The United States claimed the title in 2012 for the leading production growth for not only natural gas but also oil, boosted by its considerable unconventional stores, according to BP plc's annual benchmark of global energy resources.
With rising U.S. natural gas output driving domestic prices lower, coal-to-gas displacement also put the United States on top for the largest decline in coal consumption, said BP's 62nd Statistical Review of World Energy. Economists see continued growth in global natural gas and oil resources, particularly in the United States.
"The U.S. recorded the world's highest growth in production of both oil and natural gas in 2012, on the back of increasing production of unconventional hydrocarbons such as tight oil, an example of the increasing diversity of energy sources as the global market continues to adapt, innovate and evolve," the report noted.
Oil remains the world's leading fuel, at 33.1% of global energy consumption, but it continued to lose market share for the 13th consecutive year, and its current market share is the lowest in BP's data set, which begins in 1965, the review noted.
"For those of us in the energy industry, the challenges are about how we respond to the big shifts we are seeing -- a shift in demand toward emerging economies and a shift in supply toward a greater diversity of energy sources, including unconventionals," said BP Group CEO Bob Dudley. "The data show there is ample energy available. Our challenge as an industry is to make the best choices about where to invest. We want to provide energy in ways that enable us to be both safe and competitive -- deploying our strengths while reducing our risks, and managing our costs."
Because of lower natural gas prices and reduced gas drilling, BP trimmed its estimate of U.S. gas reserves, a cut that was borne out in a recent review by Fitch Ratings (see Daily GPI, June 3). By BP estimates, domestic reserves ended 2012 at about 282.5 Tcf, or 8 trillion cubic meters (tcm), down about 105.9 Bcf (3 billion cubic meters) from 2011.
Overall, world natural gas consumption grew by 2.2%, below the historical average of 2.7%. In addition, consumption growth was above the 10-year average in all of the Americas (North, South, Central), and in Africa, with the United States (4.1%-plus) recording the largest increment in the world. Globally, natural gas accounted for 23.9% of primary energy consumption.
Global natural gas production grew by 1.9%, and the United States (4.7%-plus) "once again recorded the largest volumetric increase and remained the world's largest producer." Meanwhile, worldwide liquefied natural gas (LNG) trade declined for the first time on record (0.9% loss), while pipeline trade grew weakly (0.5% gain).
Global proven gas reserves at the end of 2012 were estimated at 6,614.4 Tcf (187.3 tcm), or 6.6 quadrillion cubic feet (Qcf) -- "enough for about 56 years worth of global production at current rates," said BP. In the report last year, estimated global gas reserves were put at 7,359.6 Tcf (208.4 tcm), or 7.4 Qcf.
"While natural gas grew at a below-average rate, it was the only fossil fuel to see consumption growth accelerate in 2012," according to BP. "Cheaper natural gas competed strongly with coal in North America, displacing it as a power feedstock. Hydroelectric and renewable energy also competed strongly against coal globally; renewables in power generation grew by 15%. However in Europe, where gas was more expensive, coal was often the fuel of choice for power generation, while the LNG tankers that used to supply Europe turned toward Asia."
Worldwide, proven oil reserves were estimated at 1,669 billion bbl at the end of 2012, up slightly from year-ago estimates of 1,654 billion bbl. The newest estimate is enough to maintain current global production levels for 53 years, BP noted. In the United States, oil reserves jumped to 35 billion bbl from 31 billion bbl, which accounted for about 2% of total global reserves, BP found.
Overall global energy consumption growth last year declined to 1.8% from 2.4% in 2011. "This was partly as a result of the economic slowdown, but also because individuals and businesses responded to high prices by becoming more efficient in their use of energy," said chief economist Christoph Ruhl said. The emerging economies "firmly established themselves as the source of what demand growth was seen, with China and India alone accounting for nearly 90% of the increase. Just 20 years ago, the emerging economies accounted for only 42% of global consumption; now that figure is 56%."
Last year, Ruhl noted, "was yet another year of adaptation to a changing energy landscape." As emerging economies "industrialize, they unlock ever more resources." The data indicate that the industrializing part of the world outpaces the already industrialized countries in terms of proved reserves growth, but "also contributes its fair share to energy production."