Global natural gas production rose 3.1% last year, with the United States leading the way as the largest producer with a growth rate of more than 7.7% from 2010, according to BP plc's 61st annual Statistical Review of World Energy 2012.
The United States also recorded the largest non-OPEC oil production increase for the third consecutive year, BP economists found.
"In my mind it is no coincidence that the innovations driving the renaissance in U.S. oil and gas production are taking place in one of the most open and competitive upstream segments in the world," said BP CEO Bob Dudley, who presented the report in London last Wednesday. "The example of North America highlights how competition and a level playing field foster innovation, ultimately leading to the production of previously inaccessible, new unconventional resources."
The latest annual review, which was put together by BP's economics team using statistical data from 1965 to 2011, covers all forms of energy use worldwide and is considered an objective, global snapshot that is used by business, academia and governments to inform policy and decision making.
At the end of 2011 North America's estimated proved natural gas reserves totaled 382.3 Tcf, according to BP. The United States had about 299.8 Tcf, or 4.1% of the worldwide total, with a reserves-to-production (R/P) ratio of 13. Canada at the end of 2011 had about 70 Tcf (1%) with a R/P ratio of 12.4, while Mexico had 12.5 Tcf (0.2%) and a R/P ratio of 6.7.
By comparison, the Russian Federation's total proved gas reserves were estimated at 1,575 Tcf (21.4%) with a R/P ratio of 73.5. For 2011 Iran's total proved reserves were estimated at 1,168.6 Tcf (15.9%); Qatar's were 884.5 Tcf (12%); and Turkmenistan's were 858.8 (11.7%). No R/P ratio was given for Iran, Qatar or Turkmenistan.
Worldwide natural gas consumption grew by 2.2% in 2011, with consumption growth below average in all regions except in North America, where low prices lifted demand, according to BP.
Outside North America, the largest volumetric gains in gas consumption were in China (21.5%), Saudi Arabia (13.2%) and Japan (11.6%), partly offset by the largest decline on record in the European Union, where consumption fell almost 10% because of a weak economy, high prices, warm weather and growth in renewable power generation.
A "general weakness" in global gas consumption growth led to a modest increase in worldwide gas trade of 4% last year. Liquefied natural gas (LNG) shipments were up by 10.1%, with Qatar (34.8%) accounting for nearly all (87.7%) of the increase, according to BP. Among LNG importers, the largest volumetric growth was in Japan and the UK. LNG now accounts for almost one-third (32.3%) of global gas trade, BP economists said.
Natural gas pipeline shipments were up by only 1.3% last year, with declines in imports by the United States, the UK, Germany and Italy offsetting growth in China (from Turkmenistan), Ukraine (from Russia) and Turkey (from Russia and Iran).
Aside from 2011's major energy crises in Japan and production disruptions in Libya, the 2011 data underscored how several longer-term trends remain in place, Dudley said.
"The center of gravity for world energy consumption continues to shift" from the group of countries that belong to the Organisation for Economic Co-operation and Development (OECD) to emerging economies, especially in Asia, he said. "The world is not structurally short of hydrocarbon resources -- as our data on proved reserves confirms year after year -- but long lead times and various forms of access constraints in some regions continue to create challenges for the ability of supply to meet demand growth at reasonable prices."
All of the energy net growth last year was in emerging economies, with China accounting for 21% of global consumption, BP said. OECD consumption declined, "led by a sharp decline in Japan -- in volumetric terms, the world's largest decline. The data suggests that growth in global carbon dioxide emissions from energy use continued in 2011 but at a slower rate than in 2010."
Natural gas prices in Europe and Asia, including spot markets and those indexed to oil, increased "broadly in line" with oil prices, but movements across 2011 varied widely, economists said. North American prices "reached record discounts to both crude oil and to international gas markets due to continued robust regional growth. Coal prices increased in all regions."
Although none of last year's historic energy-related events occurred in North America, BP Chief Economist Christof Ruhl said 2011 "was anything but a boring year" for energy.
Among other things, Ruhl pointed to the political unrest and violence that led to outages in oil and natural gas production in parts of the Arab world, as well as the shutdown of Fukushima nuclear generators and earthquake-related reductions in Japanese coal-fired power generation, as the two biggest energy-related events in 2011.
Other big energy turnabouts last year were the subsequent closures of more nuclear reactors in Japan and Europe following Fukushima, the first annual average oil price above $100/bbl, the first release of strategic petroleum reserves since 2005, the largest increase in OPEC production since 2008, an "exceptional" swing in European weather, as well as major flooding in Australia that impaired coal production, Ruhl said.
"And yet nothing in the aggregate data indicates anything out of the ordinary," said the BP economist. "In fact, both GDP [gross domestic product] and energy consumption growth last year landed right at their long-term average."
However, the global averages "hide a mixed picture by fuel...Oil demand grew by less than 1% -- the slowest rate amongst fossil fuels -- while gas grew by 2.2%, and coal was the only fossil fuel with above-average annual consumption growth at 5.4% globally, and 8.4% in the emerging economies...
"The fossil fuel mix continues to change with oil, the world's leading fuel at 33.1% of global energy use, losing share for 12 consecutive years. Oil consumption reached 88 million b/d, after a below-average rise of 0.6 million b/d or 0.7%."
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