China became the worlds largest energy consumer in 2010, overtaking the US during a year that 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 Organization for Economic Cooperation and Development (OECD) economies and non-OECD countries growing at above-average rates. The figures come from the publication of the 60th annual BP Statistical Review of World Energy.
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 changejust as we are.
Overview. 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, BPs 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.
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 worlds largest energy consumer. Oil remains the worlds 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 bpd, or 3.1%, the strongest growth since 2004.
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, Mr. Rühl said. 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 countrys history due to rising offshore output. Russia and the US also contributed significantly, while Norway experienced the worlds largest production decline, said Mr. Rühl.
Oil prices remained in the $7080 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.
Natural gas. BP noted that natural gas consumption rose 7.4%, which it said was the strongest volumetric gain on record. Non-OECD economies expanded their share to over 51%; China solidified its role as Asias largest gas market. The report points out that OECD markets grew rapidly too, 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 Mr. 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).
Other fuels. Like all other fuels, coal consumption growth was above average in 2010rising by 7.6% (250 million toe). The shift toward non-OECD consumption continued, with China and India increasing coal use by 10.1% (157 million toe) and 10.8% (27 million toe). OECD coal consumption also rose by 5.2% (54.1 million toe), 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.
Renewables. Biofuels production grew by 13.8%, or about 240,00 bpd, largely in the US and Brazil. Renewables in power generationincluding wind, solar, geothermal energy and commercial biomassgrew by 15.5%, with OECD countries accounting for most of the growth though Chinas output from renewables grew by 75% and accounted for the second-largest increment after the US. Combined, these sources met 1.8% of the worlds 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 Mr. Rühl. HP