BP Starts Statistical Review of U.S. Energy Markets
BP released its "Statistical Review of World Energy 2001" last week showing natural gas once again as the fastest growing fuel in 2000, with global consumption rising by 4.8% -- the highest rate since 1996. However, the review also included for the first time a "Statistical Review of U.S. Energy." For the U.S., BP notes, last year was a period when energy markets were characterized by high prices, low inventories, increased capacity utilization, and increased dependence on net energy imports. U.S. energy consumption growth in 2000, at 2.3%, was somewhat above the 10-year average of 1.8%, but well above the rate of growth in production, at 0.5%.
Despite the recovery in production, there was a progressive tightening of the natural gas market during the year, the review notes. Consumption grew even faster (+4.6%) in response to general economic strength, the growing penetration of natural gas in power generation and colder winter weather, especially in November/December. Despite an increase in net imports of natural gas (+3%), working inventories in underground storage had to be drawn down to new 30-year lows by the end of the year to meet the demand surge. Having started the year below $2.50/MMBtu, spot natural gas prices at the Henry Hub soared to a peak of almost $10/MMBtu in late December. The average price for the year ($4.23/MMBtu) was almost double the average for 1999 ($2.27/MMBtu) and easily the highest for more than a decade.
In its worldwide review, BP found that gas demand increased in all regions of the world but grew especially fast in the Asia-Pacific region, where it increased by almost 8%. Chinese consumption was exceptionally strong, rising by 16%. The United States and Canada also outstripped the global average with a 5.1% rise. In the former Soviet Union, gas consumption increased for the second year running, rising by 2.9% and reversing a trend of near continuous decline since the early 1990s.
Globally, gas production increased by 4.1%. The biggest increases occurred in countries tapping into the even faster growing international trade in natural gas. Output grew by more than 50% in Nigeria and Oman as new LNG projects began building towards capacity. Production in Turkmenistan more than doubled as Russia pulled in additional Turkmenistan gas to compensate for declining domestic production.
Oil demand growth was weak in 2000 as high prices encouraged conservation and substitution into alternative fuels. Coal consumption increased for the first time since 1996. This demand growth weakness appears to have carried into 2001. With oil production from both OPEC and non-OPEC nations growing strongly, global oil production capacity appears to be growing faster than demand.
For both BP reviews, visit BP's web site at www.bp.com .
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