Industry Market Trends
BP Unveils New Report Detailing the State of the World's Energy
August 1, 2013
The BP Statistical Review of World Energy 2013 was released recently, and provides an excellent look at where the various sectors are today.
It's the 62nd edition of this report, and as BP Group Chief Executive Bob Dudley says in his introduction, it goes through pretty much "country-by-country, fuel-by-fuel." If you're looking for a comprehensive portrait of world energy production and consumption trends, this is the ticket. All information in this article has been sourced from the report.The Bullet Points
We'll give the 10 bullet-point excerpts from the executive summary before taking a closer look at some of the major trends.
2012 saw a slowdown in the growth of energy consumption globally, due to the economic slowdown and high prices spurring efficient energy usage.
World primary energy consumption grew by 1.8 percent in 2012, well below the 10-year average of 2.6 percent.
Brazil, China, the EU, India, Japan, Russia, and the U.S. all saw below-average growth in energy consumption.
The most noticeable supply phenomenon was the American shale revolution -- "In 2012, the U.S. recorded the largest oil and natural gas production increases in the world, and saw the largest gain in oil production in its history."
Disruptions to oil supply in Africa and parts of the Middle East were offset by growth among OPEC producers, but oil prices reached another record high.
Coal remained the fastest-growing fossil fuel, with China consuming half of the world's coal for the first time.
Natural gas was the only fossil fuel to see consumption growth accelerate in 2012.
Renewables in power generation grew by 15 percent.
Global nuclear power output had the largest decline ever, with Japanese output falling by nearly 90 percent and fossil fuel imports rising to compensate.
Oil is still the world's leading fuel at 33.1 percent of global energy consumption, but lost market share for the 13th consecutive year, "and its current market share is the lowest in our data set, which begins in 1965."
Now, let's take a more in-depth look at some of those numbers, starting with a more detailed look at 2012.
2012: China, India and Everybody Else.
All net growth took place in emerging economies, "with China and India alone accounting for nearly 90 percent of the net increase in global energy consumption." OECD consumption declined -- "for the fourth time in the past five years, led by a large decline in the U.S."
Still, in 2012,"consumption and production reached record levels for all fuels except nuclear power and biofuels." Growth in global CO2 emissions as a result of energy use was slower in 2012 than 2011.
The international crude oil benchmark price increased to record levels, peaking in March, then dipping due to rising output in the U.S. as well as Libya and other OPEC producers. The U.S. had the largest oil production growth in the world in 2012, but American infrastructure bottlenecks kept prices higher than they should have been.
Thanks to fracking, "natural gas prices rose in Europe and Asia, but fell in North America, where rising U.S. natural gas output pushed gas prices to record discounts."
Coal prices fell across the board.
Around the world natural gas production grew by 1.9 percent, with the US leading the way, ringing up a 4.7 volumetric increase, the world's largest, to stay ahead of Norway (12.6 percent), Qatar (7.8 percent), and Saudi Arabia (11.1 percent) as the world's largest producer. Russia suffered a 2.7 percent decline in production, the world's steepest.
Natural gas consumption in 2012 grew at an above average clip in South and Central America, Africa, and North America. In Asia, predictably, China (9.9 percent) and Japan (10.3 percent) led the way. The EU saw a decline of 2.3 percent and the former Soviet Union 2.6 percent, with the OECD's natural gas consumption growing more rapidly than non-OECD consumption for the first time since 2000.
World nuclear power generation declined by 6.9 percent in 2012, which the BP report termed "the largest decline on record for a second consecutive year."
Of course, the major culprit was Japan: "Japanese nuclear output fell by 89 percent accounting for 82 percent of the global decline." Overall, nuclear's share of global primary energy sunk to its lowest level in 1984, and there aren't any really encouraging prospects on the horizon.
The picture brightens considerably for renewable energy, given the fact that it's still only a fraction of global energy consumption today, and will continue to be so for the foreseeable future.
The BP report defines "renewables" as "hydroelectricity, wind, and wave power; solar and geothermal energy; and combustible renewables and renewable waste (landfill gas, waste incineration, solid biomass, and liquid biofuels)," and collects information about them from "primary national sources" and such secondary sources as Eurostat, the U.S. Energy Information Administration, and the International Energy Agency.
So while renewable electricity generation -- excluding hydro -- is no more than 5 percent of global electricity generation, it's becoming noticeable, "contributing 31 percent of the growth in global power generation in 2012," the report said.
It's even becoming a fairly significant contributor in certain places around the globe: "Wind power generation has a significant share in total electricity generation in Denmark (34 percent), Portugal (21 percent), Spain (17 percent), Ireland (16 percent), and Germany (7 percent); geothermal sources account for more than a quarter of total electricity generated in Iceland, and more than a fifth in El Salvador and Kenya."
Hydroelectric output grew by 4.3 percent globally, higher than average, with China accounting for all of the net increase and contributing the largest national annual increment in the BP data set. Overall, the report finds, "hydroelectric output reached 6.7 percent of global energy consumption, the highest share on record."
So while renewable isn't a major factor in the world energy picture, it can be a notable energy source in certain conditions.
Global proved oil reserves by New Year's Day 2013 stood at 1668.9 billion barrels, with 2012's biggest increase coming from Iraq officially adding 6.9 billion barrels to their reserves. OPEC controls 72.6 percent of the world's oil reserves, which have increased by 26 percent, "or nearly 350 billion barrels, over the past decade."
And the world's R/P ratio (reserves to production) has risen from 48.3 years a decade ago to 52.9 years by the end of 2012. This means the current total proved global reserves are sufficient to meet 52.9 years of global production.