Put 53 Years on the Clock: The End of Easy Oil Is Within Sight
Love it or hate it, British multinational oil and gas company BP is one the world’s top institutional experts on energy. Besides being a business leader in its industry — the sixth largest integrated oil company (IOC) by market cap in 2013 — the supermajor is at the forefront of the semi-commercial, semi-academic conversation about the future of energy use at large. Since 1952, BP has offered a share of its two cents in the form of an annual statistical review, the aim of which is to share data and insight about current energy markets and where the world could be heading.
The report proper is somewhat dense and is generally only partially digested, if at all, by the media, but the 2013 review contained a few salient points that were thrust into the spotlight. First, and most broadly, was this insight: Demand growth for fossil fuels outpaced supply growth.
“For each of the fossil fuels, global consumption rose more rapidly than production,” states the report. In 2013, total global oil consumption increased by 1.4 percent, or by 1.4 million barrels per day (b/d), while oil production increased by “just” 0.6 percent, or 560,000 b/d. Total global natural gas consumption also increased by 1.4 percent, but production only grew by 1.1 percent. Global primary energy consumption increased by 2.3 percent in 2013, up from 1.8 percent growth in 2012. Although growth accelerated for major energy sources like oil, coal, and nuclear power, overall energy consumption growth is still below its ten-year average of 2.5 percent.
In the chart below, you can see how production and consumption has changed overtime for various regions. Note that Asia Pacific consumption (on the right in orange) has exploded, not only outpacing production growth in the region but also outpacing demand growth in nearly every other region. Emerging economies, which make up a large share of the Asia Pacific profile, accounted for about 80 percent of new consumption in 2013. Also note the relatively sharp increase in North American production (on the left in lime green.)