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Statistical Review shows slowed oil consumption, rise in natural gas
Kristen Nelson Petroleum News
Crude oil consumption grew by 0.9% in 2019, while natural gas consumption was up 2%, with primary energy consumption slowed to a 1.3% growth rate, less than half the 2.8% growth in 2018. Those were key findings of the bp Statistical Review of World Energy 2020, released June 17.
Slower growth in energy markets in 2019 was “in line with weaker economic growth and a partial unwinding of some of the one-off factors that boosted energy demand in 2018,” the review said, with the slowdown “particularly evident in the U.S. Russia and India, each of which exhibited unusually strong growth in 2018.” In the 2019 review, which covered 2018 data, the company said much of the demand growth in that year was weather related.
But China was an exception in 2019, the review said: its energy consumption accelerated in 2019, and as a result that country was the largest contributor to growth in all energy sectors except natural gas, where the U.S. narrowly exceeded China’s growth.
COVID-19 The company highlighted the context in which the review is released.
“The COVID-19 pandemic may well turn out to be the most tragic and disruptive event that many of us will ever live through,” Bernard Looney, the company’s chief executive officer, said in the introduction. He acknowledged the deaths which have occurred and said: “The combined health and economic shock is bound to reshape the global economic, political and social environment in which we all live and work.”
The pandemic may “accelerate emerging trends and create opportunities to shift the world onto a more sustainable path. But it also risks slowing progress if the short-term, domestic issues raised by COVID-19 are prioritized over long-term, global challenges, such as climate change.”
Spencer Dale, bp chief economist, noted severe disruption in global energy markets in 2020 due to the pandemic, and said “bp’s Statistical Review highlights the key energy trends emerging before Covid-19 and I hope will be a valuable source of information as the world emerges from the pandemic and transitions towards net zero.”
BP has set a company goal of net zero in emissions by 2050.
2019 data Statistical data gathered and analyzed in the report are for 2019.
The review cites a slow growth in carbon emissions in 2019 after a sharp increase in 2018 and credits a deceleration in primary energy consumption and an increased use of renewables and natural gas over coal. Carbon emissions from energy grew by 0.5%, less than half the 10-year average growth of 1.1%.
A 1.3% growth in primary energy consumption was driven by renewables and natural gas, the review says, with the two combined accounting for three quarters of the expansion. Apart from nuclear, all fuels grew at a slower rate than their 10 year averages.
China accounted for more than three quarters of net global growth in primary energy consumption, followed by India and Indonesia.
The United States and Germany posted the largest declines.
Oil Oil consumption grew by an average of 900,000 barrels per day, about 0.9%, led by China, with an increase of 680,000 bpd on average, and other emerging economies. Demand in Organization for Economic Cooperation and Development countries fell by 290,000 bpd.
While U.S. crude oil production grew by 1.7 million bpd, that growth was more than offset by a decline of 2 million bpd in OPEC production, led by declines in Iran, Venezuela and Saudi Arabia.
Crude oil production growth in the U.S. was the largest increase of any country for the third consecutive year, followed by significant increases in Brazil and Canada.
On the decline side, the 2 million bpd decline in OPEC production was its steepest decline in 2009, much of it driven by sanctions and economic difficulties in Iran and Venezuela, combined with the renewed OPEC+ production agreement, which resulted in a reduction of 430,000 bpd from Saudi Arabia.
By oil type, declines were concentrated in crude oil and condensate, down a combined 580,000 bpd, while natural gas liquids grew by 4.5%, up 520,000 bpd, following a trend, with NGL growth primarily in the U.S., 440,000 bpd, where NGL production doubled from 2012 to 2019 to 4.8 million bpd.
Natural gas Natural gas consumption was up 2%, well below the 5.3% growth in 2018, but still enough to account for a 24.2% share, a record, of primary energy.
U.S. and Chinese natural gas consumption growth was slower than in 2018, “as the boost from weather effects and policy driven coal-to-gas switching in China faded.”
Russia’s drop in gas consumption, down 10 billion cubic meters, the largest of any country last year, was also partly attributable to fewer unusually hot and cold days.
Production of natural gas was up 3.4%, with almost two thirds of the increase from the United States. Australia and China were also key contributors.
The U.S. and Russia led liquefied natural gas supply growth, with most of the increased supplies going to Europe.
The review says the 2019 increase in natural gas production outpaced consumption growth, with storage levels rising in most regions and prices falling sharply as a result.
Coal Consumption of coal was down by 0.6%, with its share of primary energy, 27%, at the lowest level in 16 years. Emerging economies, led by China and Indonesia, drove coal consumption, but that growth was offset by a sharp fall in OECD demand, the lowest level since the review began collecting that data in 1965.
Coal production rose 1.5%, with the only significant increases from China and Indonesia. The U.S. and Germany had the largest declines.
Renewables There was a record increase in renewable energy, including biofuels, 3.2 EJ (exajoule, a quintillion joules). This was, the review says, “the largest increment for any source of energy in 2019.”
Wind provided the largest contribution to that growth, 1.4 EJ, followed by solar at 1.2 EJ. The largest renewable contributor was China, up 0.8 EJ, followed by the U.S., 0.3 EJ, and Japan, 0.2EJ.
Hydroelectric consumption was up by 0.8%, led by China, Turkey and India, and nuclear consumption was up by 3.2%, led by China and Japan.
- KRISTEN NELSON
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