Released July 09, 2021 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The COVID-19 pandemic drove down global energy use 4.5% in 2020, which caused carbon dioxide (CO2) emissions to fall 6.3% during that year, according to BP's 70th annual Statistical Review of World Energy, released July 8. The declines in energy use and CO2 emissions were both records for the post-World War 2 period. The national lockdowns sharply cut into transportation fuel use in 2020, and BP said about 75% of the reductions in energy use and CO2 emissions came from reduced use of hydrocarbon-based transportation fuels.
Last year saw an "unprecedented collapse in oil demand, as the imposition of lockdowns around the world decimated transport-related demand," BP Chief Executive Officer Bernard Looney said in his introduction to the report. But to underscore the magnitude of the challenge as the world seeks to reduce global temperature gain, Looney added, "Although unmatched in modern peacetime, the rate of decline in carbon emissions last year is similar to what the world needs to average each year for the next 30 years to be on track to meet the aims of the Paris Agreement."
Both Looney and Chief Economist Spencer Dale emphasized the human suffering caused by the COVID-19 pandemic, which has killed at least four million people, and possibly more, around the world. The recent worldwide surge in infections tied to variants of the coronavirus is another sign that, despite fervent wishes, the world has not yet left the coronavirus behind.
Draconian travel restrictions in the early months of the pandemic caused global oil demand to plummet, which in turn contributed to an immediate cut in global production of about 20%, or nearly 20 million barrels per day (BBL/d), during the spring of 2020. The gradual loosening of those restrictions in the second half of the year pushed up demand. By the end of 2020, global oil production was about 6.6 million BBL/d day below 2019 levels, the report said. Demand, meanwhile, fell about 9.3%, or about 9.1 million BBL/d.
In the U.S., oil consumption fell more than 2 million BBL/d in 2020, to an average of 17.2 million BBL/d from approximately 19.5 million BBL/d in 2019.
The drop in global oil demand last year was "far bigger than anything seen in history and far bigger than the falls in the other (energy) demand components," said Dale. "Indeed, the fall in oil demand accounts for around three-quarters of the total decline in (worldwide) energy consumption (in 2020). It's also the key factor accounting for the near-record fall in the carbon intensity of the energy mix."
Reduced consumption in 2020 helped increase the lifespan of oil reserves in several regions, including the Middle East and Central & South America, as measured by the reserve-to-production (R/P) ratio. For the U.S., however, there was only a small impact on the R/P ratio. Overall, the world has more than 55 years of production left at current rates.
Click on the image at right to see how declining oil production in 2020 increased the reserve-to-production ratio.
Global proved reserves of oil ballooned to slightly more than 1.7 trillion barrels at yearend 2020, up from 1.6 trillion barrels in 2010 and 1.3 trillion barrels in 2020, the BP report said. As of December 31, 2020, nearly half of proved oil reserves were in the Middle East, followed by Central and South America (18.7%) and North America (14%).
Click on the image at right to see global proved oil reserves for 2020, 2010 and 2000, and in which regions those reserves lie.
The Statistical Review looked at changes in regional production and consumption of oil over the last 25 years. What stands out is the dramatic rise in demand from the Asia Pacific region and the increase in production in North America and the Middle East.
Click on the image at right to see how regional oil production and consumption has changed during the last 25 years.
The dramatic reduction in global oil demand in 2020 hammered refining margins, the BP report showed. Although margins fell for processing U.S. Gulf Coast medium sour crude oil, they fared better there than in two other regions: Singapore and Northwestern Europe. Margins in Singapore spent all of 2020 in the negative.
Click on the image at right to see refining margins for three regions since 2010.
Lowered demand for transportation fuel also took its toll on refinery utilization last year, the Statistical Review said. Refineries in Africa and Central and South America were hardest hit, with utilizations falling to roughly 55% in 2020. Refinery utilization was only slightly better in Europe, which posted a rate of about 72% last year. Refineries in the Asia Pacific, which tend to be newer and more efficient than the ones in Europe and North America, posted a utilization rate of about 80% in 2020. Thinning margins and reduced utilization have caused some refineries in Europe and North America either to close or begin converting their units to produce renewable transportation fuels from biomass and other non-hydrocarbon feedstocks.
Click on the image at right to see refinery utilization since 2010, by region.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Last year saw an "unprecedented collapse in oil demand, as the imposition of lockdowns around the world decimated transport-related demand," BP Chief Executive Officer Bernard Looney said in his introduction to the report. But to underscore the magnitude of the challenge as the world seeks to reduce global temperature gain, Looney added, "Although unmatched in modern peacetime, the rate of decline in carbon emissions last year is similar to what the world needs to average each year for the next 30 years to be on track to meet the aims of the Paris Agreement."
Both Looney and Chief Economist Spencer Dale emphasized the human suffering caused by the COVID-19 pandemic, which has killed at least four million people, and possibly more, around the world. The recent worldwide surge in infections tied to variants of the coronavirus is another sign that, despite fervent wishes, the world has not yet left the coronavirus behind.
Draconian travel restrictions in the early months of the pandemic caused global oil demand to plummet, which in turn contributed to an immediate cut in global production of about 20%, or nearly 20 million barrels per day (BBL/d), during the spring of 2020. The gradual loosening of those restrictions in the second half of the year pushed up demand. By the end of 2020, global oil production was about 6.6 million BBL/d day below 2019 levels, the report said. Demand, meanwhile, fell about 9.3%, or about 9.1 million BBL/d.
In the U.S., oil consumption fell more than 2 million BBL/d in 2020, to an average of 17.2 million BBL/d from approximately 19.5 million BBL/d in 2019.
The drop in global oil demand last year was "far bigger than anything seen in history and far bigger than the falls in the other (energy) demand components," said Dale. "Indeed, the fall in oil demand accounts for around three-quarters of the total decline in (worldwide) energy consumption (in 2020). It's also the key factor accounting for the near-record fall in the carbon intensity of the energy mix."
Reduced consumption in 2020 helped increase the lifespan of oil reserves in several regions, including the Middle East and Central & South America, as measured by the reserve-to-production (R/P) ratio. For the U.S., however, there was only a small impact on the R/P ratio. Overall, the world has more than 55 years of production left at current rates.
Global proved reserves of oil ballooned to slightly more than 1.7 trillion barrels at yearend 2020, up from 1.6 trillion barrels in 2010 and 1.3 trillion barrels in 2020, the BP report said. As of December 31, 2020, nearly half of proved oil reserves were in the Middle East, followed by Central and South America (18.7%) and North America (14%).
The Statistical Review looked at changes in regional production and consumption of oil over the last 25 years. What stands out is the dramatic rise in demand from the Asia Pacific region and the increase in production in North America and the Middle East.
The dramatic reduction in global oil demand in 2020 hammered refining margins, the BP report showed. Although margins fell for processing U.S. Gulf Coast medium sour crude oil, they fared better there than in two other regions: Singapore and Northwestern Europe. Margins in Singapore spent all of 2020 in the negative.
Lowered demand for transportation fuel also took its toll on refinery utilization last year, the Statistical Review said. Refineries in Africa and Central and South America were hardest hit, with utilizations falling to roughly 55% in 2020. Refinery utilization was only slightly better in Europe, which posted a rate of about 72% last year. Refineries in the Asia Pacific, which tend to be newer and more efficient than the ones in Europe and North America, posted a utilization rate of about 80% in 2020. Thinning margins and reduced utilization have caused some refineries in Europe and North America either to close or begin converting their units to produce renewable transportation fuels from biomass and other non-hydrocarbon feedstocks.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
