An unsustainable path

‘There is a growing mismatch between societal demands for action on climate change and the actual pace of progress, with energy demand and carbon emissions growing at their fastest rate for years’, according to Spencer Dale, BP Chief Economist, introducing the latest BP Statistical Review of World Energy, on 11 June 2019. ‘The world is on an unsustainable path,’ he stated.

Meanwhile, Bob Dudley, BP Group Chief Executive, noted: ‘The longer carbon emissions continue to rise, the harder and more costly will be the necessary eventual adjustment to net-zero carbon emissions. As I have said before, this is not a race to renewables, but a race to reduce carbon emissions across many fronts.’

This year’s Review highlights the growing divergence between demands for action on climate change and the actual pace of progress on reducing carbon emissions.

Among the key findings, global energy demand grew by 2.9% and carbon emissions increased by 2% in 2018, faster than at any time since 2010/2011. Demand growth was driven largely by China, the US and India, which accounted for over two-thirds of the growth. US energy consumption increased 3.5%, the fastest growth rate in 30 years and in contrast to the declines recorded in the past decade.

Weather effects may account for much of the strength in energy consumption. According to BP there was an unusually large number of both hot and cold days last year, which led to higher energy consumption as the demand for cooling and heating services increased. The increasing frequency of these events may help to explain the demand patterns, suggests the company.

Oil, gas and coal collectively accounted for almost three-quarters of the growth in energy demand in 2018 – their highest share for five years. 

Global oil production grew 2.2mn b/d, double its historical average, primarily from the US, but also Canada and Russia. The US recorded the largest-ever annual production increases by any country for both oil and natural gas, the vast majority of increases coming from onshore shale plays. 

Natural gas consumption and production was up over 5%, one of the strongest rates of growth for both demand and output for over 30 years, according to BP.

Global power demand grew by 3.7%, one of the strongest growth rates seen for 20 years, absorbing around half of the growth in primary energy.  On the supply side, the growth in power generation was led by renewable energy, which grew by 14.5%, contributing around a third of the growth; followed by coal (3%) and natural gas (3.9%).  China was the largest contributor to renewables growth, accounting for 45% of the global growth.  Despite the increasing adoption and penetration of renewable power, the fuel mix in the global power system remains flat, with the shares of both non-fossil fuels (36%) and coal (38%) in 2018 unchanged from their levels 20 years ago.  It hasn’t been possible to decarbonise the   power sector quickly enough to offset the growth in demand, according to BP.

The BP Statistical Review of World Energy and other related materials are available online at www.bp.com/statisticalreview

Petroleum Review’s forthcoming August issue will include more in-depth analysis of the BP Statistical Review data.