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Oil share of global energy mix continues to retreat as renewables surge - BP

July 09/2020

MOSCOW (MRC) -- Oil's share of the global energy mix continued to slip last year, but remained the largest contributor to primary energy supply, as the role of natural gas and renewables rose to record highs, reported S&P Global with reference to BP's estimates.

Oil's dominance over world energy use slipped 0.2 percentage point to 33.1% in 2019, while the growth of natural gas and renewables saw their shares rise to 24.2% and 5%, respectively, BP's latest annual Statistical Review of World Energy showed.

Rising renewable power, mostly from solar and wind, accounted for over 40% of global energy growth last year, according to the data, after renewables posted a record increase in consumption in energy terms.

As a result, renewable energy, including biofuels, overtook nuclear which makes up 4.3% of the energy mix, the report found.

Natural gas consumption increased by 78 Bcm, or 2%, led by LNG exports from the US.

Oil's share of the global energy mix has been falling steadily over the past four decades after hitting a peak of 50% in 1973, according to BP's data.

Bar a brief recovery in the wake of the 2014 oil price crash, the slide accelerated in 1999 as oil was largely displaced by rising coal consumption as energy demand growth slowed.

But a more recent shift away from coal toward gas and renewables meant coal's share of primary energy fell to its lowest level in 16 years last year to 27%, according to BP.

Despite coal slipping consumption slipping last year, BP said coal was still the single largest source of power generation, accounting for over 36% of global power compared to 10% provided by renewable energy.

Overall, the report showed the world's primary energy consumption rose 1.3% in 2019, less than half the rate of the previous year.

China remained the dominant driver of global energy demand growth, accounting for more than three-quarters of the net global total, while the US and Germany posted the largest declines in energy terms.

Global oil consumption grew by a below-average 900,000 b/d, or 0.9%, in 2019 while demand for all liquid fuels, including biofuels, topped 100 million b/d for the first time, BP said.

Demand growth was still led by China, where demand rose by 680,000 b/d, the largest increase in the country's demand since 2015.

OECD oil demand fell 290,000 b/d, the first decrease since 2014, BP said.

On supply, BP noted that the US had the largest increase of any country for the third consecutive year, with its output rising by 1.7 million b/d, down from the record increase in 2018 of 2.2 million b/d.

The world's total proven reserves of oil slipped for the first time since 2015 by 0.1% to 1.733 trillion barrels last year, BP said, from 1.735 trillion barrels in 2018.

The change, which saw the original 2018 estimate revised upward from 1.73 trillion barrels, mostly reflects proved reserve reductions in Canada (900 million barrels), Brazil (700 million barrels), and Indonesia (700 million barrels).

The proven reserves total would be sufficient to meet 49.9 years of production at 2019 levels, BP said, down from 50 years in the previous year's review.

BP's proven reserves figures, based on official reporting from national authorities, can reflect average oil prices which affects the volumes of oil a country considers recoverable.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, BASF, Borealis, BP Plc, LyondellBasell, Sabic, Total Petrochemicals, Germany, China, Rossiya, USA.
Category:General News
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