The Three Seismic Shifts That Are Shaking Up the World of Energy

There's no denying the huge changes that are underway

BP Plc released its yearly Statistical Review of World Energy on Wednesday. Used for decades as an industry benchmark, this year's edition laid bare the seismic shifts taking place in global energy markets.

1) The rise and rise of U.S. oil production 

The rise in U.S. crude output has simply been explosive. America added 1.6 million barrels a day in 2014, taking production past its previous peak in 1970. It also made the U.S. the world's largest crude producer, knocking Saudi Arabia off its perch.

While there are signs shale production will fall back slightly this year because of the slump in oil prices it's marginal compared with the longer-term trend. Energy independence is getting closer: U.S. energy production met almost 90 percent of consumption last year, the most since the Reagan administration. 

Source: BP

2) China's energy slowdown

China -- the motor of global energy demand since the turn of the century -- is trying to change course. A slowing economy and shift away from heavy industry meant 2014 saw energy consumption grow just 2.6 percent, less than half its recent average and the smallest increase since the Asian crisis of 1998. The country's energy intensity -- the amount of fuel it needs to consume to generate each dollar of GDP -- is getting closer to U.S. and European levels.

If, and BP says it's quite a big if, China keeps a lid on new steel mills and cement factories, it'll have a big impact on global demand in the years ahead. 

Source: BP

3) The global solar boom

Renewable energy is now a force to be reckoned with. Last year non-fossil fuels, including nuclear, accounted for more of the increase in global energy consumption than oil, gas and coal combined. Particularly notable are record installations of solar panels.

The combination of slower energy demand growth and more renewable power meant global emissions expanded just 0.5 percent in 2014, the slowest pace since the financial crisis. increasing just 0.5 percent. 

Source: BP

 

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