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BP CEO says oil, gas to dominate energy equation for decades

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BP CEO says oil, gas to dominate energy equation for decades

Even a fast buildup of renewable energy will not prevent oil and gas from being the dominant sources of energy for the next several decades, BP plc CEO Bob Dudley said in a speech Oct. 18.

Speaking at the Oil and Money conference in London, Dudley said the most optimistic projections for alternative energy show the category falling well behind oil and gas as an energy source and the situation is one that will be nearly impossible to change anytime soon.

"Despite the attraction of renewables, the world can't run on them alone at the moment and won't for some time," Dudley said.

"Of all the energy used by the world right now, 3% comes from renewables," he said. "That might go up anywhere between 10% and 30% or more in two decades' time, depending on the speed of the transition ... And yet even with the most aggressive growth forecast for renewables, the world will likely be looking elsewhere for nearly two-thirds of its energy needs over the next two decades."

Dudley reiterated that BP is making a "strategic shift" to emphasize natural gas production, which the company views as more environmentally friendly than crude oil.

"Six of our seven new major upstream projects coming onstream this year are gas," he said, calling natural gas "another big lever for lowering greenhouse gas emissions."

The contribution of U.S. shale plays in increasing American gas demand has led to a decrease in emissions, Dudley said. "You only have to look at the situation in the U.S., where [greenhouse gas] emissions are back down to where they were in the 1990s," he said. "As you well know, that's largely because the shale revolution has produced abundant, cheaper gas, which has been displacing coal in the American energy mix."

While oil will remain a critical element of the world's energy equation, technological improvements are reducing the amount of crude required by society, Dudley said.

"Oil today is not the same as the oil in the family car when you were growing up. The engine's not the same either," he said. "Technology is having a huge impact on the amount of energy it takes to produce oil and gas and the amount of useful energy we get out of it. In the next couple of decades, the global car fleet is expected to double, going up to nearly 2 billion vehicles. Over the same time period, however, fuel demand for cars only goes up by about 25%."