Dramatic Shift From Coal Slows Carbon Emissions
The 65th edition of the BP Statistical Review of World Energy, launched this week, highlights that while natural gas and oil recorded solid growth in 2015, global demand for coal saw its largest fall on record.
Sluggish demand growth together with the shift in the energy mix away from coal meant that the growth in carbon emissions from energy consumption stalled in 2015. The year saw the slowest growth in emissions in nearly a quarter of a century (aside from immediately following the financial crisis).
The Review shows that in 2015 global demand for primary energy grew by only one percent, significantly slower than the 10-year average. This reflected continued weakness in the global economy and lower growth in Chinese energy consumption as the country shifts from an industrial to a service-driven economy.
On the supply side, technological advances have increased the range and availability of different fuels. The U.S. shale revolution has unlocked huge swathes of oil and gas resources, and rapid technology gains have supported strong growth in renewable energy.
Prices for all fossil fuel energy fell last year, prompting adjustments in the energy markets; boosting demand in some markets – most notably oil which gained market share for the first time since 1999 – and curtailing supply and shifting the fuel mix in others.
Review highlights – energy developments
Global primary energy consumption increased by just one percent in 2015, similar to growth in 2014 (+1.1 percent), but much slower than the 10-year average of 1.9 percent a year.
Oil remained the world’s leading fuel, accounting for 32.9 percent of global energy consumption, and gaining market share for the first time since 1999.
Coal remained the second largest fuel by market share (29.2 percent), but was the only fuel that lost global market share in 2015.
Natural gas market share of primary energy consumption was 23.8 percent.
Energy consumption growth was below the 10-year average for all regions except Europe and Eurasia.
Although emerging economies continued to dominate the growth in global energy consumption, growth in these countries in 2015 (at 1.6 percent) was again well below its 10-year average rate. Emerging economies now account for 58.1 percent of global energy consumption.
Energy consumption in China grew 1.5 percent in 2015, the slowest rate in almost 20 years. Despite this, China remained the world’s largest growth market for energy for a fifteenth consecutive year.
Prices for all fossil fuels fell in 2015. Crude oil prices recorded the largest annual decline on record in dollar terms, and the largest percentage decline since 1986.
Oil
Global oil consumption grew by 1.9 million barrels per day (bpd), or 1.9 percent – nearly double the recent historical average (+1 percent) and significantly stronger than the increase of 1.1 million bpd seen in 2014.
The relative strength of consumption was driven by the OECD countries, where consumption increased by 510,000 bpd (+1.1 percent), compared with an average decline of 1.1 percent over the past decade.
Growth was well above recent historical averages in the U.S. (+1.6 percent, or 290,000 bpd) and the EU (+1.5 percent, or 200,000 bpd), while Japan (-3.9 percent, or -160,000 bpd) recorded the largest decline in oil consumption.
Outside the OECD, net oil importing countries also recorded significant increases: China (+6.3 percent, or 770,000 bpd) once again accounted for the largest increment to demand, while India (+8.1 percent, or 310,000 bpd) passed Japan as the world’s third-largest oil consumer. But this growth was offset by weaker growth in oil producers, so that oil demand in non-OECD as a whole (+2.6 percent, or 1.4 million bpd) was below its recent historical average.
Global oil production increased even more rapidly than consumption for a second consecutive year, rising by 2.8 million bpd or 3.2 percent, the strongest growth since 2004.
Production in Iraq (+750,000 bpd) and Saudi Arabia (+510,000) rose to record levels, driving OPEC production up by 1.6 million bpd to 38.2 million bpd, exceeding the previous record reached in 2012.
Production outside OPEC slowed from last year’s record growth but still grew by 1.3 million bpd. The U.S. (+1 million bpd) had the world’s largest annual growth increment and remained the world’s largest oil producer. Elsewhere, production growth in Brazil (+180,000 bpd), Russia (+140,000 bpd), the U.K. and Canada (+110,000 bpd each) was partly offset by declines in Mexico (-200,000 bpd), Yemen (-100,000 bpd) and elsewhere.
Crude oil trade was lifted by growing exports from the Middle East (+550,000 bpd), while Europe and China accounted for the largest increases in imports (+770,000 and +530,000 bpd respectively).
Growth in refined products exports was again led by the U.S. (+470,000 bpd); the country’s net oil imports fell to 4.8 million bpd, the lowest since 1985.
Natural gas
World natural gas consumption grew by 1.7 percent, a significant acceleration from the very weak growth (+0.6%) seen in 2014 but still below the 10-year average of 2.3 percent. Growth was below average outside the OECD (+1.9 percent, accounting for 53.5% of global consumption) but above average in the OECD countries (+1.5 percent).
Among emerging economies, Iran (+6.2 percent) and China (+4.7 percent) recorded the largest increases in consumption, even though growth in China was weak compared with its 10-year average growth of 15.1 percent. Russia (-5 percent) recorded the largest incremental decline, followed by Ukraine (-21.8 percent).
Among OECD countries, the U.S. (+3 percent) accounted for the largest growth increment, while EU consumption (+4.6 percent) rebounded after a large decline in 2014.
Globally natural gas accounted for 23.8 percent of primary energy consumption.
Global LNG trade increased by 1.8 percent. Export growth was led by Australia (+25.3 percent) and Papua New Guinea (+104.8 percent), offsetting declines in shipments from Yemen (-77.2 percent). Higher net LNG imports for Europe (+15.9 percent) and rising Middle Eastern imports (+93.8 percent) were partly offset by declines in net imports in South Korea (-10.4 percent) and Japan (-4 percent).
Coal
Global coal consumption fell by 1.8 percent in 2015, well below the 10-year average annual growth of 2.1 percent and the largest percentage (and volumetric) decline in the data set. Coal’s share of global primary energy consumption fell to 29.2 percent, the lowest share since 2005.
The net decline in coal consumption was entirely accounted for by the U.S. (-12.7 percent, the world’s largest volumetric decline) and China (-1.5 percent), with more modest increases registered in India (+4.8 percent) and Indonesia (+15 percent).
Global coal production fell by four percent, with large declines in the U.S. (-10.4 percent), Indonesia (-14.4 percent), and China (-2 percent).
Renewables (including wind, solar, and biofuels)
Renewable energy in power generation continued to increase in 2015, reaching 2.8 percent of global energy consumption, up from 0.8 percent a decade ago.
Renewable energy used in power generation grew by 15.2 percent (or 213 Terra-watt hours), an increment which was roughly equal to all of the increase in global power generation. Renewables accounted for 6.7 percent of global power generation, up from 2.0 percent a decade ago.
China (+20.9 percent) and Germany (+23.5 percent) recorded the largest increments in renewables in power generation.
Globally, wind energy (+17.4 percent) remains the largest source of renewable electricity (52.2 percent of renewable generation), with Germany (+53.4 percent) recording the largest growth increment.
Solar power generation grew by 32.6 percent with China overtaking both Germany and the U.S. to become the world’s leading generator of solar energy.
Global biofuels production grew by 0.9 percent, well below the 10-year average of 14.3 percent.
Carbon emissions
Emissions of CO2 from energy consumption globally increased by just 0.1 percent in 2015. Other than the recession of 2009, this represented the lowest growth rate since 1992. The drop was driven by slower energy consumption growth, as well as a shift in the fuels mix.
Regionally, emissions growth was below average in every region except Europe and Eurasia.
The Review is available here.