U.S. Oil Production Rose at Record Pace on Shale, BP Review Says
U.S. oil production grew at the fastest pace since BP Plc (BP/) started keeping records in 1965 on unconventional sources such as shale and tight oil.
An increase in output of about 1 million barrels a day caused net oil imports to the U.S. to drop by 930,000 barrels a day and imports are now 36 percent below their 2005 peak, London-based BP said in its annual Statistical Review of World Energy today. The expansion of both oil and natural gas production in the U.S. was the fastest in the world last year.
The report highlights the potential scale of unconventional oil extraction, which involves fracturing underground rocks to tap resources that otherwise wouldn’t flow to the surface. These technological advances will limit the influence of OPEC as North American techniques are replicated in Russia, China and Brazil, Nansen Saleri, the former head of reservoir management at Saudi Arabian Oil Co., said yesterday.
“The data show there is ample energy available,” BP Chief Executive Officer Bob Dudley said in a statement. “Our challenge as an industry is to make the best choices about where to invest.”
Growth in global energy consumption slowed to 1.8 percent last year from 2.4 percent in 2011, BP said. China and India accounted for 90 percent of the increase in demand. Emerging economies now account for 56 percent of the world’s consumption, compared with 42 percent two decades ago.
World oil production increased 2.2 percent, or 1.9 million barrels a day, with three-quarters of the increase coming from the Organization of Petroleum Exporting Countries. Gas production grew 1.9 percent, while consumption of the fuel gained 2.2 percent. Trade in liquefied natural gas dropped 0.9 percent, the first decline on record.
Energy consumption in countries in the Organization for Economic Cooperation and Development, a group of advanced economies, fell by 1.2 percent, led by a 2.8 percent decline in the U.S. Consumption outside the OECD grew 4.2 percent, below the 10-year average of 5.3 percent.
“2012 was yet another year of adaptation to a changing energy landscape,” said Christof Ruehl, chief economist at BP. “As the non-OECD economies industrialize, they unlock ever more resources. The data tell us that the industrializing part of the world not only outpaces the OECD in terms of proved reserves growth, it also contributes its fair share to energy production.”
Even as increased use of gas in for power generation cut U.S consumption of coal, worldwide the fuel made up 30 percent of the world’s energy consumption, the highest proportion since 1970. China now burns the majority of the world’s coal for the first time, the report said.
Carbon dioxide emissions, the pollutant that contributes to climate change, increased at a slower pace than in 2011, helped by the shift in consumption away from coal and toward natural gas in the U.S., the report said. The U.S. reduced its carbon emissions to the lowest since 1994.
Nuclear output dropped by 6.9 percent last year. Japan accounted for 82 percent of the decline after the Fukushima disaster in 2011 prompted the shutdown of all but two of Japan’s 50 nuclear power stations. Nuclear made up 4.5 percent of global energy, the lowest share since 1984.
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