Slower energy demand growth helped stall acceleration of GHG emissions
Global energy demand grew last year, but the increase was well below the 10-year average as developing countries including China saw sluggish growth in energy consumption, according to a report by BP.
In the company’s Statistical Review of World Energy, worldwide energy demand grew by 1 per cent in 2016, similar to the rate seen in recent years, but below the 10-year average of 1.8 per cent.
The slower demand growth helped slow the acceleration of greenhouse gas emissions for a third year to levels not seen since the 1980’s, however, emissions were still well above targets set out by the Paris Climate Accord.
“This is a third year where we’ve seen weak growth in world energy demand … The new normal is that all of this growth is coming from developing economies,” particularly China and India, said BP Chief Economist Spencer Dale.
BP’s report also showed coal’s share in the energy mix is at around 28 per cent, down to the lowest level since 2004. Coal production fell by 6.2 per cent, its largest ever annual drop.
In 2016, low oil prices helped oil demand grow by 1.6 per cent in 2016, the fastest annual rate for fossil fuels. Globally, oil production grew by half a per cent, or 400,000 barrels per day, the lowest gain since 2009.
US shale production dropped significantly last year, but has rebounded in recent months as oil prices rose. Dale said this is something the market needs to get used to.
“U.S. tight oil is like a Weeble: It falls off but then it bounces back up again,” Dale told Reuters. “Any sense of trying to kill tight oil makes no sense.”
Dale said increasing oil demand is outstripping production growth and he predicts global oil stocks will start dropping “more materially” in the second half of 2017.
Donate now! Please support quality journalism by contributing to our Patreon campaign. Even $5 a month helps us continue delivering high quality news and analysis about Canadian and American energy stories that affect your life and your lifestyle.
According to the BP report, gas saw similar growth to oil. Also, cheaper, abundant supplies of gas helped China switch to cleaner feedstock for its power plants, resulting in a 1.7 per cent drop in demand for coal.
“It feels to me like we are seeing a decisive break in coal relative to the past,” Dale said.
China’s energy demand growth in 2015 and 2016 were 1.2 and 1.3 per cent respectively. While China remained the strongest in the world, the growth was the lowest over a two-year period since 1997-98.
With an increase of 12 per cent, renewables showed the strongest growth and accounted for one-third of the overall growth in demand. China overtook the United States for the first time as the largest producer of renewable power.
Renewables provided 4 per cent of the world’s primary energy.
The slowdown in the growth of energy demand along with the shift to cleaner fuels as well as energy efficiency resulted carbon emissions growing by 0.1 per cent. This number is similar to 2014 and 2015, making it the lowest three-year average for emissions growth since 1981-83.
“While welcome, it is not yet clear how much of this break from the past is structural and will persist. We need to keep up our focus and efforts on reducing carbon emissions,” BP Chief Executive Bob Dudley said.
