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Record energy consumption growth in 2004

by Jerome a Paris Wed Jun 15th, 2005 at 02:03:30 AM EST

BP has just published its new annual statistical survey of the energy industry. I encourage you to go download the document and look around, but here are a few facts for 2004 that are worth pointing out:

:::::::::::More::::::::::::::


From the BP press release

Rapid growth in demand for all forms of energy dominated world energy markets in 2004, leading to rising prices. While growth in demand from China in particular was exceptional, the strength of demand growth was a global phenomenon, increasing above the 10-year trend in every region of the world.

The world’s overall energy consumption grew by 4.3 per cent in 2004. In volume terms, this is the largest-ever annual increase in global primary energy consumption and is the highest percentage growth since 1984. It is exceptional that this demand growth was so geographically widespread

(...)

While China’s economy grew 9.5 per cent in 2004, this was outstripped by the rise in Chinese energy demand – up 15.1 per cent over the year. Over the past three years Chinese energy demand has risen by 65 per cent, accounting for over half the increase in global demand over the period. China now consumes 13.6 per cent of the world’s total energy.

(...)

Oil consumption in 2004 – up 3.4 per cent, or 2.5 million barrels a day (bpd) – showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase with a jump of 15.8 per cent or almost 900,000 bpd.

The high demand came despite record oil prices, which averaged $38.27 a barrel over the year (...)

Oil output rose to meet demand, exceeding 80 million bpd for the first time in 2004. Outside OPEC, production increased by 965,000 bpd in 2004, well above the 10-year average. Russian production once again rose fastest, with output up nearly 750,000 bpd. Angola, Chad, Ecuador, Equatorial Guinea and Kazakhstan all registered growth of more than 100,000 bpd. The largest declines were in the UK, down by 230,000 bpd, and the USA, down by 160,000 bpd.

OPEC production also rose rapidly, by almost 8 per cent to 32.9 million bpd, the highest level ever. This was the largest increase in OPEC production since 1986. The rise was led by Iraq – where production grew by 677,000 bpd to 2 million bpd – Saudi Arabia and Venezuela.

(...)

Coal, nuclear and hydroelectric: Global coal consumption rose 6.3 per cent, with three quarters of the rise coming from China. Coal was the fastest growing fuel globally, but was the slowest excluding Chinese demand.

BP is obviously happy with the situation, with both record demand increases AND record price increases (the second logically following the first, but apparently not enough to slow it donw...)

The impact of China cannot be overstated, on the oil market, the coal market - and the consequences on carbon emissions, which also reached record levels in 2004.

It's interesting to note as well that the two largest production increases come from two countries which are unlikely to repeat such performance: Russia, where production has been stagnating over the past 8 months now (and is expected to continue to do so), and Iraq, where there was a catching up affect after the total production stop due to the invasion in 2003.

Meanwhile demand continues to grow...

Display:
I can't help but wonder when "we" (the world) is going to hit the wall...how can we continue to consume at this rate? And yet it is also frightening to consider what "hitting the wall" might look like...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Wed Jun 15th, 2005 at 04:26:40 AM EST
Jerome those numbers speak volumes about where the world economy and environment are heading.

First off, the growth in China's energy usage exceeding its GDP growth is the wave of the future.  Remember that much of China is still shifting to a fully industrialized economy.  Whereas 20 years ago Beijing was a city of bicycles - today it is a city of cars.  As economic growth increases China's wealth, more of China wants modern standards of living.  That means MUCH more energy usage for transportation, basic living (time to buy electric appliances!!), and industry.  I believe the U.S. experienced the same pattern before and after WW2.

Second, the rapidly expanding Chinese demand for energy comes with a rapidly expanding output of CARBON.  The next ten years will likely see carbon emissions grow at ever faster rates due to China.  Even if the U.S. had been leading the way to implement the Kyoto targets, China's energy growth would likely mean that total carbon emissions would still be growing.  Thanks to the BushCo "head in the sand" policy on the climate crisis, we are now heading towards the cliff at 120mph instead of 60mph.

The wildcard in all of this is the global economy and the highly leveraged positions of BOTH the U.S. and China.  The U.S. is living waaaay beyond its means both in terms of its trade deficit and its federal budget deficit.  So far, China and other East Asian countries have been willing to keep buying dollars in order to sustain their trade surplus with the U.S.  However, I'm not sure how much longer China can maintain that approach.  China's financial system is proving to be more corrupt than many suspected and the lack of transparency in financial transactions may hide a house of cards.  If China experiences any kind of credit crunch, the echoes will be worst in the U.S. where we rely on that credit coming back to us to feed our own credit habit.

Should both the U.S. and Chinese economies contract simultaneously, the result would be a severe downturn in global economic activity.  The one benefit of such a global recession is that it usually leads to a significant drop in energy use, especially in transitional economies.  Russia in the mid 1990s saw its carbon emissions fall dramatically as it went into economic freefall during the transition to a free market.  

Just a few thoughts on another brilliant diary.
by Hoya90 (hoya90jmk-at-yahoo-dot-com) on Wed Jun 15th, 2005 at 06:47:42 AM EST
Thanks for the kind words. The brilliance should be attributed to BP's ability to compile comprehensive statistics...

All the points YOU make are spot on.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 15th, 2005 at 07:52:33 AM EST
[ Parent ]
Compare this with the ExxonMobil report you discussed the other day.

Overall growth from now until 2030 is about 1.5 per cent per year.

And of course, they have renewables growing at only 10% per year when solar has been growing at 30% and wind at around 20% for the past five years.

by jam on Wed Jun 15th, 2005 at 07:37:25 AM EST
That'd be right, because wind and solar are coming off a very low base, whereas the predominant form of renewable is hydro, which has a much slower growth rate, so it drags down the average.

-Droneboy Thankyou and goodnight.
by droneboy ( ~ raifsarcich at ya hoo d ot c omm ~) on Wed Jun 15th, 2005 at 08:26:57 PM EST
[ Parent ]
Actually, they have solar at 9.5%, wind at 11.1%, and hydro at 2.2%. ridiculous.
by jam on Thu Jun 16th, 2005 at 01:22:19 PM EST
[ Parent ]
Forgive me for mentioning this again, but I believe it's important from a Big Picture point of view:

"From 1988 to 1998, U.S. wind, solar, geothermal, and hydropower grew at 27 percent per year, and the contribution to U.S. energy supply from nonhydro, nonbiomass renewable sources grew nearly 100fold from 1980 to 1995. Even so, wind, solar, and geothermal energy accounted for only about 0.5 percent of the energy consumed in 2002. The contribution from fossil fuels did drop from 93 percent in 1970 to 85 percent in 2002, but it did so only because nuclear power made a substantial new contribution, supplying 8 percent of the 2002 energy consumption. Globally, the situation is similar. In 2000, nearly 90 percent of global energy came from fossil fuels.

"Current forecasts project little improvement. In its Annual Energy Outlook 2004, the U.S. Department of Energy (DOE) expects coal, oil, and natural gas to provide 89 percent of all new U.S. energy through the year 2025. In fact, fossil fuels are expected to increase, from 85 percent in 2002 to 87 percent in 2025. The International Energy Agency's (lEA's) World Energy Outlook for 2002 paints a similar picture: Coal, oil, and natural gas are expected to provide more than 90 percent of all new energy from 2000 through 2030."

--from US National Academy of Sciences, "Issues in Science & Technology"

http://www.findarticles.com/p/articles/mi_qa3622/is_200504/ai_n13617864#continue

by Plan9 on Wed Jun 15th, 2005 at 08:42:22 AM EST
I'd started to write a comment here about the growth in U.S. demand for imported liquefied natural gas (having seen a New York Times article on this), but it grew beyond what I thought was reasonable, so I've posted it as a separate diary, "For Jerome: More on Energy Consumption".  Please come visit.
by The Maven on Wed Jun 15th, 2005 at 09:59:35 AM EST
Jerome,

This was behind the Financial Times firewall and I though it was pertinent.  I guess I'm kinda treating this as an energy-related open thread...

London Financial Times
June 15, 2005

Desperate To Pump More Crude, Iraq Risks Permanent Damage To Its Oilfields

By Javier Blas, Carola Hoyos and Steve Negus

...Two years of sabotage and violence have gutted Iraq's already fragile infrastructure, driven away investors, and possibly caused irreversible damage to its valuable oilfields. Meanwhile, international traders and refiners have grown frustrated by delays, cancellations and the deteriorating quality of the oil.

Mussab Al-Dujayli, head of Iraq's state oil company, admitted last week: "We could not meet our customers' demands due to lack of security, lack of electricity, insufficient infrastructure, bad logistics."

Ibrahim Bahr al-Uloum, Iraq's oil minister, believes the country will be limited to exporting 1.5m barrels a day until the end of next year. Only then will Iraq have the money and stability needed to get oil services companies to stem the deterioration of its oilfields.

...with Iraq desperately short of money, its oilfields are being driven to pump more than they should. This may be doing permanent damage to the oilfields.

For example, oil executives said that water injection systems were failing at Iraq's main Rumaila oilfield, in the south, which means the field has insufficient well pressure.

Petroleum engineers inject water into older oilfields, such as Rumaila, to force oil to the surface. When water injection is interrupted, the prudent engineer reduces the field's pumping rate to avoid causing irreversible damage to the oilfield. At Rumaila this is not being done.

"The problem is that pressure problems could lead to a permanent decline in production," said one European buyer of Iraq's oil. "The solution to the production problem is more investment, but that looks impossible because of the lack of security."

...In the north, Iraq's main export pipeline looks all but impossible to protect from sabotage. Meanwhile in the south, local tribal disputes, which often go unreported, hamper efforts to restore oilfields, while security costs and other reconstruction bills all reduce the amount of money available for the oil industry.

...The problems are beginning to show up in the quality of Iraqi oil exports. Basra Light, the country's main crude oil, has become more dense and sulphuric. This reduces its value because it is more difficult and expensive to refine into products such as gasoline. Subsequently, Iraq has had to lower the price of its oil, further cutting revenues.

It becomes ever clearer that their postwar planning did not extend much past an echo-chamber recitation of "...we will be greeted as liberators".

by OkieByAccident on Wed Jun 15th, 2005 at 11:01:00 AM EST
I usually read the FT door-to-door but i somehow missed this one. So thanks!
Nothing unexpected there, sadly. No investment is taking place, so they have to make do with what's on the ground, which is not really the most up-to-date stuff anyway, after 15 years of sanctions + war.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 15th, 2005 at 03:48:31 PM EST
[ Parent ]
just stumbled into this phenomenal site - it has oil related news from around the world...

of particular interest is this site, Energy Headlines from Energy Bulletin.net that post daily updates re energy news...

one thought that just struck me - the country that develops the next alternative fuel transportation/car - will rule the world in the coming decades.  as peak oil and depleted fields begin to impact the world, the non-oil car will be the major ticket and people will pay what the market will bear...

by edrie on Thu Jun 16th, 2005 at 01:03:06 AM EST


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