1 Group chief executive’s introduction
2 2008 in review
18 Refi ning
20 Trade movements
22 Natural gas
30 Trade movements
36 Nuclear energy
40 Primary energy
41 Consumption by fuel
43 R/P ratios
44 Approximate conversion factors
45 More information
Group chief executive’s introduction
Energy in 2008 followed the economic headlines
Tony Hayward Group Chief Executive
Welcome to the 2009 edition of the BP Statistical Review of World Energy.
2008 was a year of truly unprecedented developments, for the world economy and in energy markets. Prices for all forms of traded energy rose steeply, some reaching record highs, and then fell dramatically. Producers and consumers alike are wondering where global energy markets are headed, and how to manage the myriad issues around energy, including price volatility, security and climate change.
In challenging times such as these, clear and objective perspectives are needed, and this is what BP’s Statistical Review has offered for 58 years. I hope you will fi nd this Review to be a useful source of information on today’s energy situation . and a source of insight in thinking about tomorrow’s.
As ever, the world economy is the key driver of energy consumption. It is easy to forget that until the middle of 2008, the economy continued to grow. In retrospect, last year represented the end of one of the strongest periods of economic growth ever recorded. However, the economy had already started to slow, most likely not unrelated to the high price of energy, and the fi nancial crisis in September then triggered a sharp recession . with critical implications for global energy consumption.
Energy prices followed these economic headlines, making for a year of very different parts. Oil prices increased steadily early in the year, exceeding $140 per barrel in early July . a record even on an infl ation-adjusted basis. But then prices collapsed, falling by more than 70% by the end of the year. Market prices for natural gas and coal followed similar trajectories. Over the whole of 2008, average prices for all forms of primary energy increased signifi cantly, with annual oil prices rising for a seventh consecutive year, a fi rst in the nearly 150-year history of the oil industry.
Primary energy consumption growth slowed in 2008, as did growth for each of the fossil fuels. All the net growth in energy consumption came from the rapidly industrializing non-OECD economies, with China alone accounting for nearly three-quarters of global growth. For the fi rst time, non-OECD energy consumption surpassed OECD consumption. For a sixth consecutive year, coal was the fastest-growing fuel - with obvious implications for global CO2 emissions.
The use of renewable fuels again rose rapidly, often benefi tting from government support. Although renewable energy continues to play only a small role in the world’s energy mix, the share is rising rapidly in some countries and there are the beginnings of a material impact. Data on renewable energy . ethanol production as well as wind, solar and geothermal power generation capacity . may be found at www.bp.com/statisticalreview.
In 2008 the world was no longer supply-constrained, as production growth exceeded that of consumption for all fossil fuels, particularly later in the year. Expanded OPEC production drove increases in world oil supply, even as consumption declined. The cost-effective development of unconventional gas, enabled by technological innovation, drove the largest-ever increase in US natural gas supply, and for coal, strong growth in China was once again a key driver. Seen in this context, fundamental market forces help to explain the downward pressure seen on energy prices later in the year.
Our data confi rms that the world has enough proved reserves of oil, natural gas and coal to meet the world’s needs for decades to come. The challenges the world faces in growing supplies to meet future demand are not below ground, they are above ground. They are human, not geological.
I would like to thank all those around the world who have been involved in preparing this Review - in particular our government contacts in many countries who helped to compile the data