The Strategist

BP: Oil is still the most popular energy source

06/14/2017 - 14:38

The world energy market is undergoing changes, said CEO of BP Robert Dudley during presentation of BP’s 66th edition of a statistical review of the world energy sector.

"World energy markets are undergoing change. Long-term trends that can be traced in the presented data indicate changes in the structure of supply and demand as the world solves the problem of supply the necessary energy resources while reducing carbon dioxide emissions", he said, presenting the review.

The growth rate of world primary energy consumption has been minimal for the third consecutive year. In 2016, growth was about 1%, while the average for the decade is almost twice as high - 1.8%, according to the annual statistical survey of world energy company BP. Oil remains the most demanded energy resource, the share of coal in the world energy balance in the past year has fallen to a minimum since 2004, and renewables grew at a record pace.

About a third of global consumption falls on oil, which remains the most popular energy source in the world, according to BP. Due to low prices, demand for it increased by 1.6% last year, while production increased by only 0.5%. The largest importers of crude oil are still the United States and China (7.9 million and 7.7 million barrels per day, respectively).

Growth in natural gas consumption slowed to 1.5% with an average of 10% of 2.3%, the consumption grew the highest in the EU (7.1%). Gas production rose by only 0.3%. Drop in production in the US is offset by increased activity in Iran and Australia, where new liquefied natural gas (LNG) production facilities were commissioned. BP expects an increase in LNG production by 30% by 2020.

The coal industry demonstrated the worst indicators: world production fell by 6.1%, consumption - by 1.7%. At the same time, the share of coal in the world energy balance dropped to 28.1% - the lowest level since 2004. In the United States and China, simultaneous declines in production (-19% and -7.9%, respectively) and consumption (-8.8% and -1.6%) were noted, while the United Kingdom reduced consumption of this type of fuel 52.5%.

Consumption of renewable energy grew at the fastest rates. Volume of electricity generated by wind, solar, geothermal energy, biomass and waste worldwide increased by 14.1%, slightly below the average ten-year growth rate (15.7%), but recorded a record increase in absolute terms (52, 9 million tons of oil equivalent). More than half of the increase fell on the wind power. The fastest rates of renewable energy were noted in the Asia-Pacific region (60% of world growth). However, the share of renewable energy in the world electricity production increased insignificantly in 2016, from 6.7% to 7.5%. Consumption of nuclear energy climbed up by 1.3% (the leader of growth was China, adding 24.5%), hydropower grew by 2.8%.

"We welcome these changes, but it is too early to judge whether they are structural in nature. We should continue to closely monitor the situation and work on reducing carbon dioxide emissions", Dudley said.