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June 2010

Vol. 15, No. 24 Week of June 13, 2010

BP Stats: 1st decline since ’82 in 2009

Company’s Statistical Review found energy consumption lower in ’09 than in ’08, reflecting 1st world economy contraction since WWII

Kristen Nelson

Petroleum News

The global recession drove energy consumption lower in 2009 than in 2008, BP said in its 2010 Statistical Review of World Energy, released June 9. That is “the first such decline since 1982, as the world economy contracted for the first time since the Second World War,” BP said in a summary of the review.

“Energy consumption reflected the pattern of recession and recovery,” said BP chief economist Christof Ruehl.

Worldwide, primary energy consumption fell by 1.1 percent last year and consumption in the Organization for Economic Cooperation and Development, the world’s industrialized countries, fell 5 percent, more than their decline in gross domestic production, Ruehl said. OECD countries consumed less energy in 2009 than 10 years ago.

In non-OECD countries energy consumption increased by 2.7 percent last year, “more than their increase in GDP and driven by growth in China. The shift toward the developing world continues,” Ruehl said.

Impact of the Gulf

“Last year’s decline in global energy consumption was rare; and where we have data so far in 2010 energy consumption is again on the rise,” said Iain Conn, BP group managing director and chief executive of Refining and Marketing.

“The world needs to invest today to be able to deliver the energy supplies that will be needed in the future,” Conn said.

“Events in the Gulf of Mexico, however, demonstrate that access to some energy resources will almost certainly require enhanced measures to ensure safe operations and capabilities to safeguard the environment,” he said, referring to the explosion on the Deepwater Horizon drilling rig April 20. The Transocean rig was drilling for BP when it exploded and burned, killing 11 workers, and eventually sank. BP was still struggling June 9 to control oil from the well.

BP Group Chief Executive Tony Hayward talked about the Deepwater Horizon explosion in an introduction to the statistics.

“We are throwing everything we have at mitigating this disaster,” he said. “Our thoughts are with those who have lost loved ones, and those whose livelihoods have been disrupted. We are determined to set right what has gone wrong and to learn from the tragedy. Eventually, we will succeed, and eventually, this disaster will lead to a safer and better energy world,” Hayward said.

Prices drop

Prices for all forms of traded energy fell for 2009 as a whole, BP said, “with the sharpest declines seen for traded natural gas and coal in North America and Western Europe.”

BP said that while global oil consumption declined by 1.2 million barrels per day, the largest decline since 1982, global oil production dropped even more rapidly than consumption, falling by 2 million bpd, again the largest drop since 1982.

OPEC production cuts begun in 2008 continued through 2009, BP said, and as a result OPEC production declined 2.5 million bpd in 2009, with every OPEC member participating in the production-cutting agreement reducing output in 2009.

Outside OPEC oil production grew by some 450,000 bpd in 2009, with U.S. production increasing by 460,000 bpd or 7 percent, “the largest increase in the world last year and the largest U.S. percentage increase in our data set,” BP said.

Gas has most rapid decline

BP said that natural gas was the fuel that experienced the most rapid decline in consumption, down 2.1 percent, “the largest decline on record.”

Natural gas consumption declined worldwide except in the Middle East and Asia Pacific. Russia had the largest volumetric decline, with consumption down 6.1 percent, BP said.

OECD consumption was down by 3.1 percent, the largest decline since 1982.

The U.S. decline was modest, 1.5 percent, “as weak prices improved gas’s competitive standing against other fuels.”

“Global gas production declined for the first time on record,” with Russia down 12 percent and Turkmenistan down by 44.8 percent, driven by declining consumption in Russia and much of the rest of Europe. A factor in Europe was the availability of competitively prices liquefied natural gas.

“Continued expansion of unconventional supplies allowed the U.S. to record the world’s largest increase in production for the third consecutive year, surpassing Russia as the world’s largest producer,” BP said. Production also increased in the Middle East and Asia Pacific.

Coal consumption flat

BP said global coal consumption was flat in 2009 and global nuclear output dropped by 1.3 percent, a third consecutive global decline for that fuel source.

Hydroelectric generation grew by 1.5 percent, a below-average rate, but “nonetheless sufficient to make hydro the world’s fastest-growing major fuel in 2009,” with growth led by China, Brazil and the U.S.

Other forms of renewable energy are a small part of the global energy market, but have continued to grow rapidly, BP said.

“Continued government support, including targeted fiscal stimulus in many countries, helped to boost global wind and solar generation capacity by 31 percent and 47 percent respectively,” with wind power growth led by China and the U.S.






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