World Energy Statistical Review: New Owners, Same Bleak Climate Outlook

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--For the last seven decades BP Plc (NYSE:BP) (London, England) has produced an annual global energy statistical review. This past February, that project was passed to The Energy Institute (EI) (London, England), a collaboration between management consultants KPMG (London, England) and Kearney (Chicago, Illinois). Although the report's ownership has changed hands, the message remains largely the same: We are losing the battle to reduce carbon dioxide (CO2) emissions and slow or reverse global climate change.

EI President Juliet Davenport commented: "Despite further strong growth in wind and solar in the power sector, overall global energy-related greenhouse gas emissions increased again. We are still heading in the opposite direction to that required by the Paris Agreement."

She continued: Last year the world experienced "some of the worst ever impacts of climate change, including the devastating floods affecting millions in Pakistan, the record heat events across Europe and North America," and the report's data on energy demand and supply did not offer encouraging news overall.

Around the world, fossil fuels continued to provide about 82% of primary energy in 2022, roughly the same as in 2021, according to the 72nd annual Statistical Review of World Energy, released Monday. Primary energy demand growth slowed in 2022, increasing 1.1%, compared to 5.5% in 2021. Primary energy use is about 3% above the 2019 pre-COVID level. Energy use increased in all regions apart from Europe (-3.8%) and the Commonwealth of Independent States (CIS) (-5.8%). And renewables' (excluding hydro) share of primary energy consumption reached 7.5%, an increase of nearly 1% over the previous year.

Despite a full-year 2022 average price of $101 per barrel for Brent, worldwide oil consumption continued to increase, rising by 2.9 million barrels per day (BBL/d) to 97.3 million barrels per day (BBL/d). Last year's gains were smaller than 2021's increase over 2020 use. Global consumption was about 0.7% under 2019's usage.

Global oil production rose 3.8 million BBL/d in 2022, with most of the gains coming from Saudi Arabia (an increase of 1.2 million BBL/d) and the U.S., which rose approximately 1.1 million BBL/d. Nigeria and Libya reported the largest declines, with each nation's production sinking about 180,000 BBL/d in 2022. Worldwide refining capacity rose a bit last year, by about 534,000 BBL/d, mainly driven by growth in non-Organization for Economic Cooperation and Development (OECD) countries.

Natural gas prices rose sharply in 2022, the EI report notes, with prices reaching records in Europe and Asia, and rising about 50% in the U.S. European prices (Title Transfer Facility [TTF]) nearly tripled, averaging $37 per million British thermal units (MMBtu) last year. Asian liquefied natural gas (LNG) prices doubled, to an average of $34 per MMBtu (Japan-Korea Marker [JKM]). In the U.S., Henry Hub prices averaged $6.50 per MMBtu, the highest annual average since 2008.

High gas prices shaved about 3% off global demand in 2022, the report said. Demand fell to just under 4 trillion cubic meters (approximately 141.3 trillion cubic feet [Tcf]) in 2022. Production remained constant.

LNG supply grew 5% last year, to 542 Bcm (or about 19.1 Tcf), a percentage gain similar to 2021. Supply gains came mostly from the U.S. (10 Bcm or 0.353 Tcf) and Asia-Pacific (8 Bcm or approximately 0.28 Tcf). European countries, reeling from the embargo of Russian energy, dramatically increased LNG imports while Asia and Latin America curbed their LNG imports.

A modest increase of less than 1% to global coal demand helped push up prices to record levels, said the Statistical Review of World Energy. Worldwide demand was the highest since 2014, the report added. In Europe, prices averaged $294/tonne in 2022, a 145% year-on-year increase, while the Japan cost, insurance and freight (CIF) spot price averaged $225/tonne, a 45% increase over 2021 prices. Demand growth was led by China and India; rising demand there more than offset declines in the U.S. and Europe.

Global coal production increased by more than 7% compared to 2021, reaching a record high of 175 exajoules. China, India and Indonesia accounted for over 95% of the year-over-year gain in global production.

Turning to worldwide electricity use, the report said worldwide electric generation increased by 2.3% in 2022, sharply lower than 2021's 6.2% year-over-year gain. Although renewables (excluding hydroelectricity) continue to notch impressive percentage gains, coal remained the dominant fuel for power generation in 2022, with a stable share around 35.4%, marginally down from 35.8% in 2021. Natural gas-fired power generation remained stable in 2022 with a share of around 23%. Wind and solar reached a record high of 12% share of power generation, once again surpassing nuclear energy.

But the 2022 Statistical Review of World Energy showed CO2 emissions from energy use, industrial processes, oil and gas flaring and methane emissions rose 0.8% in 2022, to a record of 39.3 gigatons of carbon dioxide equivalent (GtCO2e). Emissions from energy use rose nearly 1% while CO2 emissions from flaring decreased by 3.8% and emissions from methane and industrial processes decreased by 0.2%, the EI report said.

Simon Virley, vice chair and head of KPMG's energy and natural resources in the U.K., commented: "All aspects of the trilemma were put under severe strain in 2022. Despite record growth in renewables, the share of world energy still coming from fossil fuels remains stubbornly stuck at 82%, which should act as a clarion call for governments to inject more urgency into the energy transition."

Richard Forrest, Kearney's global sustainability lead partner and chair of the firm's Energy Transition Institute, said 2022 "was a turbulent year for the energy industry, with the Ukraine conflict and the tail end of the pandemic driving energy cost and security concerns to the top of the priority list in many regions. That global energy consumption increased 1.1% over the year, with a 0.8% increase in greenhouse gas emissions, reinforces the need for urgent action to get the world on track to meet the Paris targets. The need to drive the energy transition at pace to deliver clean, affordable and secure energy has never been greater."

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