Hello everyone. I'm Spencer Dale, BP's Chief Economist, Thank you all for joining us today, both here in St James, London at BP's headquarters and also via the web from around the world. I think at last count we had over 8,000 people registered for today's webcast, Thank you very much for joining. You're all very welcome. The combination of Covid and the outbreak of the war meant that last year's launch of the Energy Outlook was relatively low key. It's super cool to be back with an in-person audience and a live webcast. Thank you all very much for sparing the time. Whilst I'm sharing the love, let me also say a big thank you to the rest of the team. Many of them are here scattered around, who've been working hard over the last couple of months, producing the Energy Outlook. Lots of late nights, lots of hard work, so thank you very much, guys. It was a great team effort. The past year has been dominated by the terrible consequences of the Russia-Ukraine war and its awful toll on lives and communities, and our thoughts and hopes are with all those affected. The war is obviously ongoing with no end in sight, and as such, any analysis of its possible implications has to be tentative. It already seems clear that the shadow cast by the war is likely to be wide and long-lasting, spreading across economic, political and social dimensions of our lives. From an energy perspective, global energy policies in recent years have been most focused on the importance of decarbonizing the energy system and the transition to net zero. The disruptions to Russian energy supplies and the resulting energy shortages and price volatility serve as a reminder that we also need to take account of security and affordability of energy. These three dimensions of the energy system, security, affordability and sustainability, make up what we know as the energy trilemma. The importance of the trilemma is that any successful and enduring energy transition needs to address all three of its elements. In that context, this year's outlook has a special focus considering the possible implications of the Russia-Ukraine war. In terms of the plan for today's presentation, after a brief overview of the main scenarios used in this year's outlook, I want to describe our analysis of the possible impact of the war on global energy. I will then summarize some of the other key highlights from this year's outlook in the context of four key trends likely to dominate the future of energy. That's going to take the first half of today's session, and for the second half, I'm delighted to say that I'll be joined by two internationally renowned energy experts, Elizabeth Press, Director of Planning and Programme Support at IRENA, the International Renewable Energy Agency, and Jason Bordoff, Founding Director of the Center on Global Energy Policy at Columbia University, and Co-founding Dean of the Columbia Climate School. Elizabeth and Jason will join me to talk about some of the issues raised in this year's Energy Outlook, during which time you will also have your chance to put your questions to them. In between all of this, we're also going to conduct a mini-survey just for all of you watching online on some of the issues raised by this year's Energy Outlook. We've got an action-packed hour and a half over the next hour and a half, stay with us for that period. Let me start by briefly outlining the main scenarios considered in this year's Energy Outlook which, as in the previous two outlooks, uses three main scenarios: Accelerated, Net Zero and New Momentum to explore possible developments in the energy system out to 2050. Accelerated and Net Zero, shown here in orange and blue, consider how different elements of the energy system might change in pathways which achieve a substantial reduction in carbon emissions. In that sense, they can be viewed as what if scenarios. What elements of the energy system might need to change if the world collectively takes action for carbon emissions to fall by around 75% by 2050 in Accelerated, and over 95% in Net Zero? Both scenarios are underpinned by a significant tightening in climate policies. Net Zero also embodies a shift in societal behavior and preferences which further supports the transition. The third scenario, New Momentum, shown here in green, is designed to capture the broad trajectory along which the energy system is currently traveling. It places weight on the marked increase in government ambitions and pledges for decarbonization seen in recent years, as well as on the manner and speed of progress seen in the recent past. Carbon emissions peak in the 2020s in New Momentum, and by 2050 are around 30% below 2019 levels. With apologies for those of you who've been to previous launches of the Outlooks and heard me say this before, I'm going to say it again and I'm going to keep on emphasizing it, all these scenarios will be wrong. We can't predict the future. We know we can't predict the future. We don't have a central or reference scenario. We don't attach relative weights or probabilities to the different scenarios. The scenarios are designed to span a wide range of possible outcomes of the energy system out to 2050. Considering pathways from a relatively slow, shallow path, decarbonization pathway at the top, shown in New Momentum. All the way down to a far faster, deeper decarbonization pathway shown by Net Zero and all the possible outcomes in between. That range of feasible outcomes can then be used in two ways. First, by identifying aspects of the energy system transition which are common across the three scenarios, it can help shape core beliefs about how the energy system might evolve over the next 30 years. All these scenarios will be wrong, but if there are common trends across all three, it may increase confidence that those trends will materialize in some form. Second, and more generally, by better understanding the range of uncertainty we face as the energy system transitions, the scenarios can help shape a strategy that is resilient or robust to the different possible speeds and nature of the transition. One other point to note, the scenarios only extend to 2050 and don't model all forms of greenhouse gases or all sectors of the economy, such as agriculture or land use. As such, it's not possible to map directly between these scenarios and their implications for the implied increase in average global temperatures out to 2100. It is possible, however, to compare the carbon emissions and profiles implied by these scenarios shown here, with the scenarios included in the IPCC Sixth Assessment Report published last year. As shown here, the cumulative carbon emissions out to 2050 implied by Accelerated lie pretty much in the middle of the corresponding range of the IPCC scenarios, consistent with maintaining temperatures below two degrees C. This dot here shows the cumulative carbon emissions out to 2050 in Accelerated, compares that with the range of IPCC scenarios, consistent with maintaining temperature rises below two degrees, you can see it's pretty much bang in the middle. Likewise, cumulative carbon emissions implied by Net Zero lie in the range of scenarios of the IPCC scenarios, consistent with maintaining temperature rises to 1.5 degrees with no or limited overshoot, albeit towards the top end of the range, largely reflecting the faster reduction in coal consumption over the next 10 years or so in the IPCC scenarios than assumed in Net Zero. In that sense, although there's no direct mapping, you can think of Accelerated as being broadly consistent with IPCC below two degrees scenarios and Net Zero with the 1.5 IPCC scenarios. Using these scenarios, the first thing I want to do today is describe how we've thought about the possible implications of the Russia-Ukraine war, and we modeled the war as operating through three main channels: heightened energy security, weaker economic growth, and a change in composition of global energy supplies. We take those in turn. The heightened focus on energy security is assumed to cause countries to want to reduce their dependency on imported energy and instead consume more domestically produced energy. It also gives greater incentive to accelerate the improvements in energy efficiency, which has the benefits of reducing the need for all types of energy. History has taught us that threats to energy security can have large and persistent impacts on the structure of global energy. Think back to the impact of the last significant energy security shock in the 1970s. The share of oil in global energy peaking in 1973 following the oil embargo, the creation of Strategic Petroleum Reserves, the massive build-out of nuclear energy in France. Threats to energy security can have large and persistent effects. The war is assumed to weaken economic growth in two ways. In the near term, the higher food and energy prices caused by the war leads to a period of weak global growth, which persists over the next few years before gradually dissipating. That's the commodity price shock we're all living through now. Further out, the war is assumed to reduce the pace of global integration and trade as companies reduce their exposures to international shocks and heighten their focus on domestic resilience. Think less offshoring, shorter supply chains, more fragmented trade flows. This slower pace of globalization is assumed to lead to a small reduction in average or trend economic growth over the next 30 years. The reduction in trend growth is small in any single year but gradually compounds over time. The future of Russian energy supplies is obviously highly uncertain. For this year's Energy Outlook, we assume there's a persistent reduction in Russian exports of hydrocarbons. In the near term, the effect largely stems from the demand side, reflecting a combination of voluntary and mandatory sanctions on Russian energy exports. Further out, the weaker exports come largely from the supply side, as the sanctions affecting Russians' access to foreign investment and technology are assumed to ease only gradually. That's how we've gone about modeling the effects of the war. In terms of its impact, and using New Momentum to illustrate the effects, the war is assumed to reduce energy consumption. As shown here, total final energy consumption is around 3.5% lower in 2035, with that effect growing to around 6% lower by 2050. In 2035, almost half of the reduction comes from faster gains in energy efficiency. That's the bit shown in the dark blue. With the remainder stemming from the impact of weaker economic growth shown in the light blue. The increasing downward revision in energy demand in the second half of the outlook is driven by the effect of weaker economic growth as the impact from the slower pace of globalization gradually builds. For me, the really interesting thing is how this reduction in overall energy consumption is spread across the different fuels. Shown here for primary energy, where the impact, where you can see the impact has significant variation across the different fuels. In particular, there are disproportionately large falls in oil and natural gas. You can see that here. In terms of primary energy, primary energy in 2035 in New Momentum falling by around 2%, but oil, here in green, and natural gas, in red, falling by a lot more. These outsized falls stems from heightened energy security concerns. Oil and natural gas are the two most heavily traded fuels. As countries and regions seek to reduce their exposure to geopolitical shocks, and particularly their dependency on imported energy, the greatest impact falls on imports of oil and gas. In contrast, the demand for renewables and nuclear energy, shown here in orange and yellow, which are predominantly produced and consumed domestically, increase in absolute terms in New Momentum. That's despite the fall in overall energy demand. Overall energy demand falls, but despite that, both renewables and nuclear energy increasing, reflecting the added attractiveness of renewables and nuclear energy, given their small exposure to geopolitical risks. Coal, shown here in black, is somewhere in the middle. Coal is also traded internationally, many of the large and fast-growing Asian markets, including China and India, have large domestic resources of coal. For these markets, coal has an attraction in terms of its intrinsic security of supply. The big picture point here, imports of oil and natural gas are most exposed to geopolitical risk. In contrast, non-fossil fuels, wind and solar, bio, nuclear, and hydro, are all predominantly produced and consumed domestically. Increased energy concerns leads to a shift away from imported oil and gas towards domestically produced non-fossil fuels, and in so doing, helps to accelerate the energy transition. The extent of that acceleration depending in part on the impact on coal. If we dig into this acceleration effect in a little bit more detail, this chart considers oil and gas imports by the EU, China, and India, which together account for close to half of the world's total imports of oil and natural gas. All three are heavily exposed to energy security risks. China and India currently import between 75%-85% of the oil they consume, and between 40%-55% of their natural gas. The EU is obviously at the epicenter of the current concerns, given its past dependence on energy imports from Russia. In all three regions, the heightened energy concerns leads to a permanently lower share of imported oil and gas in primary energy. In all three, you can see this downward shift in the share of imported oil and gas in primary energy. With their combined imports of oil and natural gas in 2035 over 10% lower in New Momentum. Moreover, the limited scope to increase domestic production of oil and gas in those countries means the reduced share of imported oil and gas is offset largely by greater use of domestically produced renewables. The increase in energy security concerns as a result of the war is likely to accelerate the energy transition. In terms of overall carbon emissions, the impact of the war reduces carbon emissions across the whole of the outlook in New Momentum. That reflects both the improvement in the carbon intensity of the fuel mix, shown here in the green bars, so the green bars showing that the fuel mix is becoming progressively cleaner as the world shifts away from imported oil and gas towards domestic non-fossil fuels. It also reflects the impact of weaker economic growth, shown in the yellow bars, with that impact growing over time as the effect of weaker trade growth gradually builds. To give you some idea of the size of this effect, the falling reduction in carbon emissions in the second half of the outlook in New Momentum of around 2 Gt or 2.5 Gt, that's roughly equivalent to the amount by which carbon emissions fell in 2020 as a result of the COVID lockdowns. Not a game changer, but still a sizable reduction. If we compare the corresponding downward revision to carbon emissions in Net Zero, you can see the impacts from both energy security and weaker economic growth are smaller in Net Zero. The explanation here is a bit tricky, so let's see how successful I am at trying to explain this to you. The smaller impact from energy security, why the green bar is smaller. That stems from the fact for the greater decarbonization assumed in Net Zero, which results in the energy mix having a greater proportion of non-fossil fuels. Since there's more non-fossil fuels in Net Zero, and since those non-fossil fuels are produced locally, it means the exposure of countries to imported energy, and hence energy security concerns, is less significant in Net Zero. As energy security goes, concerns go up, you're less worried about it, so you have less impact, and the green bars are smaller. Likewise, the lower carbon intensity of the fuel mix in Net Zero means the reduced level of energy demand stemming from the weaker GDP profiles leads to a smaller reduction in emissions. With that impact from weaker GDP, as you can see, getting progressively smaller over time, the size of those yellow bars getting progressively smaller over time. Less GDP, less energy, but the energy you're consuming is becoming less and less carbon intensive, and so the overall energy emissions you're saving are less. The general point here is that as the world decarbonizes, non-fossil fuels and energy vectors, such as electricity and low carbon hydrogen, play an increasing role. Since those energy sources tend to be predominantly domestic, it means energy security concerns, or at least those related to imported energy and exposures to geopolitical risks, naturally become less acute. Put simply, decarbonization and energy efficiency are the best forms of energy security. Finally, in terms of the impact of the war, I wanted to zero in on natural gas flows, which have seen the greatest disruption. The desire for countries to reduce their dependency on imported gas, combined with weaker economic growth, means global gas demand in 2030 in New Momentum is around 230 BCM, about 5% of aggregate gas demand lower in 2030 as a result of New Momentum. About, that gas demand about 230 BCM lower. In terms of how that weaker gas demand is met from the supply side, not surprisingly, a majority of the reduced demand is matched by lower pipeline gas trade, shown in the purple here. You can see a very significant reduction in pipeline trade of gas, and that's largely reflecting the almost total elimination of Russian pipeline exports to the EU. Much of the remaining supply adjustment comes in the form of lower production of gas for domestic use. What I found most interesting is that LNG trade by 2030 is largely unchanged. The LNG here is the turquoise bar, and you can see that's relatively unchanged in 2030 in New Momentum. Within that, the restrictions limiting Russia's access to external finance, and importantly to Western technology, mean the significant expansion in Russian LNG exports, which looked likely prior to the war, fails to materialize. That's shown here by this sort of downward revision in the prospects for Russian LNG exports out to 2030, and that's then offset by stronger growth in non-Russian LNG exports, with the US accounting for more than half of that upward revision. Overall, LNG exports largely unaffected, but a switch in the composition, with weaker growth in Russian exports offset by stronger growth in exports from other parts of the world, most notably the US. That's what I wanted to say in terms of the direct impact of the war on the energy outlook. Before moving on to look at some of the trends set to dominate global energy over the next 20-30 years, I wanted to flag one other significant change over the past year, which is the passing of the Inflation Reduction Act, IRA, in the U.S. As I'm sure many of you know, IRA includes a significant package of largely supply-side measures supporting low-carbon energy sources and decarbonization technologies in the U.S. This chart here shows carbon emissions for the U.S. in the three scenarios, and the impact of IRA is concentrated in New Momentum in green, providing significant support and incentives to a range of low-carbon technologies, including wind and solar power, low-carbon hydrogen, especially Green hydrogen, electric vehicles, biofuels, and carbon capture and storage. One striking result of the analysis is the introduction of IRA had relatively little impact on the decline of US emissions in Accelerated and Net Zero. From a modeling perspective, this reflects the scale of policy support already embodied in those scenarios. I think far more importantly, from a broader policy perspective, the fact that a policy as big and as bold as IRA doesn't make a meaningful difference to these scenarios highlights the sheer scale of policy measures needed to support these types of rapid decarbonization pathways consistent with meeting the Paris climate goals. In that context, it's worth noting that largely for simplicity, the possible impact of IRA on countries and regions outside of the US was not considered in this year's outlook. In practice, however, IRA has the potential to have positive spillover effects for other parts of the world, helping to reduce global technology costs, expand international supplies of low-carbon energy, and perhaps by encouraging other countries and regions to offer similar types of incentives. If that is the case, that would further increase the impact of IRA. We can perhaps get into some of these issues raised by IRA in our discussions with Elizabeth and Jason in a moment. Switching gears now, I want to move away from the factors talking about what caused our Energy Outlook to change, and instead consider some of the big picture trends which look set to drive global energy in the future. Linking it back to the point I made at the beginning of the presentation about using the outlook to identify trends which are common across a range of different pathways, this year's, the scenarios in this year's outlook are dominated by four common trends shown here. Those four common trends are this declining role for fossil fuels, offset by gradually increasing role for renewable energy led by wind and solar and bioenergy. That increasing role for renewable energy supported and underpinned by the increasing electrification of the energy system on the bottom left and together with a growing role for low carbon hydrogen. If we consider those in turn, starting with the diminishing role of hydrocarbons, the share of fossil fuels in primary energy declines, you can see from this chart here, from around 80% in 2019 to between 55% and 20% by 2050 across the three scenarios. Strikingly, the total consumption of fossil fuels declines in all three scenarios, which would be the first time in modern history that there's been a sustained fall in the demand for any fossil fuel. If we look at the trends for oil and natural gas underpinning this declining role, starting first with oil, global oil demand plateaus at some point over the next 10 years in all three scenarios before declining thereafter. The biggest declines are in Accelerated and Net Zero, the orange and blue lines, with demand falling to between 40 million and 20 million barrels a day by 2050. You can see here really significant falls in oil demand in Accelerated and Net Zero. Even in these scenarios, which are consistent with meeting the Paris Agreement, oil continues to play a major role in fueling the global economy over the next 10-15 years, with the world consuming between 70 million-80 million barrels of oil in 2035. Oil demand in New Momentum is stronger, remaining close to 100 million barrels a day through much of this decade, after which it gradually declines to around 75 million barrels a day by 2050. If we step back from the scenarios, oil demand has increased almost consistently over the past 100 years. Moreover, it's likely to receive a considerable boost in coming years from the expanded consumption in emerging economies as prosperity and living standards increase. Given that, it begs the question of what needs to change for oil demand to start to decline on a sustained basis. The single biggest factor in these scenarios is the falling use of oil within road transport, which accounts for upwards of 2/3 of the total reduction in oil demand across the three scenarios. As shown here for Accelerated, this reflects a combination of the increasing efficiency of the vehicle fleet, shown here in the burgundy squares, and the growing electrification of road vehicles in light blue. The impact from vehicle efficiency dominates over the next decade or so, but this balance gradually changes over time, such that by 2050, the electrification of road transportation is the key factor. That's the outlook for oil. If we turn to natural gas, for most of the major energy sources and fuels considered in the Outlook, although significant uncertainty about the speed and extent of any change, the broad direction of travel implied by the three scenarios over the next 30 years is pretty clear. Oil and coal down, wind and solar, bio, low carbon hydrogen all up. The prospects for natural gas are far less clear. After rising in the near term, natural gas demand in Accelerated and Net Zero declines, such that by 2050, it's between 40% and 55% below its current levels. In contrast, gas demand and New Momentum grows almost throughout the entire Outlook, such that by 2050, it's around 20% above its 2019 levels. These contrasting prospects reflect the outcome of two opposing trends. Increasing demand for natural gas in emerging economies as they grow and industrialize, offset by a transition away from natural gas to lower carbon energy led by developed economies as the world decarbonizes. The prospects for natural gas at any point in time depends on the relative strength of those two opposing forces. One trend which is common across all three scenarios, regardless of the speed at which oil and gas demand declines, is the need for continuing investment in upstream oil and gas. Even in Accelerated Net Zero, in which oil and gas demand fall materially, we just saw how much they fell, the natural rate of decline of existing production is even greater, meaning that continued investment in upstream oil and gas is required to meet future demand. For those of you familiar with these types of outlook, the need for continuing investment in upstream oil and gas, even in Paris-consistent scenarios, is relatively well understood. Important to remember, and indeed sometimes forgotten, but not particularly new. What is perhaps more striking is how events over the past year have highlighted the vulnerability of the energy system to relatively small changes in global supplies of oil and natural gas. Reductions, or even just fears of reductions in Russian exports of oil and gas amounting to just a small fraction of global supplies led to energy shortages and price spikes, resulting in severe economic and social costs. For me, the big lesson from these events is, yes, the world needs to see a decisive transition away from the use of hydrocarbons to achieve the Paris goals, but this transition needs to be orderly. By orderly, I mean a transition in which there's a mix of policies operating on the demand for hydrocarbons as well as on supply, such that the demand for hydrocarbons falls in line with available supplies. If policies and behaviors are focused largely on reducing the supply of hydrocarbons with less attention paid to demand, they risk leading to future periods of energy shortages and higher prices. As we've seen all too clearly over the past year, this can cause significant economic and social costs, which in turn can risk undermining the legitimacy of the energy transition. The world needs to see a decisive and orderly transition away from hydrocarbons. That's what I wanted to say on that first trend in terms of fossil fuels. If we go back to our four common trends, and this time zoom in to the rapid growth in renewable energy, led by strong growth in wind and solar power and also bioenergy. The share of renewables in global primary energy increases, you can see here, from around 10% in today to somewhere between 35% and 65% by 2050. The largest source of that growth is in wind and solar power, with installed capacity increasing by around 15-fold over the Energy Outlook in Accelerated and Net Zero, and by nine-fold in New Momentum. By 2050, wind and solar power account for around two-thirds of global power generation in Accelerated Net Zero, helped by the increasing flexibility of power systems, allowing higher levels of variable power sources to be integrated. A good news story for wind and solar power, but two important caveats. First, as shown in this chart, the growth in wind and solar capacity implies a significant acceleration in the pace of build-out of wind and solar capacity relative to anything seen in the past. The way to read this chart is these ranges here for different parts of the world show you the range of build-out of wind and solar capacity, the average gigawatts per year implied by the scenarios over the next 10 years or so. We then compare those with the maximum historical rate ever achieved in the past. You can see, you can only achieve that sort of real build-out that we want to see if we see the massive acceleration. That will only be possible if a range of enabling factors also scale at a corresponding pace. The expansion of transmission and distribution capacity, the speed of planning and permitting, and the availability of critical metals used in increasing electrification of the energy system. The cost competitiveness of wind and solar is a necessary condition for their rapid expansion, but not sufficient. The second and related caveat is that in Accelerated and Net Zero, around 70% of the required investment in new wind and solar capacity occurs in emerging markets. For that to happen, wind and solar developers in those economies must have good access to capital and finance. To repeat, cost competitiveness of wind and solar is a necessary but not sufficient condition for their rapid expansion. The good news is that these enabling factors are man-made. They don't rely on technological breakthroughs. We don't need some huge innovation. We just need sufficient collective societal and government will to make them happen. That strong growth in renewable energy underpinned by the increasing electrification of the energy system at the bottom left here. Final energy demand, electricity demand increases by around 75% by 2050 across all three scenarios, with a share of electricity in total final consumption increasing from around 20% today to between 35% and 50% by 2050 across those three scenarios. The vast majority of this growth, around 90%, is accounted for by emerging economies, supported by rising prosperity and living standards. The increase in electrification is broadly based across all end use sectors. The greatest scope for electrification is in the building sector, and you can see the building sector here, and the increase in electrification in the building sector, where at least half of final energy demand is electrified by 2050 in all three scenarios, with a significantly greater share in Accelerated and Net Zero, you can see here, largely accounted for by greater adoption of heat pumps. The transport sector has the largest increase in the share of electricity from almost nothing today to this increasing share by 2050, driven by the electrification of road transport. By the mid-2030s, electric passenger cars account for the majority of new car sales in Accelerated and Net Zero, and for around 40% of sales in New Momentum. As a result, the number of electric cars and light duty trucks, shown in blue here for Accelerated, increases from around 20 million in 2021 to between 1.4 billion and 2 billion in 2050, accounting for between 50% and 80% of the vehicle park. A significant electrification of road transportation in all three scenarios. That increasing electrification of the energy system is complemented by the growing use of low carbon hydrogen, which acts as a carrier of low carbon energy for use in processes which are difficult to electrify. The role for low carbon hydrogen is dependent on there being a material decarbonization of the energy system. As such, its use is most pronounced and Accelerated in Net Zero, with growth accelerating in the 2030s and 40s as production costs fall and emission standards tighten, allowing low carbon hydrogen to compete against incumbent fuels. You can see in all three scenarios, relatively small muted growth in hydrogen out to 2030, then an acceleration in both Net Zero and Accelerated through the 2030s and 2040s, with more muted growth in New Momentum. Low carbon hydrogen is used in hard to abate processes, especially in industry, shown here in red, and transport in blue. Within industry, there's a particularly significant role in the iron and steel sector, with low carbon hydrogen acting as an alternative to coal and natural gas as both a reducing agent and an energy source. Within transport, the use of low carbon hydrogen is concentrated in the production of hydrogen-based fuels used to decarbonize long distance transportation in marine and aviation, as well as in its pure form for long distance road transportation. That growing use of hydrogen-based fuels in Accelerated and Net Zero happens alongside strong growth in bio-based fuels, especially bio-based sustainable aviation fuel, BioSAF, which accounts for between 30% and 45% of aviation demand by 2050. On the supply side, low carbon hydrogen is dominated by a combination of Green hydrogen made via electrolysis using renewable power, and Blue hydrogen made from natural gas and coal, with the associated carbon emissions captured and stored. The cost of blue hydrogen is generally lower than green in most parts of the world today, but that cost differential is eroded, as improvements in technology and in manufacturing efficiency lower the price of both renewable power and electrolyzers. That's further supported by the types of incentives included in the U.S. Inflation Reduction Act. As a result, green hydrogen accounts for around 60% of low carbon hydrogen in 2030 in Accelerated Net Zero, with that share shown here increasing to about 65% by 2050. Although blue hydrogen accounts for a smaller share, it acts as an important complement to green hydrogen, providing a lower cost alternative in some regions, as well as providing an important source of firm on non-variable low carbon hydrogen supply. As the demand for low carbon hydrogen expands, there's increasing amounts of international trade. In the outlook, the form of that trade is assumed in large part to depend on the final use of hydrogen. The high cost of shipping pure hydrogen means that for activity and processes that require hydrogen in its pure form, such as high temperature heat processes or use in road transport, this is assumed to be imported via pipelines from regional markets. In contrast, for activities that can make use of hydrogen derivatives, such as ammonia and methanol in marine, the lower cost of shipping these derivatives allows seaborne imports from the most cost-advantaged locations globally. That's all I wanted to say on the four trends set to dominate the future of global energy. Let me conclude by briefly summarizing some of the key takeaways from this year's outlook. The Russia-Ukraine war is set to have a lasting impact on global energy. Perhaps most fundamentally, as the world focuses on decarbonizing the energy system, it reminds us all that we can't lose sight of the other two dimensions of the energy trilemma: energy security and affordability. On security, heightened concerns as a result of the war are likely to accelerate the energy transition, encouraging the adoption of domestically produced non-fossil fuels at the expense of imported oil and gas. On affordability, the substantial economic and social costs caused by the energy shortages and price volatility over the past year highlight the importance of there being an orderly transition from hydrocarbons, with policies ensuring demand falls in line with available supplies. Any successful and an enduring transition will need to take account of all three dimensions of the energy trilemma: security, affordability, and sustainability. In that context, just remembering that simple point, decarbonization and energy efficiency, the best forms of energy security. The Inflation Reduction Act has significant implications for the U.S. and potentially for the rest of the world, but it also serves to highlight the scale of policy support likely to be necessary to achieve these types of fast and deep decarbonization pathways consistent with meeting the Paris goals. Finally, the future energy system looks set to be dominated by four trends, with these four trends playing a key role in forming our core beliefs. A declining role for hydrocarbons, but with oil and natural gas still playing a critical role in the energy system over the medium term, even in Paris-consistent scenarios. Rapid growth in renewable energy led by wind and solar and bioenergy, including a growing role for biofuels. Increasing electrification of the energy system, including transportation. A growing role for low carbon, Green and Blue hydrogen. A long list of takeaways from this year's Energy Outlook. Perhaps for me, the most significant being the role of the war in reminding us of the importance of the need for the energy transition to address all three elements of the energy trilemma. I should say that today's presentation, although all long, only covered a fraction of the material in this year's outlook. If your interest has been piqued, please do look at the full outlook available online at bp.com, and let us know what you think. We'd love to hear your views and comments on what we've produced. Before I invite Elizabeth and Jason to join me, we're going to run the mini survey for all of you viewing online. For you in the room, apologies you can't take part in the survey, but you can do it in your head. All right? You can think about what you think. There's nothing particularly deep or profound here, but we just thought it'd be interesting to gauge your views on three questions related to some of the issues raised by this year's Outlook. The way this is going to work is I'm going to pose three questions, and they're going to appear on your screen at the same time, and you will have a chance to choose your preferred answer. I'm going to give you about 30 seconds to make your choice before we move on to the next one. I'm sure you're not, but if you are distracted looking at something else as you're listen to this presentation or you may be making a cup of tea, stop, go to your screens, get your fingers next to your mouse and your buzzers so you get ready to make your choices. Okay. The first question I'm going to say is: What effect will the Russia-Ukraine war have on the speed of the energy transition? We've given you five options here, ranging from accelerate it a lot, all the way through to slow it a lot. This is your chance now to make your choices. You can make your choices in the room as well. Okay. Hopefully, you've all done that now. That's it. We're going to move to question two, which is: What do you think will be the single biggest factor constraining a rapid build-out of wind and solar capacity? We've given you five possible constraints for you to choose between here. The cost of wind and solar, permitting delays, cost of finance, particularly in emerging economies, slow expansion in distribution networks, or a shortage of critical raw materials. No, you're not allowed to pick all of the above. You have to pick one. Julia, you can't pick all five. You have to pick one. Okay? Now this is your chance at home to pick the one you think you'd like to pick as the single biggest constraint. Okay. Hopefully, you've picked. That's a hard question, this one. Question... Finally, question number three: What impact will the Inflation Reduction Act have on the speed of the energy transition? We've given you four possible answers this time, giving various options for the impact on the speed of the transition in the U.S. and in terms of the impact on the rest of the world. Okay? Four options for you to choose. Say it quickly. You only have to pick between four, not five this time, it's a lot easier. Hopefully you've picked those five. As I said, what we will do is I'm going to stop now. Hopefully, you've managed to all make your answers. I said, what we're going to do is reveal the results of the survey at the end of the panel discussion. We're going to have the panel discussion. We're collecting the results during the panel discussion, then we'll come back. I must admit, I'm quite intrigued to see what everybody picked. We will see what everybody picked. Now without any further delay, let me stop there and invite onto stage, Elisabeth Press of IRENA and Jason Bordoff of the Center on Global Energy Policy at Columbia University. Thank you, guys. Thank you. Thank you again, Elisabeth and Jason, for flying all over the world to come here today. Really appreciate it. I just went on for far too long talking about the Russia-Ukraine war and the effects that could have on energy, the energy system, the speed of the energy transition. Let me just start, I guess, with you, Elisabeth. Your sense about how you all think about the impact of the war from your perspective and how it may affect global energy and some of the members of IRENA. Yeah. Thank you. Thank you, Spencer, and thank you for inviting us to be part of this conversation and the excellent work on the new outlook. Congratulations. I guess we're coming from a little bit of a different angle. With IRENA, we have up almost 170 countries as members, so obviously the diversity of situations is great. Oftentimes, the concentration of issues is around what's happening in Europe and a spillover effect from Europe. So we often hear that the current situation will accelerate the energy transition. I think we are already very, very slow, and we will not make it to 2030 in time. We have to halve emissions by 2030, so the transition is really not that fast to begin with. This is maybe going to accelerate a little bit, but not much. We still deal with energy transition as if it was a fuel replacement. It's not a fuel replacement. It's a systemic change that needs to happen. Until and unless we start dealing with energy transition in that way, we will not be moving at a, at a necessary speed and scale. Thank you. Jason, from your sense, the same sort of question. How are you thinking about the war affecting your sense of global energy, the future prospects for the transition? Yeah. First, just thanks for the invitation to be here, and congratulations on the outlook and really valuable piece of work for all of us who look at these numbers each and every day, complementing what IRENA does and what IEA and many others do. Thanks for that contribution. On the impact of Russia's invasion of Ukraine, yeah, I agree. I mean, we're seeing it now. You think about what countries like Germany were able to do. You talked about permitting challenges, so it is quite striking that in less than a year, if you really want to build energy infrastructure like LNG import terminals, people jump through hoops when energy security is at risk. We have a growing, not yet sufficient, but growing sense of urgency that we need to jump through hoops a lot faster to deal with the climate crisis. When you layer on top of that the urgency of dealing and coping with energy security risks, I think that is a powerful combination, energy security and decarbonization, that can now work together to move us faster toward a clean energy economy. I think Elisabeth and I sort of share a view that, I'm more convinced that is likely to be the case in developed economies, and I'm worried that may not necessarily be the case in developing and emerging economies. This is a global energy crisis. There's a lot of focus, obviously, on what's happening here in Europe, and the energy crisis that has impacted Europe, and it may look a little bit better now, in part because of warmer weather, in part related to climate change, but this is going to go on for several years. It's having ripple effects throughout the world as it pushes up LNG prices, pushes up coal prices. If you're in lower income countries, emerging market countries, Pakistan, Bangladesh, you're sort of struggling to afford any energy at all. What choices are made in those countries when energy access, modern minimum standards of energy are at risk, I... You know, coal can continue to play a big role there unless we really have, in addition to historic measures like the Inflation Reduction Act, and we'll come back to that, support from the developed world to drive faster decarbonization in emerging, and developing economies. Elisabeth, your views on that. I mean, a big chunk of your membership base in IRENA are from the Global South. I just wondered, inevitably, we're looking at this from one perspective, and there's a danger that we're looking at it from just one perspective. From the Global South, how are they viewing, I guess, the energy security concerns we've just been living through, and how they're likely to respond to that? Hey, you know, you're just, you just remind me of a situation when somebody said, "What energy security? Like, we have no energy." "What are you talking about?" Look, we really need to talk about the spectrum. You know, what are the countries that are affected by this? You know, still sometimes it boggles the mind that 700 million people have no energy. It's like, it's not a question of technologies. It's not a question of... I mean, it's a question of morality and finance, quite frankly, and a separate conversation, not for this place. I don't think that we can forget that. You know, when you look at the deployment of renewables and you were talking about the trends and trajectory that you see in your outlook, you know, we see similar, a little bit more ambitious than yours. In our scenario, we see about 90% of solutions in the power sector to be from renewables, which means also tripling of deployment by 2030. When you look what, where it's happening, it's really concentrated in the U.S., in China, and in Europe, you know, partially in India. You know, when you look at how much money goes into different places, Africa, in the last 10 years, had about 2% of all finance that went into renewables went to Africa. The continent that has enormous potential, they got 2% of global finance. That picture needs to change because the, the bulk of the membership that we have does not take advantage of the technology potential. One, access to finance, access to affordable finance, the infrastructure systems that go with that, the investment in policy, the investment in skill sets, all of that has to come at once. Really, we need to do a lot better as an international community, but also as a, as a strategist to think this is not, this is not optional. We need these countries to catch up and catch on with the renewables-based energy transition, because otherwise we will have another problem on our hands later on in the context of decarbonization. I just want to quickly highlight one thing that was interesting about the outlook, there were lots of things, was, the impact on emissions of Russia's invasion of Ukraine in the long run came more from slower GDP growth than it did from accelerating investment and expansion of clean energy. That kind of like you said, it was roughly an equal impact to COVID and the pandemic. Shutting down the economy, slower economic growth is not necessarily the optimal way to drive a faster transition. It just highlights, as you said, the scale of the challenge. The numbers are so big and moving the needle is hard, and we just have a lot of work to do. We're not on track. That came out pretty clearly in the outlook too. Obviously, heightened energy security in itself is not a good thing for the world. Telling us that we have to have more insurance. One element of that insurance is a good by-product, which is a shift into a sort of wanting to grow more domestically produced energy, which will help to encourage non-fossil fuels. Weaker economic growth, which is sort of this drag on economic growth, we can't embrace free markets in the way that we would like to do without that, is obviously a bad aspect of that. The other sort of, I think, defining thing for me, Jason. of the last year is just this recognition of just how fragile global energy is, where you just saw a small fraction of global energy supplies being threatened, leading to very big energy shortages, high price spikes, and the implications that has for global activity, social costs, fiscal policies, and so on. For me, that then sort of talked to me about sort of this need for this sort of orderly transition away from hydrocarbons. Really importantly, I don't think in any way, shape, or form should reduce our ambition for the speed of that transition, but that speed of the transition needing to be an orderly one, where government policy's working on demand for hydrocarbons as well as supply. I think there was a danger leading up to the war, there was more focus on the supply and that sort of risk leading to future periods of shortages and price volatility. I know you've thought about some of this stuff as well. Yeah your reflections on that. No, it's a really important point. You know, the scale and magnitude of what we're trying to do to completely turn something as large a share of the global economy as the energy system on its head in 27 short years is really staggering and unprecedented. I'd say two things about what you said. One is we need to do as much as we can to make it orderly. That includes things like how do you make sure that you're synchronizing as much as possible declines in investment in supply with the declines in demand. Because if you see declines in supply but demand doesn't fall, the consequence is going to be higher prices and more volatility, and maybe more, not less geopolitical influence for traditional petrostates that step in to fill the gap, right? There's no lack of hydrocarbons in the world, and if there's money to be made, the investment risks happening somewhere, and that could change the balance of even who the global producers are. That's something I've been writing about for a few years. I think the second aspect of what you said is, even if we do as much as possible to make it orderly, it's not going to be orderly. Like, this is just too big a kind of transition to undertake. It is inevitably going to be disorderly to some extent. We're going to get... We're not going to perfectly synchronize those declines in supply and investment. If you look at the most recent IEA World Energy Outlook, and they note that in their Net Zero scenario, or maybe it's the pledges scenario, the targets, you know, the need for flexibility on the grid in a world with much greater renewables that are intermittent goes up something like fourfold. You have an electricity system that increasingly, "Flexibility is the new watchword of energy security," was the quote from the WEO. We have challenges with critical mineral supply and supply chain risks. There's trade tensions that are emerging. One of the things that I was struck by, because you commented on the last energy crisis in the 1970s, and then we built a toolkit to deal with energy insecurity that came out of that crisis. Like, put a bunch of oil in salt caverns and create an international organization to cooperate of consumers, which are no longer the world's consumers today, to get together and figure out how to take steps if needed to deal with emergencies. That toolkit is just not fit for purpose anymore. The kind of risks we face to energy security moving forward in the coming decades, new risks that emerge from clean energy, and I wrote about some of those in Foreign Affairs a year ago with Meghan O'Sullivan. Just the risks that emerge from this multi-decade process of transition, which is not going to happen in fits and starts. You're going to see policy swings from one party to another. It's not going to be smooth and linear. We need a whole new toolkit for private companies, but also particularly policymakers, which is what I think about, to make sure that we are able to manage more volatility, new security risks to energy supply. I think that's a major effort that we need to think a lot about and put in place in the coming years. Okay. Can I just add something? Yeah. Yeah, please do. Yeah, please do. Because I agree with you. Oh, I thought you were going to say you fundamentally disagree with everything. No, I actually agree that we don't have a toolkit that we need for the current situation, and we're talking about supply and demand here. From our perspective at IRENA, we actually have been looking at the socioeconomic footprint as well. In recent years, we talked a lot about just transition, because as you said, you know, we're moving out of fossil fuels, and you need to make sure that you have the that you look after your communities and workers in the process. There is also this larger structural shift. You cannot I mean, the fact is that today, I think 80% of countries are net energy importers. In the end, everybody has some sort of renewable, so that they have. there can be something little that they do for themselves, and then your neighborhood becomes a lot more important. There is a whole host of changes that happen in terms of, you know, what value chance exists, what sort of skill sets you need for people who will be delivering what you need to deliver. There is all these changes that are happening at a different level. There is a little bit of, not a little bit, there's a massive disconnect between the trends in energy transition. We're basically maintaining two systems in parallel. It's going to be pretty tough few years, and expensive two years, and the policy makers need to be strategic and targeting some of these forward-looking areas that will stop us if we don't tackle them on time. Why don't we get into policy? Just before I do, just to say, for those of you online, I think, the options is to post your questions online. There's also a voting function online, so you can pick the questions you think would be best for us to pose to Elizabeth and Jason. If not already, please pose your questions or just vote for the ones you like best. In the room, we'll also come to the room, and then when we come to the room, we'll also just wait for to get a mic to you. Just before we go to the broader questions, I sort of wanted to probe, and I guess we've already just gone there, in terms of what does all this mean for government policies. Jason, I talked a little bit about the Inflation Reduction Act. Written and thought far more about the Inflation Reduction Act than I have. your sense about, the significance of the Inflation Reduction Act and how important it could be both for the U.S. and the world globally in terms of accelerating the energy transition. Yeah. I think it is a historic piece of legislation and perhaps the biggest piece of domestic legislation any country has taken to drive a faster transition. I think that's the place to start. It is focused obviously on accelerating the pace of clean energy deployment in the United States, and that's about 10% of emissions, but there's 90% elsewhere. I think it's also really important for the U.S. and European countries and others that historically have been the largest emitters to use all the tools of foreign policy and international economics that they have to help accelerate deployment of clean energy outside their own borders, lower the cost of capital, address some of those other barriers. We've written recently at the Center on Global Energy Policy with the World Economic Forum that currency exchange risk is one of those, so things like that. There's more to do, and even with the Inflation Reduction Act, there is more to do. I mean, I think that came across pretty clearly in the Energy Outlook. We are. It is notable that oil and coal, according to the Energy Outlook that you have, Spencer, are gradually declining, have peaked, depending on what scenario you're looking at. Natural gas may rise further, but at some point may decline. We're nowhere close to being on track for targets like one and a half or well below two degrees. We need much stronger technological innovation and also policy support to move that forward. The other thing, I was, you know, just in Europe, well, I'm back in Europe in Europe last week, to note is that the Inflation Reduction Act, for a variety of reasons, including the politics of what makes a bill like that possible, is industrial policy. Industrial policy is back in vogue, and countries want to accelerate clean energy deployment, and they also want to capture as much of the economic benefits of that transition as possible. I think there's a lot of good there if you create a virtuous cycle of competition that accelerates the pace at which people support clean energy. What we need to avoid is a vicious cycle of protectionism, because we need more, not less trade in clean energy components and technologies if we're going to accelerate the pace of transition. Obviously there are some tensions now between the U.S. and the Europeans about the Inflation Reduction Act. I think ways to smooth those and many more opportunities to cooperate now. You're thinking about a Carbon Border Adjustment Mechanism. There are ideas for Climate Club. When you take historic action like that on climate, there's a lot of opportunities to work together to kind of raise the standards for everyone. We just have to make sure it goes in that direction, not the protectionist direction, because I think that is actually not good for the transition, not to mention the global economy. Elisabeth, the other big issue here is we know the world needs to see this massive build-out of wind and solar in particular. We know from a pure cost position that wind and solar's in a fantastic space. We also know that to get the rapid build-out that we all want to see, there's all these other constraints that need to be overcome. Now just your perspective from IRENA's perspective, I guess, on sort of those constraints and the role that governments can play in. They're man-made, so it's a will here and we can get rid of them and we can, we should be able to loosen them. I just, is there grounds for hope? There's absolutely grounds for hope. I mean, the. We shouldn't be sitting here if there weren't, huh? But I think what happened in the last 20 years, we need to remember that the cost of solar and wind came down in the last 20 years through concerted efforts, you know, starting with, you know, the enabling policies and then, you know, the mass production and all of that. We don't have that time. We need to really concentrate on the areas where we can make this difference. In developing countries, in developed economies, I mean, I think we have the tools. We understand what needs to happen. It's about the strengthening infrastructure provides the flexibility solutions, as you mentioned. The interconnectors, the permitting. The permitting is a big obstacle and there's a lot of work around it. In developing countries, depending where you talk, but let's talk about countries that don't have anything right now. There are two things. The one key thing is the project pipeline and the support that needs to be provided to them both in terms of technical assistance and capacity building to actually create a bankable project pipeline. The second part is access to affordable finance. I mean, that's. Also for infrastructure projects, larger infrastructure projects, which obviously have to come through multilateral financing institutions. There is. I mean, the traditional tools that we have, the equity debts, guarantees, risk mitigation instruments, all these things, the mix of all, but we also need to innovate a little. We need to do things differently. Decentralized energy solutions require different small scale finance, and we haven't been really good in unleashing the potential in that space. We really need to, again, reinvent the way that we approach these things, and we can do it. It seems slightly, or not slightly, it seems deeply frustrating that there's this pool of capital in the West desperately seeking to invest into sustainable projects. Somebody like Elisabeth comes along and says, "One of the major problems stopping the build-out of renewable energy is the cost of finance." It just seems a sort of. This must be possible to overcome. Jason, you've done some work in terms of. Often when I was in India last year and I said to renewable developers, "What's one of the biggest constraints?" It was the exchange rate risk that you face when you're investing in long-term in renewable projects in somewhere like India, and you're a dollar-based. Right ... Western investor. You've done some work thinking about how to mitigate some of that foreign exchange risk. Yeah. It's just one of many risks that you sort of look at the cost of renewables, and they compete very well sometimes with policy support, but many times now without. You have to think about obviously system cost overall and what happens because of the intermittency. When you look at where energy demand growth will be strongest and where most of the capital in the long run needs to go, you're talking about emerging and developing economies, and there's a host of additional risks there, political risks and others. Currency exchange is one of those. My colleagues at the Center on Global Energy Policy worked with the World Bank and the WEF on... I won't go into all the details, but it's basically a coverage facility. The idea was can you use the value of carbon credits and other forms of blended finance, like from multilateral development institutions, maybe sovereign capital or philanthropic capital, to build a facility to mitigate currency, exchange risk. We're trying over the course of this year to do pilot projects with a project developer, with a government, with a multilateral organization to sort of demonstrate that there's something there, see if it works. We just need a lot more trial and error like that to find ways to address some of those risks. I do think the broader thing to step back and say, building on what Elisabeth said, is it's easy to see the glass is half empty when you look at the gap between those lines. The other way to look at it is progress is possible, and it is happening. If you were to go back a decade plus, and you were to see projections for everything going up, oil, gas, and coal. Then it was, well, coal's plateauing, but oil and gas are going up. Now the BP outlook has oil demand in long-term decline. Gradually, not anywhere close to the pace of 1.5 degrees, but things are changing. That's partly, as Elizabeth said, because of the dramatic declines in costs for storage and renewables. We're going to hopefully see that with advanced nuclear, and hydrogen, and carbon capture, and all the other tools in the toolkit that we need. We just have to make it all go so much faster if you want to have climate targets like that. Yeah, if I can add another example because I think what's happening, it's also allowing people to reimagine what's possible. Just to give another example, I worked on the geopolitics of hydrogen report last year. Honestly, when we started with it, Jason was working with us when we did the first geopolitics report at IRENA. This one is a kind of follow-up. In the first report, we didn't even mention hydrogen. It was like a footnote maybe in two places and six words in the report. Suddenly, we're having this entire analysis working around the geopolitics of hydrogen. Since all of this started, you look at what's happening in Southern African region. Namibia became one of the countries that was a target country for bilateral cooperation for European green hydrogen demand. They're now reimagining what is possible for their economy. They're looking at South Africa as exporter, because obviously hydrogen doesn't grow on trees. You need renewable energy behind it, you know, to produce it. They're now looking at producing green steel. They're actually looking at reimagining, creating some industry value for themselves. You know, producing batteries in neighboring countries. They have critical materials. There is a lot going on. I think as Jason mentioned, as we advance, you know, there is this avalanche of ideas that people are taking advantage of the change, and we're going to see a lot more of that. Yeah. Let me just jump on the optimism bandwagon. I got to go. I mean, it is very easy to see the negative, but, I think, based on the numbers that we've seen, we haven't got final numbers, I think we could be as much as 10 million electric cars were sold last year. Renewable capacity, installed capacity could be as much as 360 GW. Both of those way faster than even our Net Zero scenario was thinking about a couple of years ago. The pipeline for low carbon hydrogen up to about something like 26 million tons per annum by 2030 in terms of the pipeline now. Biomethane up 20% or 30% over the last couple of years. Lots of really positive things happening. There is positive things here. Okay. We're going to go to questions. We're going to take the first one from online because you've been posting your questions and voting, and then I'll come to the audience. I will try and catch my eye in a moment. In terms of the first question from online, a really topical one, which is in terms of the security supply of minerals. There's a real danger that we substitute one form of energy security risk for another form of energy security risk. How big a sort of an issue is this and how you're thinking about it? Perhaps Elisabeth and then Jason. Uh, uh- If you want to, just catch my eye as well if you'd like to ask an audience question. Just to say up front, I don't think they're interchangeable because I think it's a very different nature of concerns. You know, from IRENA's perspective, we're looking at, you know, three different avenues. One is that the short-term supply, short to medium-term supply, which absolutely needs to be managed. The second part is innovation, because you have to watch what's happening in innovation, because in the long term, the demand for critical materials will change. The third one is the circular economy. You really have to have a holistic approach to these things and think about the critical materials in that sense. I'm just now looking at supply chain of renewables batteries. To see, I think I would add manufacturing to it as well, because the manufacturing, you know, the volumes that we require will require a lot more manufacturing facilities and labor and associated things with it. We're looking at different aspects of it and in the short term to 2030, it's largely manageable. In the long term, it needs a strategic management. Yeah, I would just echo that. I mean, there is a real risk there. You know, a 70%, 80%, 90% of many critical minerals refined and processed in China, for example, and the role of certain countries, much greater concentration than 10% of global oil supplies that come from, you know, the U.S., Saudi, Russia. It is a different nature of the risk, right? It is an input to a finished product. It's not the daily flow of fuel itself. If you were to have a disruption in battery supply chains, it would affect the ability to buy a new electric car. It wouldn't affect mobility every day the way a disruption in oil supply would. Still a real risk. I don't think we fully wrapped. I mean, you have the numbers here, so it's very helpful. I don't think collectively we fully wrapped our head around how big the numbers are to get on track for targets like Net Zero by 2050, and really how much minerals and metals we need. There's a bunch of work that has to be done there for how you develop that, how you do mining in a just and equitable way, how you think about the permitting challenges and all the rest. There's a lot of work that I suspect will be done. This is not a static environment. I see what my colleagues at Columbia in the electrochemistry and in electrochemical engineering department are doing. The evolution in battery chemistry, the potential for recycling, there's a lot that will be done there that will change the outlook for what we think is needed in terms of minerals and metals. The last thing I would say is we're going to need, if you worry about those, concentration of supply risks in certain countries, we need more, not less cooperation with countries in a sphere of allies, however, friend shoring, whatever you want to call it. Free trade is not so much in vogue in at least in both sides of the aisle in the US and some other places. We're going to need more cooperative agreements between countries that want to work together to develop these, metals and minerals. I worry that there's a tendency to think you can do all of this domestically as the response to energy security, and I just don't think that's going to be possible. We're going to need to work together, and certain, you know, the certain places will have more of the resource than others. Okay, we're going to take a couple of questions for the room. This is really bad because I know we're not going to get through all the questions. There's a question right at the front here, and then the gentleman behind you. Second, we do two, and then I'll go back. I promise to go back to the online. Thank you. Thank you, Spence. John Cooper, FuelsEurope. It's the trade association for fuels manufacturers based in Brussels. I want to come back to that question of the West wanting to invest in other regions of the world. The good news is we've now got two, you know, major regions, Europe and the U.S., with very, very strong climate policies. What I'm hearing from both sets of political leaders is they want every penny spent in their continent, and we hear that repeatedly. How do we get past that? As business groups, there are many international companies, including like BP, that are very capable of doing projects internationally, but the policy sets are increasingly set and kind of frozen within those regions. How do we help governments get past that mindset? Elisabeth? Yeah. From IRENA's side, we made it very clear that international cooperation and global approach to energy transition is absolutely critical. I'm not really sure 100% that there's certainly a level of inward-looking at the moment. Like, when you look at, you know, from European perspective, you know, they're definitely looking into their regions, you know, to diversify their energy supply, to look at hydrogen production, and it's certainly, you know, it's still there. In the long term, I think it's very clear to everybody we cannot do these things in isolation. There is new codependencies emerging, and this is becoming very clear. I think that we should not confuse the short-term reaction in the crisis to what is necessary in the medium to long term. I think pointing out this knee-jerk reaction to crisis is always helpful so that we don't shape long-term policy making or investment infrastructure, if a large-scale investment, based on short-term priorities. Let me go to the gentleman that's right behind John. Thank you. Jonathan Stern from the Oxford Institute for Energy Studies. Spencer, you mentioned the big pool of capital, and indeed there's a lot of capital. What we seem to be missing is the fact that, you know, the criticism of big energy companies for not investing in renewables. Isn't it really the case that the rate of return that can be expected on sustainable energy is just not high enough to attract investors? I mean, traditionally, it was said that big oil and gas companies needed 10%, 10%-15% post-tax real. From sustainable energy, you've got, what, 5%-7%? First of all, is this a question of adjusting investor expectations, or is it possible to raise the rates of return from many of these sustainable projects? You want to speak to that? No, no. Well, you go ahead first. I think it's some combination of both. There's a lot of people in this room putting capital to work every day, so I'd want to hear what they have to say, including, you know, Spencer sitting at a company like BP. There are different... We see people that are making the economics work and a lot of capital, not nearly enough, going into clean energy. It's a different sort of investor profile in terms of the predictability, the boom and bust nature, and the kind of steady utility rate returns that some people might expect in certain industries. Then I do think over time, a combination of technological improvement and policy support can make sure that those returns are attractive. That's why I've never believed that this sort of just happens by itself. Clean energy falls in cost, and suddenly, you know, everyone says we're on a clean energy trajectory because clean energy is the cheapest way to power the planet. That is becoming much cheaper, but you're still going to need a policy environment that kind of puts the thumb on the scale of zero carbon energy because that's kind of the role of government is to deal with an externality like that and make sure everyone's accounting for it when they're making economic decisions. I think, I guess, My only response would be, I'm not sure you could lump all sustainable energy into one sort of single bowl. I think there's things like doing onshore solar in Europe is a very different thing to trying to develop very large projects which are trying to produce blue and green hydrogen with the possibility of exporting some of that in the form of ammonia or something to other parts of the world where you'll need a whole set of integration skills, where I think the potential there for companies like us to play a role which are harder to replicate for others. Suddenly they're going to be a different perspective. I think, so I wouldn't be nervous about lumping it all together into one single component. Let me go on to back to those on screen. This is a really important point, and then Either Elizabeth or Jason, in terms of the role that nuclear energy will play, has as a result of what we've lived through, we've certainly heard a lot more discussion about the role that nuclear can play. What your perspective on nuclear, particularly, I guess, post the war in terms of how that may have affected people's perceptions? Yeah. Re-removing any ideology from this, just from a cost perspective and timeline perspective, I mean, if we want to halve emissions by 2030, I mean, the role of nuclear is largely limited to what exists today. From cost competitiveness in the long term, I mean, there is no comparison between the renewables and nuclear. At the same time, you know, different countries make different policies what suits them.... I think if you look on unit of energy basis, it's right to say there's no comparison between nuclear and renewables. If you looked at a system-wide analysis, every analysis I'm aware of shows that to decarbonize the entire electricity system, bear in mind we need to double or triple how much electricity we're consuming because we're electrifying a lot of things, it is cheaper to have a meaningful amount. People disagree on whether it's 10%, 20%, 30%, 40%. Like, we don't know. It's not 0% of 0 carbon firm baseload power on the grid. We're going to have to have. Nuclear is going to play a role, existing nuclear, and I'm also optimistic about the technological improvements that we're seeing with advanced nuclear technologies that complementing it as a complement to a decarbonized electricity system that is primarily renewable, but not entirely renewable, is going to allow us to get where we need to go in the cheapest way possible. I had a question, the lady over here, if we may. Hello, good afternoon, and thanks for the presentation. It's Amy Wong from Credit Suisse. I had a question on decentralized generation, which you started talking about in that session. To some degree, we understand the limitations of transmission has on renewable power generation. Going to decentralized generation, do you think that that technology, you know, what's the readiness of that technology, and how scalable can that be on a, on a global basis? Which regions would you see kind of winning that race? Elizabeth, it's got to be you. Sure. It's got to be the person. I think we should ask Jason. All right. No, I'm happy to speak to that. Just to bring. We often talk about decarbonization and the climate priority, but there's also development priority. We have 2030, Agenda 2030 for Sustainable Development, and it's very clear that without decentralized energy, we will not be able to achieve what we set to achieve. What we have observed in recent years is that the trends are there is an increasing, first of all, from a technology perspective, the range of solutions is really increasing because the market is huge. We started with India and through the Sub-Saharan Africa. So we see the growing range of either off-grid or mini grid solutions, because the size of market is big. We also see the growth in finance that goes that way. What happened during COVID, there was a little bit of a hiccup and a slowdown in the sense of, I mean, part of it is the business models through which you actually, you know, recuperating your revenue through it and so that was a little bit of a learning curve. We see that this is going to be a huge part of a solution in the medium to long term, and definitely for this, leapfrogging, part of leapfrogging. It's, you know, so just one point on this, it's with decentralized solutions, it is not about energy as a commodity, it's energy as a service. What is it for? It's, it's super efficient. It goes to where it needs to go. It's for cold chains, it's for, you know, water access, it's for irrigation. It's in the areas where it really is required. Thank you. I'm going to have to stop, otherwise I'm going to run out of time, because we want to find out what happened to the survey results. What's spooky is when you sit here and there are various questions coming up, it reminds me when I used to do my exams and you sort of turn over your exam paper and you think, "Oh my goodness." The good thing is I can just say we haven't got time now, so we can't answer any of those really difficult questions. So, can we, oh, people who monitor and flash things up go to the survey questions? The first question to remind us was, what impact was the war going to have in terms of increasing the pace of the energy transition? I've now put my glasses on. There's a second one. Oh, that's the third question, guys. That's the one. Okay. Oh, you're now in the minority. 80% saying it's going to accelerate the energy transition in one form or another, either by a lot or by a bit. Very little in terms of slowing it. I... Obviously, I'm not that surprised by that in the sense of that's where we are. I think if we took a straw poll of people a few months ago, I think they would have seen this as a relatively bad news thing, and it clearly is bad news, but there are some aspects here in terms of accelerating the energy transition. Thank you. Right. The second question, which is a very complicated one. Okay, we've got a split vote here in terms of the single biggest factor affecting things. Wow, okay. We can read the same things here. All of the above. It is all of the above, I think. Which is what Julia wanted all along. Yeah. If we'd given that, Julia, everybody would pick that one. It would've been interesting. It just sort of... I guess that just... That's your policy job, Elizabeth, for the next few years. Absolutely. Let's get rid of those Mm-hmm constraints. You see that the infrastructure is winning. Yes. Mm-hmm. Yes. I am intrigued, we haven't got time, but it's sort of what is best practice on permitting? Because at one level we sit here and we want to make permitting as quickly as possible. The point of the permitting is allowing societies to have a choice and their rights as well and involve environmental things. We can't just doing away with it- Balance. Got it, yeah Got it, yeah ... is not, is obviously not the right thing. The third question on the impact of the Inflation Reduction Act. Okay, there is a clear winner here, which is Accelerated in the U.S. but with little positive spillover effects for the rest of the world, with a pretty much evenly split between whether it's net good for the rest of the world with 20% odd yes, and 20% odd no. Okay. That's fascinating as well. All right. There's one thing about asking people to spend an hour and a half either in London or around the world watching the webcast, the very least we can do is make sure we finish on time. Let me wrap this up. Apologies to people in the room who I didn't get to ask, you ask your questions. I apologize. We're never going to have enough time in an hour and a half. Thank you, first of all to Elisabeth and Jason for coming across and making the event what it was. Thank you. Thank you to everybody for sparing the time both here in the room and online for the launch. Most importantly, please, if you are interested, please go to bp.com. There are hard books in different parts, but the best way of reading the Energy Outlook is online. We spent a long time to make the digital format as engaging as possible. Please do let us know your views and your comments. What bits need to improve on? What's your views and thoughts about what's going on in the energy system today? With that, let me stop. Thank you again, thank you very much everyone. Thank you.