One of my favourite publications is the annual BP Statistical Review of World Energy, the 2009 edition of which has just been published. I do not read it in bed – that would be sad – but make extensive use of it in my work.
The statistical review gives production and consumption data for the world as a whole, and many individual countries. In addition to the primary energy totals, there are separate statistics for oil, natural gas, coal, nuclear energy and hydroelectricity.
BP’s publication is undoubtedly the best source of such data and is widely used as a reference point even by bodies such as the International Energy Agency.
Total primary energy consumption in 2008 was just 1.4% higher than in the previous year, which was the smallest increase for a long time. The financial and economic crises that have beset many countries are presumably the reason for that.
There were significant geographical variations, however. Energy consumption in the Asia-Pacific region was 4.1% higher in 2008; in Africa, it was also up 4.1%, and in the Middle East, it increased 5.9%. In contrast, there was no growth in Europe and a 2% fall in North America, including a 2.8% fall in the US. Here in the UK, consumption was 1.7% lower.
Energy consumption in China increased by a massive 7.2%, and in India by 4.9%. The increases may be lower this year, but these two countries are undoubtedly having a big impact on worldwide energy trends.
Oil accounted for 35% of the world’s primary energy consumption in 2008. That percentage has been declining slowly but steadily – for example, from 39% a decade ago. Gas consumption accounted for 24% of the total. That proportion has changed little over the last few years.
Coal has been the main beneficiary, with a 29% share in 2008, up from 24% a decade ago. Worldwide coal consumption in 2008 was 3.1% higher than in the previous year.
Coal has been relatively cheap recently in comparison with oil&gas, notably for electricity generation. That would change if more countries imposed carbon taxes or other environmental measures.
In the UK, total primary consumption was 1.7% lower than in the previous year. Gas accounted for 41% of the total, coal 30%, nuclear 15%, oil 12% and hydro just 2%. The relatively high shares for gas and coal may be surprising, but the reason is that these fuels are mainly used in power stations to generate electricity.
Gas consumption in the UK increased by 7% over the decade, to reach 93.9billion cu m in 2008. However, UK Continental Shelf gas production fell by 23% over the same period, to 69.6billion cu m. Thus, we had to import 26% of our gas needs and have been a net gas importer since 2004.
Oil consumption fell 3% over the decade, but UKCS oil production nearly halved, and we have also been a net oil importer since 2006.
Coal consumption fell 8% in the 10 years to 2008, presumably because of environmental policies to reduce carbon emissions. However, domestic coal production more than halved – although there was an increase last year.
Finally, the consumption and production of nuclear energy halved over the decade, including a massive 17% fall last year. The nuclear statistics surprised me, but are presumably a consequence of the phasing out of some nuclear power stations.
The UK Government is keen to revive the nuclear industry, but the SNP Government opposes that, so it is unlikely that any new stations will be built in Scotland in the near future – although there is increasing pressure on the Scottish Nationalists to change their policy.
It is difficult to forecast UK energy consumption trends because there are conflicting factors at work. I expect total consumption to continue to decline because of increasing emphasis on energy efficiency.
The 2009 total will inevitably be lower because of the ongoing economic recession, and the future levels of oil&gas prices will have significant impacts on consumption patterns.
There is also growing interest in renewable energy here in the UK and in many other countries. However, one of the few deficiencies of the BP statistical review is that it excludes wind, geothermal and solar power generation, which are increasingly important – particularly wind energy.
I hope this deficiency can be remedied in the 2010 edition.
Tony Mackay is MD of economists Mackay Consultants
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