39
Energy in 2016: short-run adjustments and long-run transition Spencer Dale, group chief economist bp.com/statisticalreview #BPstats © BP p.I.c.2017
Energy in 2016: short-run adjustments and long-run transition
Spencer Dale, group chief economist
bp.com/statisticalreview #BPstats © BP p.I.c.2017
© BP p.l.c. 2017
BP Statistical Review of World Energy
Primary energy and energy intensity
Annual change, %
-4%
-2%
0%
2%
4%
6%
8%
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016
Primary energy Energy intensity
5-year average
2
© BP p.l.c. 2017
BP Statistical Review of World Energy
Energy consumption growth
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
1985-95 1995-05 2005-15 2016
Other
India
China
OECD
Contributions to annual growth, %
3
© BP p.l.c. 2017
BP Statistical Review of World Energy
0%
10%
20%
30%
40%
50%
1965 1982 1999 2016
Oil
Gas
Coal
Nuclear
Hydro
Renew.
Fuel mix: growth and shares in primary energy
Annual change, Mtoe
Growth by fuel Shares of primary energy consumption
-250
-200
-150
-100
-50
0
50
100
150
200
250
Consumption Production
Oil
Gas
Coal
Nuclear
Hydro
Renew.
Total
4
© BP p.l.c. 2017
BP Statistical Review of World Energy
Oil
© BP p.l.c. 2017
BP Statistical Review of World Energy
Oil market in 2015 and 2016
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
10-year average 2015 2016 10-year average 2015 2016
Consumption Production
Annual change, Mb/d
Exporters
Importers
OPEC
Non-OPEC
Total
6
© BP p.l.c. 2017
BP Statistical Review of World Energy Source: includes data from the International Energy Agency © OECD/IEA 2017
Oil market: balance and inventories
Oil production and consumption
Mb/d
90
91
92
93
94
95
96
97
98
99
4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16
Consumption
Production
2016
7
© BP p.l.c. 2017
BP Statistical Review of World Energy
2400
2500
2600
2700
2800
2900
3000
3100
3200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011-15 range
2011-15 average
OECD commercial inventories
Source: includes data from the International Energy Agency © OECD/IEA 2017
2017
2016
Oil market: balance and inventories
Oil production and consumption
Mb/d
90
91
92
93
94
95
96
97
98
99
4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16
Consumption
Production
Mbbls
2016
8
© BP p.l.c. 2017
BP Statistical Review of World Energy
US Tight Oil
© BP p.l.c. 2017
BP Statistical Review of World Energy
US tight oil rigs
Change in US tight oil rig count
Monthly change in rig count
-250
-200
-150
-100
-50
0
50
янв.14 янв.15 янв.16 янв.17
Prices start to rise
Prices start to fall
Source: includes data from US Energy Information Administration 10
© BP p.l.c. 2017
BP Statistical Review of World Energy
11
© BP p.l.c. 2017
BP Statistical Review of World Energy
OPEC
© BP p.l.c. 2017
BP Statistical Review of World Energy
“OPEC remains an important catalyst to the stability and sustainability of the market… but history has also demonstrated that intervention in response to structural shifts is largely ineffective… that’s why Saudi Arabia does not support OPEC intervening to alleviate the impacts of long-term structural imbalances, as opposed to addressing short-term aberrations….” HE Khalid Al-Falih
Minister of Energy, Industry and Mineral Resources, Saudi Arabia
CERAWeek, March 2017
13
© BP p.l.c. 2017
BP Statistical Review of World Energy
Coal
© BP p.l.c. 2017
BP Statistical Review of World Energy
-10%
-5%
0%
5%
10%
15%
20%
1986 1991 1996 2001 2006 2011 2016
Chinese coal production and prices
16.3%
Annual change, %
Coal production growth
$/tonne
Steam coal prices
40
60
80
100
120
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Qinhuangdao, China
Source: includes data from IHS McCloskey 15
© BP p.l.c. 2017
BP Statistical Review of World Energy
-10%
-5%
0%
5%
10%
15%
20%
1986 1991 1996 2001 2006 2011 2016
Chinese coal production and global prices
16.3%
Annual change, %
Steam coal prices Coal production growth
$/tonne
40
60
80
100
120
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Qinhuangdao, China
Newcastle, Australia
Japan
Northwest Europe
US East Coast
Source: includes data from IHS McCloskey 16
© BP p.l.c. 2017
BP Statistical Review of World Energy
UK coal
16.3%
0
50
100
150
200
1800 1850 1900 1950 2000
Mtoe Production
Consumption
Source: includes data from the UK Department for Business, Energy & Industrial
Strategy
17
© BP p.l.c. 2017
BP Statistical Review of World Energy
UK coal
16.3%
0
50
100
150
200
1800 1850 1900 1950 2000
Mtoe Production
Consumption
1804: Richard
Trevithick builds
first tracked
steam
locomotive
1882: World’s first
centralized coal-
fired power station
opens in Holborn
1921 / 1926:
Miners’ strike and
general strike
1968: conversion of
town gas to natural
gas begins
1947: Coal
industry
nationalized 1956: Clean Air Act
passed in response to
London smog
1984: Miners’ strike
1991: ‘Dash for gas’
2016: Last deep
coal mine closes
Source: includes data from the UK Department for Business, Energy & Industrial
Strategy
18
© BP p.l.c. 2017
BP Statistical Review of World Energy
Natural gas
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BP Statistical Review of World Energy
Growth in natural gas demand and supply
16.3%
Gas consumption
-0,5%
0,5%
1,5%
2,5%
10-year average 2015 2016
Rest
of
world
US
-0,5%
0,5%
1,5%
2,5%
10-year average 2015 2016
Gas production
Annual change, % Annual change, %
20
© BP p.l.c. 2017
BP Statistical Review of World Energy
LNG trade
Annual change, Bcm Annual change, Bcm
Imports Exports
0
5
10
15
20
25
2010-15 2016
Other
Australia
0
5
10
15
20
25
2010-15 2016
Other
New markets*
* Includes Egypt, Pakistan, Poland, Jordan, Jamaica, Colombia and Lithuania
21
© BP p.l.c. 2017
BP Statistical Review of World Energy
LNG market characteristics
16.3%
Contract length
0%
25%
50%
75%
100%
2006 2016
Source: IHS, PIRA
Contract size
0%
25%
50%
75%
100%
2006 2016
Flexible supply*
10%
20%
30%
40%
2006 2011 2016
Share of total Share of total Share of total
>10 years
<10 years
>2 Bcm
<2 Bcm
*includes spot supply and supplies without fixed destination in the contract 22
© BP p.l.c. 2017
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European gas imports
-40
-20
0
20
40
2012 2013 2014 2015 2016
Russia Other pipeline LNG TotalAnnual change, Bcm
US
Other
23
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BP Statistical Review of World Energy
Renewables
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BP Statistical Review of World Energy
14.1%
0
50
100
150
200
250
2010-15 2016
Other
Japan
US
China
EU
Growth and diffusion of renewables
Growth by country
Annual change, TWh
25
© BP p.l.c. 2017
BP Statistical Review of World Energy
14.1%
0%
20%
40%
60%
80%
1965 1982 1999 2016
Wind
Solar
Nuclear
Growth and diffusion of renewables
Growth by country Diffusion of power technologies
Annual change, TWh Share of countries*
* The proportion of the 67 countries that are individually listed in the Statistical Review with power generation of at least 50 GWh from the specified technology
0
50
100
150
200
250
2010-15 2016
Other
Japan
US
China
EU
© BP p.l.c. 2017
BP Statistical Review of World Energy
Carbon emissions
© BP p.l.c. 2017
BP Statistical Review of World Energy
Growth in carbon emissions
-4%
-2%
0%
2%
4%
6%
8%
2000 2004 2008 2012 2016
Carbon intensity of GDP GDP CO2
Annual change, %
Growth in GDP and carbon emissions
CO₂
GDP
28
© BP p.l.c. 2017
BP Statistical Review of World Energy
Growth in carbon emissions
-4%
-2%
0%
2%
4%
6%
8%
2000 2004 2008 2012 2016
Fuel mix Energy intensity
Annual change, %
CO₂
GDP
Growth in GDP and carbon emissions
29
© BP p.l.c. 2017
BP Statistical Review of World Energy
Changes in growth in carbon emissions
Annual change, %
Factors slowing growth in CO₂
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
20162003-13
China
Rest of world
2013-16
30
© BP p.l.c. 2017
BP Statistical Review of World Energy
China industrial output and energy demand
Outputs of iron, steel and cement
-4%
0%
4%
8%
12%
16%
Iron Crude steel Cement
2004-14 2014-16
Annual change, %
Source: Includes data from the National Bureau of Statistics of China 31
© BP p.l.c. 2017
BP Statistical Review of World Energy
China industrial output and energy demand
16.3%
Contributions to energy demand growth Outputs of iron, steel and cement
-4%
0%
4%
8%
12%
16%
Iron Crude steel Cement
2004-14 2014-16
Annual change, %
-2%
0%
2%
4%
6%
8%
2004-14 2015
Iron, steel and cement
Other sectors
Annual change, %
Total
Source: Includes data from the National Bureau of Statistics of China 32
© BP p.l.c. 2017
BP Statistical Review of World Energy
Conclusions
Energy in 2016: short-run adjustments and long-run transition
• weak growth in energy demand and carbon emissions driven by both factors
• strong growth in oil demand as market adjusted to excess supplies
• rapid growth in renewables and further falls in coal driven by energy transition
33
Energy in 2016: short-run adjustments and long-run transition
Spencer Dale, group chief economist
bp.com/statisticalreview #BPstats © BP p.I.c.2017 34
© BP p.l.c. 2017
BP Statistical Review of World Energy
Backup slides
© BP p.l.c. 2017
BP Statistical Review of World Energy
Oil prices
Source: includes data from Platts
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Annual average
Dated Brent, $/bbl
36
© BP p.l.c. 2017
BP Statistical Review of World Energy
Power
© BP p.l.c. 2017
BP Statistical Review of World Energy
OECD GDP and electricity consumption
-4%
-2%
0%
2%
4%
6%
1990 1995 2000 2005 2010 2015
GDP Electricity
Annual change, %
38
© BP p.l.c. 2017
BP Statistical Review of World Energy
14.1%
0
100
200
300
400
500
600
700
2001-06 2006-11 2011-16
Other
Gas
Coal
Renewables
Growth of power generation by fuel
Annual change, TWh
39
