Global energy shifts

IN 2015, global primary energy consumption went up by 1%, according to the 65th edition of the BP Statistical Review of World Energy, a yearly publication of one of the leading oil companies in the world that tracks the movements in global energy markets. The increase, a minimal drop from the 1.1% recorded in 2014, was noted by the report as “the lowest global growth since 1998.”

“On the demand side, we are seeing a gradual deceleration in global energy consumption as the huge boost from globalization and Chinese industrialization slowly subsides,” Bob Dudley, group chief executive of BP, said in the report’s introduction, adding that the slowdown was compounded by the weakness in the global economy. Though energy consumption in China slackened, the country remained the largest market in the world for energy. Russia, meanwhile, had the largest volumetric decline in primary energy consumption.

“The supply of energy in recent years has been driven by different factors, notably technological advances that have increased the range and availability of different fuels,” Mr. Dudley said. He noted for instance that rapid technological gains supported the growth in renewable energy, which, last year, accounted for 2.8% of global energy consumption, up from 0.8% a decade ago, and 6.7% of global power generation.

Other resources that benefitted from technological advances were oil and natural gas. Oil maintained its position as the leading fuel in the world in 2015, accounting for 32.9% of global energy consumption. Its consumption rose by 1.9%, almost double the recent historical average, thanks in part to the member countries of Organisation for Economic Co- operation and Development. Natural gas consumption experienced a 1.7% growth worldwide, up from the 0.6% growth seen in 2014, but its production grew more rapidly by 2.2%.

In the Philippines, total demand for finished petroleum products increased by 15% in 2015. “The growth in the country’s total oil demand was attributed to the entry of additional new players, mostly direct importers and end users plus the increase in utilization of registered endusers…” the Department of Energy (doe) said. The big three major oil companies — Petron Corp., Chevron Philippines, Inc. and Pilipinas Shell Petroleum Corp. — collectively captured 60.3% market share of the total demand for petroleum products.

Petroleum product imports were up by 11.9%. “This was attributed to the increased import volume of naphtha and condensate, which was used as raw materials for petrochem[ical] production and as replacement fuel for natural gas due to scheduled maintenance shutdown of the Malampaya gas facility, respectively,” doe said. Imports of naphtha and condensate, the department added, more than doubled last year. Petroleum product exports also rose, by 46.3%.

The country’s crude imports in 2015 increased by 20.1%. Most of the imported crude oil, about 68%, came from the Middle East, particularly Saudi Arabia, while the rest originated from several Southeast Asian countries and Russia.

Energy prices were affected by the contrasting trends in demand and supply of energy, Mr. Dudley noted, causing the prices of oil, gas and coal to fall last year. Crude oil prices had the largest decline in dollar terms and percentage- wise. Natural gas prices dipped everywhere, most notably in North America. The same happened to coal prices worldwide, which fell for the fourth consecutive year.

“These price declines played a key role in prompting adjustments in energy markets: boosting demand in some markets, most notably oil; curtailing supply and shifting the fuel mix in others. The extent of this adjustment bodes well for the future stability of our industry,” Mr. Dudley said. Despite the increase in volume of imported oil in 2015, the country’s estimated total oil import bill was down by 36.3% to $8.7 billion. The amount of crude oil import, total product import cost and petroleum export earnings also experienced double-digit dips. Mr. Dudley said the energy industry is in “a period of profound change.” “Our task as an industry is to take the steps necessary to provide the energy to meet the world’s growing demand and ensure our sector remains resilient to the many factors that may buffet us in the near term,” he said. —