Energy Snapshot: Industry themes - December 2019

What would it take to accelerate towards climate goals? In the Accelerated Energy Transition scenario, primary energy demand peaks in 2029 just under 14 Btoe; lower than our base case 16 Btoe in 2040. The AET scenario requires a ramp-up in policy initiatives and carbon pricing together with much quicker advances in technology-led cost reductions in renewables. Hydrogen and carbon capture and storage (CCS) will play a role too. LNG investment will cause another wave of LNG supply through the mid 2020s. But it will need to substantially lower its carbon footprint through CCS and zero-carbon plant power supply if we are to achieve the AET scenario. Capital discipline remains a central theme as well as ESG considerations, meaning that only the best assets should be approved. Demand is weak in the short term holding Brent at current levels through 2021. Under the AET scenario, oil peaks much sooner and lower than our base case which would cause heavy downward pressure on oil prices.