|
|
|
|
|
|
In Turbulent Year Developing World Leapfrogs Sluggish OECD in Demand
for Energy
In a climate of unprecedented
turbulence, global energy markets followed the same extreme pattern as the
world economy in general during 2008.
Prices first rose to record highs as
economic growth boomed in the first half of the year. Then they collapsed as
the global economy abruptly reversed and plunged into recession in the wake
of the financial crisis.
But the year was also remarkable for another reason - less dramatic but,
arguably, just as profound in its implications for the long term. For the first
time ever, according to the 2009 BP Statistical Review of World Energy, the
developing world led by China leapfrogged OECD nations in the consumption of
primary energy.
At the launch of the Review in London today, BP chief executive Tony Hayward
said: "The centre of gravity of the global energy markets has tilted
sharply and irreversibly towards the emerging nations of the world,
especially China.
"This is not a temporary phenomenon but one that I believe will only
increase still more over time. It will continue to affect prices and bring
with it new challenges over economic growth, energy security and climate
change.
"This shift will bring volatility in the short term," Hayward
warned. "But I have no doubt that the diversity and flexibility of modern
energy markets will continue to ensure that energy supplies continue to reach
consumers efficiently and without interruption."
BP chief economist Christof Ruehl said that in spite of the dramatic
gyrations in the world economy and energy prices, the Review data showed how
well those markets had served energy security during the year. "Allowing
markets to continue to function freely and without interference remains key
to managing the inevitable ups and downs in prices as we go forward," he
said.
The Review reports remaining proved oil reserves of 1,258 billion barrels,
excluding Canadian oil sands - enough for 42 years at 2008 production rates. On
the same basis, reserves of gas are sufficient for 60 years and coal for 122
years.
Reflecting the extremes of the world economy across 2008 - strong growth
followed by sharp decline - the Review shows that overall primary energy
consumption nudged up just 1.4 per cent, the smallest rise since 2001. China
alone accounted for almost three quarters of the rise, with most of the
balance coming from the wider Asia-Pacific region.
In the developed world, energy consumption fell by 1.3 per cent, with demand
in the USA seeing the steepest single year decline since 1982, a drop of 2.8
per cent.
Oil: In 2008 the
average price of dated Brent crude oil rose to $97.26 a barrel - 34 per cent
up on the previous year and the seventh consecutive annual rise. However, the
annual average masked huge variations across 2008. The price began the year
at just below $100 a barrel, peaked at $144 in early July and fell
dramatically to less than $40 at year-end - the fall a consequence of higher
OPEC production and rapid slow-downs in consumption in the second half.
Over the year, global oil consumption fell by 0.6 per cent, or 420,000
barrels a day; the first decline since 1993 and the largest drop for 27
years. This included a steep fall in demand of 1.5 million barrels a day from
the developed OECD countries - their third consecutive year of decline - and
slower growth in demand (up just 1.1 million barrels a day) from outside the
OECD.
Despite overall lower demand, average oil production rose 0.4 per cent, or
380,000 barrels a day, driven largely by OPEC production increases. Despite
cuts late in the year, average OPEC oil output actually rose by almost 1
million barrels a day, or 2.7 per cent. This all came from the Middle East
with daily production from Saudi Arabia up 400,000 barrels and from Iraq up
280,000 barrels.
Production outside OPEC recorded the steepest decline since 1992, falling by
1.4 per cent, or 601,000 barrels a day, with output from the OECD countries
falling 4 per cent, or 750,000 barrels a day, driven by declines in North
America and Europe. The single largest decline came from Mexico, where production
fell 310,000 barrels a day. Russian production fell for the first time since
1998, by 90,000 barrels a day. UK oil production fell 94,000 barrels a day,
or 6.3 per cent, to the lowest level for 30 years.
Gas: Gas
consumption grew by 2.5 per cent, below the 10-year average. Consumption in
the USA grew by 0.6 per cent as spot prices remained well below oil prices.
Elsewhere, only the Middle East saw above-average growth, driven by strong
domestic demand. Oil-indexed gas prices in OECD Europe and Asia-Pacific rose
more rapidly which, coupled with the recessionary impact, meant that
consumption growth was below average.
The largest incremental growth in world gas demand was from China, where
consumption rose 15.8 per cent. The UK's gas consumption grew by 3 per cent,
with gas now supplying 39.9 per cent of the UK's total primary energy - well
above the global average of 24.1 per cent.
Globally, gas production rose 3.8 per cent, above the 10-year trend of 3 per
cent. This was driven strongly by the USA which recorded its highest ever
annual increase in gas production as strong activity in the development of
unconventional gas resources raised output by 7.5 per cent - 10 times the
10-year average growth rate. The second highest increment was from Qatar as
pipeline exports to UAE increased. Production rose in Europe overall as
increases in Denmark, Netherlands and Norway more than offset falls in the UK
and Germany.
Coal: For the sixth
consecutive year coal remained the fastest growing fuel globally, even though
its 3.1 per cent growth in consumption was below the 10-year trend. China,
which accounts for fully 43 per cent of global coal demand, accounted for 85
per cent of this growth, with an increase of 6.8 per cent. Outside China
however, global demand growth was weak, climbing only 0.6 per cent,
reflecting the fact that coal prices in liberalised markets increased more
than for any other fossil fuel. Coal use in the UK fell 7.6 per cent to the
lowest level for a decade, in part due to fuel switching driven by CO2 prices
in the EU emission trading scheme.
Other fuels:
Nuclear output fell for the second consecutive year, by 0.7 per cent, led by
a 10 per cent decline in Japanese output as its largest power station
remained shut after a 2007 earthquake. Hydroelectric output continued its
recent strong performance with growth of 2.8 per cent, above the 10 year
average for the fourth time in the past five years. However, again, all of
the global increase could be accounted for by growth in China - climbing by
20.3 per cent, nearly twice the country's 10-year average rate. Hydroelectric
generation outside China fell by 0.4 per cent.
Renewable energy again grew strongly albeit from a low base, with wind and
solar generating-capacity growing 29.9 per cent and 69 per cent respectively,
both above their 10-year average rate. The USA's wind power generating
capacity grew by 49.5 per cent, overtaking Germany to have the largest
installed wind generating capacity in the world. UK wind generating capacity
grew 36.3 per cent to 3.3 GW; still, however, accounting for less than 3 per
cent of global installed capacity.
Note to editors:
* The BP Statistical Review of World Energy is available online at
www.bp.com/statisticalreview. The website contains all the tables and charts
found in the printed edition plus some additional data, an energy charting
tool and a conversion calculator.
Further information and media request for
hard copies:
BP press office: tel: +44 (0)20 7496 4076
|
|