China became the world’s largest energy consumer in 2010 overtaking the USA during a year which saw the rebound in the global economy drive consumption higher and at a rate not seen since the aftermath of the 1973 oil price shocks.
Demand for all forms of energy grew strongly in 2010 and increases in fossil fuel consumption suggest that global carbon dioxide (CO2) emissions from energy use rose at their fastest rate since 1969.
The growth in energy consumption was broad-based, with both mature OECD economies and non-OECD countries growing at above-average rates.
The figures come from today’s publication of the 60th annual BP Statistical Review of World Energy, the longest-running, consistent set of objective, global energy data used by business, academics, and governments to inform policy and decision making.
“There were both structural and cyclical factors at work,” said Bob Dudley, BP Chief Executive. “The cyclical factor is reflected in the fact that industrial production rebounded very sharply as the world recovered from the global downturn. Structurally, the increase reflects the continuing rapid economic growth in the developing world.
“I was in China a couple of weeks ago and I came away with a very clear sense of how rigorously China is thinking about these issues. Growth is by no means the only game in town. They want to maintain social cohesion and they want to make their growth more sustainable. In sum, they are worried about energy security and climate change – just as we are.”
To address these concerns, “we can look to the markets, policy tools, technology advances and not least to the growth of renewable energies to allay these worries,” said Dudley.
“This year, we have seen that the global energy markets are resilient. In the face of significant disruptions to the world’s energy system in Japan and Libya, demand continues to be satisfied. Markets work and markets work best when they are open and transparent.”
The strong rebound of global energy consumption in 2010 followed the recent global recession. Consumption growth reached 5.6%, the highest rate since 1973. It increased strongly for all forms of energy and in all regions. Total consumption of energy in 2010 easily surpassed the pre-recession peak reached in 2008.
“Economic growth was led by the non-OECD economies which had suffered least during the crisis. By year-end, economic activity for the world as a whole exceeded pre-crisis levels driven by the so-called developing world,” said Christof Rühl, BP’s group chief economist.
Globally, energy consumption grew more rapidly than the economy, meaning that the energy intensity of economic activity increased for a second consecutive year. The data imply that global CO2 emissions from fossil fuel consumption will also have grown strongly last year.
“Energy intensity – the amount of energy used for one unit of GDP – grew at the fastest rate since 1970. And so, when all the accounting is done, planet Earth – we all – consumed more energy in 2010 than ever before,” said Rühl.
Demand in OECD countries grew by 3.5%, the strongest growth rate since 1984, although the level of OECD consumption remains roughly in line with that seen 10 years ago. Non-OECD consumption grew by 7.5% and was 63% above the 2000 level. Consumption growth accelerated in 2010 for all regions, and growth was above average in all regions. Chinese energy consumption grew by 11.2%, and China surpassed the US as the world’s largest energy consumer. Oil remains the world’s leading fuel, at 33.6% of global energy consumption, but it continued to lose market share for the 11th consecutive year.
Global oil consumption grew by 2.7 million barrels per day (Mbpd), or 3.1%, the strongest growth since 2004. Rühl said: “The growth rate was more than twice the ten-year average; it featured the first increase in OECD oil consumption since 2005 and the largest volumetric increase outside the OECD ever. China contributed the largest national increment; its consumption rose by 860,000 bpd or 10.4%. The United States, Russia, and Brazil also recorded large increments.”
The strong recovery in oil consumption was accompanied by strong growth in production though the increase was not as large as the increase in consumption. Growth was broadly split between OPEC and non-OPEC producers. In OPEC, Nigeria and Qatar accounted for the largest increases. Among non-OPEC producers, “China saw the largest increase in the country’s history due to rising offshore output. Russia and the US also contributed significantly, while Norway experienced the world’s largest production decline,” said Rühl.
Oil prices remained in the $70-80 range for much of the year before rising in the fourth quarter. With the OPEC production cuts implemented during the global recession in 2008/09 still in place, and despite informal production increases in the face of the strong recovery in consumption, average oil prices for the year as a whole were the second-highest on record. However due to the high prices, oil saw the weakest consumption growth among fossil fuels last year.
Turning to natural gas, Rühl said: “Consumption rose 7.4%, the strongest volumetric gain on record. Non-OECD economies expanded their share to over 51%; China solidified its role as Asia’s largest gas market. But OECD markets grew rapidly too (6.4%, +93 billion cubic metres), with consumption attaining all-time highs. Production rose 7.3%, also a record increment. 31% of this global growth originated in the former Soviet Union, followed by the Middle East.
“The shale gas revolution in the US and massive changes in LNG markets are reshaping the world of natural gas,” said Rühl. Over the last five years, global LNG supply grew by a cumulative 58% - three times faster than total gas production. And last year, the supply of LNG expanded by an unprecedented 22.6% (55 bcm).
Like all other fuels, coal consumption growth was above average in 2010 - rising by 7.6% (250 million tonnes of oil equivalent, mtoe). The shift toward non-OECD consumption continued, with China and India increasing coal use by 10.1% (157 mtoe) and 10.8% (27 mtoe). OECD coal consumption also rose by 5.2% (54.1 mtoe), the fastest rate for 31 years and hard on the heels of a decline of more than 10% in 2009. Among all the fossil fuels, coal consumption grew the fastest.
For the first time this year the Review includes data on renewables other than hydroelectricity. Biofuels production grew by 13.8%, or about 240,000 bpd, largely in the US and Brazil. Renewables in power generation—including wind, solar, geothermal energy and commercial biomass—grew by 15.5%, with OECD countries accounting for most of the growth though China’s output from renewables grew by 75% and accounted for the second-largest increment after the US. Combined, these sources met 1.8% of the world’s energy needs, a market share which has tripled in the past decade. “Over the last five years, their contribution to world primary energy growth was almost 10% – that is, higher than the contribution of petroleum-based products,” said Rühl.
Hydroelectricity, in absolute terms, saw its biggest increase ever. “2010 was actually the wettest year since 1900,” said Rühl. Nuclear output grew by 2%, weaker than other fuels but still an above-average growth rate.
BP press office, London: +44 (0)20 7496 4076, firstname.lastname@example.org