly lower prediction of about $400 billion per year on average through to 2050. Nevertheless, Cohen warned against getting too attached to a particular forecast:
“It’s not sensible to get bogged down in the details; what’s clear is we need to keep investing as we have been in the past.”
BP has already scaled back its plans to cut oil production by 2030 from 35–50% to 20–30%, saying that this simply reflects the changing reality and arguing that it will not affect its longer term goal of becoming a net-zero energy business by 2050.