BP Statistical Review "shows strength of global energy system"News // June 18, 2014
BP says its Statistical Review of World Energy 2014 reveals how the world of energy echoed broader global themes in 2013. Emerging differences in global economic performance, geopolitical uncertainty and ongoing debates about the proper roles of government and markets are all reflected in its data.
Global energy demand accelerated in 2013 but, reflecting the weakness of the global economy, growth of 2.3 per cent remained slightly below the historical average. Within this global picture, however, shifts in energy consumption mirrored those in the world’s economic patterns.
Energy consumption in the emerging economies grew below their long-term average rate, rising by 3.1 per cent, driven by slower growth in China. However, consumption in the mature economies of the OECD grew by a higher-than-average rate of 1.2 per cent - entirely as a result of strong growth in the US.
As a result the gap between growth in the OECD and non-OECD narrowed to levels not seen since 2000.
Nonetheless, the emerging economies continue to dominate the growth in global energy demand, accounting for 80 per cent of growth last year and nearly 100% of growth over the past decade.
The Review – the publication’s 63rd annual edition – also illustrates how geopolitical events in a number of countries continued to impact oil production in 2013, with Libya suffering the largest single decline in the face of renewed civil unrest.
Those disruptions, however, were offset by a big increase in oil production in the US – driven by the massive investment in production from shale and other ‘tight’ formations. As a net result, average oil prices remained unusually stable – albeit at levels exceeding US$100 per barrel for a third consecutive year.
Speaking at the launch of the report in Moscow, BP Group Chief Executive Bob Dudley said: “The review again demonstrates the strength of the flexible global energy system in adapting to a changing world. The major disruptions to production seen throughout 2013 were balanced by continued rises in production elsewhere. This underlines the importance of continuing to secure these new supplies through continued access to new resources, policies to encourage markets and investment, and the application of new technologies worldwide.”
The developments also highlighted the critical importance of both policy and market forces in delivering new supplies. As BP Chief Economist Christof Rühl also noted: “The huge investments seen in the US have been encouraged and enabled by a favourable policy regime. And this has resulted in the US delivering the world’s largest increase in oil production last year. Indeed, the US increase in 2013 – up by 1.1 million barrels a day - was one of the biggest annual oil production increases the world has ever seen.”
Elsewhere, the impact of policy on energy was also seen in continued robust growth in renewable energy – albeit from a low base. Renewables now account for more than 5 per cent of global power output and, including biofuels, for nearly 3% of primary energy consumption.
However, the challenge of sustaining expensive subsidy regimes has become visible where penetration rates are highest, namely in the below-average growth of Europe’s leading renewable producers, who are grappling with weak economic growth and strained budgets.