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Monday, June 21, 2010

BP Statistical Review Of World Energy 2010

Sonoma Potter reminded me that this report is due out, and lo and behold, it was published.

World oil consumption dropped 1.7% in 2009, which is the record since 1982. That is a measure of how severe the trade contraction was.

Natural gas consumption fell by 2.1%. That's the largest drop ever. Coal consumption was flat. Coal is overall the cheapest and the most used (as well as the most polluting). This gives an overall primary energy consumption drop of 1.1% for the world in 2009.

Every year I download the whole report in pdf format, but you can get just the oil portion in pdf. Either version is available in the oil box on this page. The oil segment is only 17 pages in pdf.

In this cycle, US oil consumption peaked at 20,802 THOUSAND (or 20,802,000) barrels per day in 2005, and dropped each year thereafter. In 2008 we used 19,498 THOUSAND bbd, and in 2009 18,686. I am expecting US consumption to rise at least 2.5% this year in total on a better economy for total consumption of in the range of 19150-19250 THOUSAND barrels per day.

China's oil usage last year increased 6.7%, although some of that was used to fill the strategic reserve. The US used about 21.7% of total world consumption, and China used about 10.4%.

Fun facts you probably did not know:
Regarding US trends:
Usually one can get a better estimate from the weekly reports by comparing cumulative totals, but I am currently confused. The old text format isn't available any more. Anyway, look at last week's report - cumulative YoY supply is negative in every category except other oils, but other oils have risen over 47% this year cumulatively, so total supply is up over 6%. Other oils include motor oils, industrial greases, etc, and also feed stock for plastics and chemicals. In the last few months, diesel consumption seems to have risen substantially, which is one reason I do not agree with the economic doomsters. But gasoline consumption (look at four week totals) is still down YoY, although diesel and other is taking up the slack.

Full US weekly petroleum reports are available by segment here. There is at this point an ethanol glut of impressive proportions and stocks of gasoline are very impressive. I believe gasoline consumption trends will continue to be flat to declining on demographics and fleet replacement. Net imports have been dropping:

More than half of US petroleum consumption is consumed for uses other than personal vehicle transport. Farms consume quite a bit, as does construction (less now than in recent years), mining, freight transport, mass transport, and air transport. Older data, but this shows some of the split:

Transport is by the far the largest sector by consumption. You can get an inkling of the transportation split here. While personal transport is not static, it is far persistent than industrial usage. You can see how much industrial usage has dropped over the last two recession years just by looking at the gasoline/diesel swing from 2004-2009. But in normal times, less than 50% is gasoline usage, and a considerable proportion of that is still production associated. Residual fuel oil is used mostly for ships.

I think one of the most fascinating questions over the next 50 years is whither the petroleum reserve/production ratio?

Obviously, it will increase; the question is why? Because "unconventional" sources become conventional, or because usage declines?
Neil - my guess is both. The demographics of the west, not to mention the relative prosperity which allows rapid adoption of innovation, implies petroleum use for personal transport has peaked.

The really interesting question is about Asia. What happens there?
When you back off and look at it, US GDP is technically at least 5 times China's, but we are using little more than twice as much oil to produce that income.

I think this is an unfair comparison, because oil usage for production and transport of goods is relatively higher in China. But still, think about it. They are in a trap.
Increasing CAFE standards are going to drive our oil consumption down over time. However, a quicker way to decrease oil usage would be to adopt half of the Boone Pickens plan. Start converting many of our bus and truck fleets to natural gas. Those trucks and buses that leave a parking lot in the morning and return in the evening (School buses, transit buses, utility fleets, local delivery fleets (Post office, UPS, etc.], and more could be refitted to run on natural gas. The gas refueling facility could be set up in the parking area, so they could refuel each night for the next day of travel. We have the natural gas and this would not require expensive infrastructure changes.

Hybrid cars have not been as big a success as it seemed they would a couple of years ago. The batteries are expensive and wear out quickly. They cost too much more than the conventional cars that are the competition. The depreciation is faster due to the short battery life.

It appears that hydrogen may well be the fuel of the future but the technology is not yet ready for prime time. Oil is going to be the primary fuel for transportation for the next 25-40 years. Our energy policy should recognize that and start developing our easy to reach petroleum reserves like ANWR and the Santa Barbara Channe.
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