IEEJ：July 2017○ｃIEEJ 2017
Special Bulletin
A Japanese Perspective on the International Energy Landscape (330)

July 4, 2017

Global Energy Situation in 2016 Indicated by BP Statistics
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanAt Conrad Tokyo Hotel in Tokyo on July 4, international oil company BP PLC held apresentation meeting on the global energy situation based on its BP Statistical Review of World
Energy 2017. The annual BP statistics were released on June 13. Following the annual release, BPopens presentation meetings at various sites in the world. The Conrad Tokyo Hotel meeting was oneof such gatherings. As noted in five past editions of this report (Nos. 94, 135, 177, 224 and 276), theBP statistics are one of the most representative annual international energy supply and demandstatistics. Energy stakeholders in the world refer to the BP statistics known for comprehensive
coverage of the latest data. In the following, I would like to review the 2016 international energy
situation based on the data.
First, primary energy consumption in the world in 2016 totaled 13.28 billion tons of oil
equivalent, with annual growth limited to 1.0%. The low annual growth around 1.0% continued forthree years from 2014. As global gross domestic product grew at an annual rate of around 3% from2014, energy consumption’s GDP elasticity was limited to around 0.3. Global economic growth has
thus failed to have any direct impact on energy consumption expansion. The members of theOrganization for Economic Cooperation and Development scored an energy consumption increase of0.2%, far slower than a 1.7% rise for non-OECD countries. Particularly, Asia Pacific energy
consumption logged a high growth rate of 2.1%, with the region accounting for 77% of the globalgrowth. The Asia Pacific growth was driven by China, India and the Association of Southeast AsianNations, indicating that the gravity center of global energy consumption continued a shift to Asia in2016.
Second, coal consumption in 2016 declined by 1.7% from the previous year to 3.73 billion
TOE for the second straight year of fall. Coal alone posted a consumption drop while all otherenergy sources scored small or steady growth. By country, China and the United States recorded
remarkable falls in coal consumption, leading to the global decline. Among other fossil fuels, oil andnatural gas posted the respective steady growth rates of 1.6% and 1.5%. Meanwhile, non-fossil
energy sources logged robust consumption growth rates including 1.3% for nuclear, 2.8% for hydroand 14.1% for non-hydro renewable energy. As a result, non-fossil energy’s share of total primaryenergy consumption rose from 14.0% in 2015 to 14.5% in 2016. The low primary energy
consumption growth was combined with the non-fossil energy consumption’s increased share tolimit global energy-related carbon dioxide emission growth to only 0.1%. CO2 emissions totaled
33.43 billion tons.
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The 2016 energy situation had various national or regional characteristics. The UnitedStates, though being the world’s second largest energy consumer after China, remained the largest
consumer of oil and natural gas that are the most important for international energy trade. TheUnited States was also the largest oil and natural gas producer in the world. After substantial oil
production growth under the shale revolution, the United States reduced oil production in 2016 by3.2% from the previous year to 12.354 million barrels per day, close to 12.349 million bpd for Saudi
Arabia, the second largest oil producer. U.S. natural gas production in 2016 decreased by 2.5% to749.2 billion cubic meters, representing the first drop since 2005 (oil production decreased for the
first time since 2008). Coal consumption in the United States recorded a substantial fall of 8.8%,
while all other energy consumption in that country expanded.
The European Union continued small primary energy consumption growth in 2015 and2016 after four years of decline from 2010. An apparent factor behind energy consumption growth is
the acceleration of annual GDP growth to around 2% in 2015 and 2016. While coal reduced its shareof EU primary energy consumption in 2016 by 1.5 percentage points to 14.5%, oil and natural gas
raised their respective shares by 0.4 and 1.4 points. While the share fell slightly for nuclear andremained almost unchanged for renewable energy including hydro, consumption shifted from coal tonatural gas. Whether natural gas consumption and its share of total energy consumption will sustaintheir expansion is worthy of attention.
In China, the largest energy consumer in the world, primary energy consumption increasedby 1.3% to 3.05 billion TOE. Its share of global primary energy consumption came to 23%,widening its excess over the U.S. share that stood at 17%. After growing by 5-6% annually between
2008 and 2013, Chinese energy consumption growth decelerated to the 1-2% range from 2015 underthe “New Normal” economy. However, Chinese energy consumption growth at 47 million TOE in2016 accounted for 27% of global growth, indicating that the Chinese energy consumption trend
continued to exert great influences on the entire world. Remarkably, coal, which accounts for morethan 60% of Chinese energy consumption, logged a 1.6% consumption decline. Chinese coalconsumption declined for the third straight year after 2013. Other energy sources scoredconsumption growth. Renewable energy consumption scored substantial growth. As a result, thelargest CO2 emitter in the world reduced emissions by 0.7% to 9.12 billion tons.
Among major energy producing regions, the Middle East expanded both oil and naturalgas production in 2016. Oil output in the region in the year rose by 1.72 million bpd or 5.7% fromthe previous year to 31.79 million bpd. Iran scored the largest production increase of 700,000 bpd
due primarily to Western countries’ lifting of economic sanctions under a nuclear agreement. The
Iranian production expansion was followed by 430,000 bpd in Iraq and 360,000 bpd in Saudi Arabia.
The three countries alone accounted for 87% of the overall increase in the Middle East. The region’s
natural gas production rose by 3.3% to 637.8 billion cubic meters, exceeding Russian output. TheMiddle East was the second largest natural gas producer after the United States. Liquefied naturalgas exports from the Middle East totaled 122.5 billion cubic meters, capturing 35% of the global
total. The region thus remained the largest LNG exporter.
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Despite low oil prices, Russian oil production in 2016 rose by 2.2% to 11.23 million bpd.
The third largest oil producer after the United States and Saudi Arabia expanded oil production forthe eighth straight year. Russian natural production in the year slightly increased to 579.4 billion
cubic meters. Russia expanded natural gas exports through pipelines (mainly to Europe) by 11.7
billion cubic meters to 190.8 billion cubic meters, retaining its position as the largest natural gas
exporter.
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