‘Tectonic’ shifts in global energy system in 2014 – BP

The year 2014 marked a period where the US grew in its importance as an oil and gas producer – overtaking the traditional producing powerhouses – while on the demand side primary energy consumption slowed markedly. These are two of the headline conclusions of the 2015 edition of the BP Statistical Review of World Energy – the 64th in the annual series.

The review highlights the continuing importance of the US shale revolution – the country overtook Saudi Arabia as the world’s biggest oil producer and surpassed Russia as the world’s largest producer of oil and gas in 2014.

On the other hand primary energy consumption slowed, with a growth of just 0.9% in 2014 – a lower rate than at any time since the late 1990s (other than in the immediate aftermath of last decade’s financial crisis). Though China remained the world’s largest growth market for energy, its growth in consumption slowed to its lowest level since 1998, says the report, as its economy moves away from energy intensive sectors.

These shifts have affected energy prices as well as the fuel mix. Oil prices have fallen sharply, driven by the strength of supply as non-OPEC production grew by a record amount while OPEC maintained its output levels to maintain market share. The growth of China’s coal consumption stalled and global natural gas growth was also weak, held back by a mild European winter triggering a sharp fall in consumption, says BP.

Echoing other analyses, the report indicates that renewables were the fastest growing form of new energy additions. They accounted for one third of the increase in overall primary energy use and now stand at around 3% of primary energy, says the report.

And, the review says that global carbon dioxide emissions from energy use grew by just 0.5%. This slow growth is largely tied into the changing pace and pattern of Chinese economic growth

Speaking at the report’s launch, BP Group Chief Executive Bob Dudley said: “The eerie calm that had characterised energy markets in the few years prior to 2014 came to an abrupt end last year. However, we should not be surprised or alarmed. These events may well come to be viewed as symptomatic of a broader shifting of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand.’