Two steps for­ward, one step back

Global en­ergy de­mand growth above its 10-year aver­age. For the first time, the BP Sta­tis­ti­cal Re­view of World En­ergy in­cludes data on the fuel mix in the power sec­tor, which strik­ingly is un­changed from 20 years ago, and key ma­te­ri­als for the chang­ing ene

Oil and Gas - - CONTENT - Source: BP Me­dia

In­tro­duc­ing the 2018 edi­tion of the BP Sta­tis­ti­cal Re­view of World En­ergy, Bob Dud­ley, BP group chief ex­ec­u­tive, said, “2017 was a year where struc­tural forces in the en­ergy mar­ket con­tin­ued to push for­ward the tran­si­tion to a lower car­bon econ­omy, but where cycli­cal fac­tors have re­versed or slowed some of the gains from prior years. These fac­tors, com­bined with ris­ing de­mand for en­ergy, has re­sulted in a ma­te­rial in­crease in car­bon emis­sions fol­low­ing three years of lit­tle or no growth.”

Data pub­lished in the Re­view – the 67th an­nual edi­tion – show that:

• growth in en­ergy de­mand in­creased, led by grow­ing de­mand for nat­u­ral gas and re­new­ables,

• gains in en­ergy ef­fi­ciency slowed as in­dus­trial ac­tiv­ity in the OECD ac­cel­er­ated and out­put from China’s most en­ergy-in­ten­sive sec­tors re­turned to growth,

• coal con­sump­tion in­creased for the first time in four years, led by grow­ing de­mand in In­dia and China, and

• car­bon emis­sions are es­ti­mated to have in­creased after three years of lit­tle to no growth.

In 2017 global en­ergy de­mand grew by 2.2%, above its 10-year aver­age of 1.7%. This above-trend growth was driven by stronger eco­nomic growth in the de­vel­oped world and a slight slow­ing in the pace of im­prove­ment in en­ergy in­ten­sity.

De­mand for oil grew by 1.8% while growth in pro­duc­tion was be­low aver­age for the sec­ond con­sec­u­tive year. Pro­duc­tion from OPEC and the 10 other coun­tries that agreed cuts de­creased, while pro­duc­ing coun­tries out­side of that group, par­tic­u­larly the US driven by tight oil, saw in­creases. Con­sump­tion ex­ceeded pro­duc­tion for much of 2017 and as a re­sult OECD in­ven­to­ries fell back to more nor­mal lev­els. 2017 was a strong year for nat­u­ral gas with con­sump­tion up 3% and pro­duc­tion up 4% – the fastest growth rates since im­me­di­ately fol­low­ing the global fi­nan­cial cri­sis. The sin­gle big­gest fac­tor fu­el­ing global gas con­sump­tion was the surge in Chi­nese gas de­mand, where con­sump­tion in­creased by over 15%, driven by govern­ment en­vi­ron­men­tal poli­cies en­cour­ag­ing coal-to-gas switch­ing.

Re­new­ables grew strongly in 2017, with wind and so­lar lead­ing the way. Coal con­sump­tion was also up, grow­ing for the first time since 2013.

Bob Dud­ley com­mented: “This year’s Re­view looks at the en­ergy mix within the power sec­tor, for the first time, which as­ton­ish­ingly shows that the share of coal in the sec­tor is un­changed from 20 years ago.

“As we have said in our En­ergy Out­look, our Tech­nol­ogy Out­look and now our

Sta­tis­ti­cal Re­view, the power sys­tem must de­car­bonise. We con­tinue to be­lieve that gains in the power sec­tor are the most ef­fi­cient way to drive down car­bon emis­sions in com­ing decades.”

RE­VIEW HIGH­LIGHTS PRI­MARY EN­ERGY

• Pri­mary en­ergy con­sump­tion growth av­er­aged 2.2% in 2017, up from

1.2 % last year and the fastest since 2013. This com­pares with the 10-year aver­age of 1.7% per year.

• By fuel, nat­u­ral gas ac­counted for the largest in­cre­ment in en­ergy con­sump­tion, fol­lowed by re­new­ables and then oil.

• En­ergy con­sump­tion rose by 3.1% in China. China was the largest growth mar­ket for en­ergy for the 17th con­sec­u­tive year.

• Car­bon emis­sions from en­ergy con­sump­tion in­creased by 1.6%, after lit­tle or no growth for the three years from 2014 to 2016.

• Oil

• The oil price (Dated Brent) av­er­aged $54.19 per bar­rel, up from $43.73/ bar­rel in 2016. This was the first an­nual in­crease since 2012.

• Global oil con­sump­tion growth av­er­aged 1.8%, or 1.7 mil­lion bar­rels per day (b/d), above its 10year aver­age of 1.2% for the third con­sec­u­tive year. China (500,000 b/d) and the US (190,000 b/d) were the sin­gle largest con­trib­u­tors to growth.

• Global oil pro­duc­tion rose by 0.6 mil­lion b/d, be­low aver­age for the sec­ond con­sec­u­tive year. US (690,000 b/d) and Libya (440,000 b/d) posted the largest in­creases in out­put, while Saudi Ara­bia (-450,000 b/d) and Venezuela (-280,000 b/d) saw the largest de­clines.

• Re­fin­ery through­put rose by an aboveav­er­age 1.6 mil­lion b/d, while re­fin­ing ca­pac­ity growth was only 0.6 mil­lion b/d, be­low aver­age for the third con­sec­u­tive year. As a re­sult, re­fin­ery util­i­sa­tion climbed to its high­est level in nine years.

NAT­U­RAL GAS

• Nat­u­ral gas con­sump­tion rose by 96 bil­lion cu­bic me­tres (bcm), or 3%, the fastest since 2010.

• Con­sump­tion growth was driven by China (31 bcm), the Mid­dle East

(28 bcm) and Europe (26 bcm). Con­sump­tion in the US fell by 1.2%, or 11 bcm.

• Global nat­u­ral gas pro­duc­tion in­creased by 131 bcm, or 4%, al­most dou­ble the 10-year aver­age growth rate. Rus­sian growth was the largest at 46 bcm, fol­lowed by Iran (21 bcm).

• Gas trade ex­panded by 63 bcm, or 6.2%, with growth in LNG out­pac­ing growth in pipeline trade.

• The in­crease in gas ex­ports was driven largely by Aus­tralian and US LNG (up by 17 and 13 bcm re­spec­tively), and Rus­sian pipeline ex­ports (15 bcm).

COAL

• Coal con­sump­tion in­creased by 25 mil­lion tonnes of oil equiv­a­lent (mtoe), or 1%, the first growth since 2013.

• Con­sump­tion growth was driven largely by In­dia (18 mtoe), with China con­sump­tion also up slightly (4 Mtoe) fol­low­ing three suc­ces­sive an­nual de­clines dur­ing 2014-2016. OECD de­mand fell for the fourth year in a row (-4 mtoe).

• Coal’s share in pri­mary en­ergy fell to 27.6%, the low­est since 2004.

• World coal pro­duc­tion grew by 105 mtoe or 3.2%, the fastest rate of growth since 2011. Pro­duc­tion rose by 56 mtoe in China and 23 mtoe in the US.

RE­NEW­ABLES, HY­DRO AND NU­CLEAR

• Re­new­able power grew by 17%, higher than the 10-year aver­age and the largest in­cre­ment on record (69 mtoe).

• Wind pro­vided more than half of re­new­ables growth, while so­lar con­trib­uted more than a third de­spite ac­count­ing for just 21% of the to­tal.

• In China, re­new­able power gen­er­a­tion rose by 25 mtoe – a coun­try record, and the sec­ond largest con­tri­bu­tion to global pri­mary en­ergy growth from any sin­gle fuel and coun­try, be­hind nat­u­ral gas in China.

• Hy­dro­elec­tric power rose by just

0.9%, com­pared with the 10-year aver­age of 2.9%. China’s growth was the slow­est since 2011, while Euro­pean out­put de­clined by 10.5% (-16 mtoe).

• Global nu­clear gen­er­a­tion grew by 1.1%. Growth in China (8 mtoe) and Ja­pan (3 mtoe) was par­tially off­set by de­clines in South Korea (-3 mtoe) and Tai­wan (-2 mtoe).

POWER GEN­ER­A­TION

• Power gen­er­a­tion rose by 2.8%, close to the 10-year aver­age. Prac­ti­cally all growth came from emerg­ing economies (94%). Gen­er­a­tion in the OECD has re­mained rel­a­tive flat since 2010.

• Re­new­ables ac­counted for al­most half of the growth in power gen­er­a­tion (49%), with most of the re­main­der pro­vided for by coal (44%).

• The share of re­new­ables in global power gen­er­a­tion in­creased from 7.4% to 8.4%.

KEY MA­TE­RI­ALS

• Cobalt pro­duc­tion has grown by only 0.9% per an­num since 2010, while Lithium pro­duc­tion has in­creased by 6.8% p.a. over the same pe­riod.

• Cobalt prices more than dou­bled in 2017, while Lithium car­bon­ate prices in­creased by 37%

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