World Energy Demand fell in 1998
World energy demand fell by 0.1 per cent in 1998, the first fall since 1982.
The rapid growth in energy demand seen from the emerging market economies in previous years fell to just 0.4 percent and OECD consumption – almost 60 per cent of the total – stayed almost flat, according to the BP Amoco Statistical Review of World Energy 1999, published today.
Energy demand from the Asian economies was hit by their economic downturn, declining by 1.5 percent overall, with falls of more than 6 percent seen in South Korea and Thailand, and additional declines in both Indonesia and Japan.
The year also saw exceptional change in China’s energy market, with demand sliding by 3.2 percent – equivalent to a 0.3 percent global drop – despite an increasing gross domestic product. This may suggest structural changes in the Chinese market towards lower energy intensity and a move away from coal, says the report.
Demand from the Former Soviet Union (FSU) fell by only 0.3 percent. It appears the FSU has now completed the first phase of transition of its energy market and further large falls in demand of the scale seen earlier this decade are now unlikely. By 1998 demand from the former FSU had fallen 36 percent from its 1990 peak – a drop equivalent to 6 percent of current global demand.
Oil markets suffered severe disruption in 1998. The deep and prolonged falls in crude price resulted in an average price of $13.11, almost a third down on the price in 1997 and the lowest in real terms since before the first oil shock of 1973.
Oil demand was weak, growing by only 0.1 per cent – the lowest increase for five years and well below trend. Demand fell rapidly in Russia and Asia – with demand from the four Asian crisis economies combined falling by more than 11%. Warm winters also constrained demand growth in North America.
Oil production rose by 1.4 per cent. While non-OPEC production remained almost flat, OPEC production increased by 3.2 per cent, above 30 million barrels per day (bpd) for the first time since 1979. Essentially all the rise in OPEC production came from Iraq, where production under the UN ‘oil for food’ programme rose some 80 per cent to 2.2 million bpd.
Following the commissioning of 17 new fields, the UK’s oil production rose 3.6 per cent to a new high of 2.8 million bpd.
The world gas market was weak, with demand up just 1.3 per cent, well below the long term trend of 2 per cent growth. Despite the weak year, demand for gas is now higher in all regions than ten years ago, and the fuel remains the fastest growing fossil fuel and fuel of choice for incremental power generation.
The weak gas growth was largely due to a 3 per cent fall in gas demand from the USA, the world’s largest consumer, a consequence of warm weather and fuel switching to cheaper fuel oil. Increasing use of gas for power generation led to a 3.8 per cent rise in UK consumption.
Gas production rose by 2.2 per cent, with excess gas being stored. Gas production from Russia rose 3.5 per cent, making it once more the world’s largest gas producer.
A 6 per cent fall in production of coal in China, the world’s largest producer, contributed to the 2.4 per cent fall in global production. Weak demand from China (down 5.2 per cent), and Europe’s continuing move away from coal, were reflected in the 2.1 per cent fall in global consumption.
A 7.2 per cent rise in consumption of nuclear power in the USA contributed to a global rise of 1.6 per cent, more than offsetting the fall seen in 1997, but nuclear power demand appears to remain on the slowing trend established over the past decade. Use of hydroelectric power rose 1.1 per cent, rising for the sixth successive year.