IEEJ： June 2014

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Special Bulletin
A Japanese Perspective on the International Energy Landscape (177)June 27, 20142013 World Energy Situation as Indicated by BP Statistical Review
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn June 16, the BP Statistical Review of World Energy 2014 was released at the venue for the21st World Petroleum Congress in Moscow. As explained in two of my past reports (Nos. 94 and135), the BP Statistical Review is one of the most representative annual statistics on internationalenergy supply and demand, covering the latest data comprehensively. The following reaffirms thefeatures of the 2013 international energy market based on the BP Statistical Review.
Firstly, primary energy consumption in the world continued firm growth in 2013. Primaryworld energy demand in the year increased by 2.3% from the previous year to 12.73 billion tons ofoil equivalent. The demand expanded for the fourth straight year, after declining in 2009 due to a
global recession under the impact of the Lehman Shock. Energy demand growth in 2013 came to
1.2% for the members of the Organization for Economic Cooperation and Development (OECD) and3.1% for non-OECD countries, indicating that non-OECD countries drove the global growth. OECDcountries accounted for 43.5% of global energy demand, against 56.5% for non-OECD countries in
2013. The center of global energy demand has shifted to non-OECD countries. Since the non-OECD
share exceeded the OECD share in 2008 for the first time, the gap between them has continuedexpanding.
In an interesting phenomenon, however, OECD demand in 2013 turned upward after continuing
to decrease for the previous two years. The OECD demand growth was led by a robust increase of2.9% in the United States compared to the previous year. Energy demand continued falling in theEuropean Union and Japan. The U.S. energy demand growth owed to an economic recovery andindicated economic effects of the shale revolution. Particularly, the United States scored the world’s
fastest demand growth for oil that accounted for the largest share (33%) of global energy demand.
While oil demand in 2013 posted a steady increase of 1.4 million barrels per day from the previousyear, the United States logged the fastest growth of 400,000 bpd, followed by 390,000 bpd for Chinaand 170,000 bpd for Brazil. The United States thus outstripped China in oil demand growth. The
presence of the United States in the global energy market has recovered due not only to the shale
revolution in supply side but also to oil demand growth.
Meanwhile, non-OECD countries including Asian developing nations saw slightly slower
energy demand growth in 2013 than in earlier years. Their energy demand growth in 2013, as given
above, was slower than the average for the past decade and in the previous two years (2011 and2012). This is because emerging countries such as China and India decelerated their economic
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growth. While their energy demand growth was still higher than OECD demand growth, the growth
gap between OECD and non-OECD countries narrowed substantially in 2013. This trend is common
to all energy sources. Symbolically, natural gas demand growth in non-OECD countries was limited
to 1.1%, slower than 1.8% for OECD countries. The OECD demand growth owed primarily to therobust growth of 2.4% in the United States. Attracting attention is whether the combination of therobust U.S. energy demand expansion and the slower non-OECD demand growth would continue orwhether non-OECD countries would become a key driver of global energy demand growth again.
The United States expanded not only energy demand. Under the ongoing shale revolution, its
gas and oil production increased steadily. Particularly, oil output in 2013 posted a sharp increase of
1.11 million bpd. The growth was the largest in the world, indicating that the United States drove
global oil production growth. The oil output expansion was remarkable in the history of U.S. oilproduction, standing at the highest level since 1965, the year from which the data set of the BP
Statistical Review starts. Oil production by Iran, Syria, Libya, Nigeria and other major oil producing
countries in the Middle East and Africa in 2013 declined by a total of about 1 million bpd due toeconomic sanctions, security deterioration or conflicts. Crude oil prices remained high above $100
per barrel in 2013. Nominally, the sharp U.S. oil expansion offset the impact of the above mentioned
supply disruptions. If U.S. output growth were slower, the international oil supply-demand balance
could have become tighter to put upward pressure on crude oil prices.
Among energy sources, renewable energy posted the largest consumption expansion in 2013 interms of growth percentages, at 16%, followed by hydro and coal. In terms of volume, however, coallogged the largest consumption increase, accounting for 100 million tons of oil equivalent or morethan 40% of the total primary energy consumption expansion at 247 Mtoe in 2013. China and India
scored the largest coal consumption growth rates. Interestingly, the United States followed them incoal consumption growth. Under the robust increase in coal consumption, global carbon dioxide
emissions in 2013 increased 2.1% from the previous year to 35.09 billion tons.
Natural gas consumption growth in 2013 stood at 1.4%, slipping below the total energy
consumption growth. Natural gas consumption trends by country or region were mixed. China
posted the largest expansion of 15.3 billion cubic meters or 10.8% from the previous year, followedby 14.2 bcm or 2.4% for the United States. In contrast, the EU logged a decrease of 6 bcm or 1.1%.
EU gas demand thus declined for the fourth straight year, indicating that the EU was isolated fromthe “Golden Age of Gas.” In gas production in 2013, Russia recorded the largest increase of 12.4
bcm or 2.4% from the previous year as exports via pipeline to Europe recovered thanks to priceadjustment to recover the competitiveness of Russian gas. Russia’s gas production volume totaled
604.8 bcm, the second largest in the world following 687.6 bcm for the United States. China
recorded the second largest gas output growth of 9.9 bcm or 9.5%, followed by 6.3 bcm or 1.3% for
the United States.
As gas consumption grew moderately, international gas trade in 2013 posted a moderateincrease of 15.1 bcm from the previous year to 1,035 bcm. Pipeline gas trade accounted for 14 bcmof the increase against 1.1 bcm for liquefied natural gas (LNG) trade. LNG trade thus remained
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almost unchanged. In pipeline gas trade, Russia scored a substantial increase of 17.1 bcm in exports
to 211.3 bcm, enhancing its position as the largest gas exporter in the world. Asian LNG imports in2013 expanded by 13.5 bcm to 238.1 bcm, while European imports dropped by 16.8 bcm to 51.5bcm. Asia’s share of LNG imports rose to 73% against Europe’s 16%, indicating that the Asian shareand importance in LNG trade increased further.

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