Power demand in the region will grow by 79%, while gas will maintain a dominant position at 72% of the power generation supply mix. Because of significant demand growth in energy-intensive sectors – primarily transportation, power generation and industry – by 2035, the Middle East will pass the former Soviet Union (FSU) as the region with the highest energy consumption per unit GDP (“energy intensity,” as BP calls it). Socio-economic factors will also play a key role in the region’s energy demand growth: BP sees regional population expanding by 39% by 2035, with GDP growing by 89% in the same period.
Subsidized fuel prices and some crude burning for power generation have made the Middle East the most oil-intensive region in the world today; by 2035, however, these factors will make the Middle East the world’s most gas-intensive region as well. Comparison of expected growth in gas demand in key markets suggests that BP envisions a gradual tapering of gas subsidies in the Middle East, where demand is expected to grow at a strong rate, but one considerably lower than that predicted in other developing economies. BP expects very little relief from alternative fuel sources in the region over the medium term: by 2035, it expects that fossil fuels will still account for 98% of regional fuel demand. (CONTINUED - 769 WORDS)