Stating that factors such as natural calamities and disasters impact the demand for energy and are somewhat responsible for the volatility in crude oil market, Christof Ruehl, group chief economist and vice-president, BP Plc, said the nuclear accident in Japan could have nations worldwide re-thinking their strategy on nuclear energy.
“This may not cause problems in the short term as the world has enough of gas and coal to deal with the situation. But the impact could be felt in the long term as countries assess the situation arising out of the Japanese experience and re-think on nuclear plants. Germany has already announced that it will have a re-look at nuclear energy which could put pressure on fuel oil in the long run. There could be an impact on coal, natural gas, and fuel oil. But that needs to be distinguished into total impact into short, medium and long-term,” he told The Hindu at an informal interaction.
He said in the coming years, there will be more demand for coal in the more competitive markets. “In the years to come, we will witness more demand for coal and probably higher coal prices. There will also be more demand for natural gas. This may not have a big impact on the oil prices,’’ he added.
However, Mr. Ruehl said the non-fossil fuels will play a very important role in the future as nations will look towards hydro power, wind or nuclear which creates electricity. “For the first time, all the non-fossil fuels in our 2030 Energy Outlook will contribute more to energy consumption growth than any other fossil fuel. This has been stated already before the disaster in Japan and this trend will grow even after the disaster,” he added.
Referring to the shift in the investment pattern of BP Plc, Mr. Ruehl said the shift in energy base was predicted a long time ago and oil companies are no exception to the changing patterns of consumption which are shifting to the developing world. “Last year we announced investments in Brazil, India, Russia and China. Oil prices are not driven by marginal costs. They are driven by all sorts of things, that is why we (BP Plc) try to find oil in places outside of these asset restrictions,” he said.
Asked about the energy mix for the future, the chief economist of BP said the ideal energy mix would be the one that minimises cost and carbon emissions and does that in a sustainable way. “When you look at fuel shares, gas is the fastest growing within fossil fuel and the only one to gain market share. By 2030 we expect that gas, coal and oil will all be at roughly 27 per cent. On the non-fossil fuel front, hydro, nuclear and renewables will each have about 7 per cent. This means that for the first time in human history, all non-fossil fuels put together will contribute more to energy consumption growth than any other fossil fuel,’’ he said.