Any outlook covering a period of several decades is surrounded by plenty of uncertainties that could significantly alter its projected trends. That is the key reason why those who compile these outlooks often avoid the word “forecast”, and talk instead about “scenarios” (the International Energy Agency’s World Energy Outlook) and “cases”.
BP’s latest Energy Outlook “considers a base case, outlining the ‘most likely’ path for global energy markets over the next 20 years based on assumptions and judgments about future changes in policy, technology and the economy”. Sixteen of its around 100 pages focus on “key uncertainties” to 2035, which include the possibility of a more rapid penetration of electric cars, increased energy efficiency and a faster-than-anticipated transition to a lower-carbon economy.
“The uncertainty about future energy trends increases substantially as we look beyond the Outlook’s 20-year horizon, since there is increasing scope for the existing stock of machines and buildings to be replaced and for new technologies to alter fundamentally the way in which the world uses energy,” BP says.
And although most people who follow the energy industry are aware that the list of uncertainties is long, BP chief economist Spencer Dale still managed to surprise journalists when he was asked to name one thing that was not mentioned in the latest Outlook but could play a significant role going forward. He was even offered marine LNG or renewable feedstock as possible answers. Instead, Dale talked about… 3D printing.
“One thing I think could really be transformative is additive manufacturing — artificial intelligence, 3D printing and so on,” he said. “Suppose additive manufacturing really took off, so we do 3D printing and more and more things. The whole nature of trade, the whole nature of supply chain changes fundamentally. I do not need to ship goods from one part of the world to another — I print it. And I do not need lots and lots of supply chains.”
Dale says he has recently had a conversation with a company that builds aeroplane engines. He was told that while one particular traditionally made component has about 300 different parts in it, the one that has been 3D printed has only one part. The traditional one has 40-50 different supply chain elements, while the 3D-printed version has none – and still works, Dale said.
“Additive manufacturing, 3D printing and artificial intelligence have implications for everything — but as part of that, it has implications for energy, because energy is part of that process,” Dale said.