The 2018 edition of BP Statistical Review of World Energy shows a strong growth in global consumption of natural gas. Renewables was the second largest source of global consumption growth according to the report.

"If there is one big message in this year's review, it's the opportunity to make real progress in reducing carbon emissions in the power sector,” said Bob Dudley, BP group chief executive, during a webcast announcing the findings. “There is a potential to make a huge difference if policymakers go after environmental rewards."

For the past 67 years, BP has been providing statistical data on the global energy market. This year, the company offered new data on the fuel mix within the power sector and on key materials, such as cobalt and lithium, which are playing an increasing role in the energy transition, according to Dudley.

Global Energy

Last year, global energy demand grew by 2.2%, rising above its 10-year average of 1.7%. Interestingly, despite the unusually strong growth in demand from OECD countries, 80% expansion in global energy consumption came from developing countries. China contributed more than a third of that growth, with energy consumption growing by more than 3%.

Last year proved to be an exceptional one in terms of fuel mix consumption. In 2017, 60% of the increase in primary energy was provided by natural gas followed by renewable energy. However the step back for both was an increase in coal consumption, which grew for the first time in 4 years with India recording the highest growth followed by China.

Oil and Refining

Global oil demand averaged 1.7 million barrels per day (MMbbl/d), significantly greater than the 10-year average of 1.1 MMbbl/d.

The increasing demand continued to be driven by oil importers benefiting from the windfall of low prices, with both Europe (0.3 MMbbl/d) and the U.S. (0.2 MMbbl/d) posting notable increases, compared with average declines over the past decade. The strong growth in oil demand resulted in refining runs increasing by 1.6 Mmbbl/d in 2017, more than twice their 10-year average.

While Saudi Arabia and Venezuela recorded the largest declines in global oil production, the U.S. and Libya posted the largest increase in output.

During the first half of the year, oil prices went down as stocks remained consistently high. Brent averaged $54/bbl, up from $44/bbl in 2016—the first annual increase since 2012.

Natural Gas

Spencer dale, group chief economist at BP, declared 2017 as a “bumper year” for natural gas since consumption rose by 96 billion cubic meters (Bcm) and production grew by 131 Bcm, both recording fastest growth rates since 2010.

While Russia recorded largest production increase by 46 Bcm, the biggest factor that contributed to the global increase in gas consumption was the surge in China gas demand by 31 Bcm.

"Much of this rapid expansion in China can be traced back to the Environmental Action Plan announced in 2013, which set targets for improvements in air quality over the subsequent five years," Spencer said.

Last year also saw continued expansion of liquefied natural gas (LNG), which increased by more than 10% in 2017, its strongest growth since 2010. China’s increased need for LNG accounted for almost half of the global expansion, overtaking Korea to be the world’s second largest importer of LNG after Japan.

Power Sector and Carbon Emissions

The power sector proved to be the biggest market for energy: absorbing more than 40% of primary energy last year. The increase in global power generation was driven by strong expansion in renewable energy, led by wind (17%) and solar (35%), which accounted for almost half of the total growth in power generation, despite accounting for only 8% of total generation.

While outstanding progress has been made in renewable power generation, the sector has taken a step back since power sector is the single most important source of carbon emissions from energy consumption, accounting for over a third of those emissions in 2017. After three consecutive years of little or no emissions, carbon emissions from energy consumption increased by 1.6% in 2017.

Spencer concluded that global energy markets in 2017 took a backward step in terms of the transition to a lower carbon energy system since growth in energy demand, coal consumption and carbon emissions all increased.

"The road to meeting the Paris climate goals is likely to be long and challenging, with many twists and turns, forward lurches and backward stumbles. To navigate our progress will require timely, comprehensive and relevant data," he said.