Record energy demand

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According to a report by BP, rapid growth in demand for all forms of energy dominated world energy markets in 2004, leading to rising prices.

Rapid growth in demand for all forms of energy dominated world energy markets in 2004, leading to rising prices. While growth in demand from China in particular was exceptional, the strength of demand growth was a global phenomenon, increasing above the 10-year trend in every region of the world.

"The world's overall energy consumption grew by 4.3 per cent in 2004. In volume terms, this is the largest-ever annual increase in global primary energy consumption and is the highest percentage growth since 1984. It is exceptional that this demand growth was so geographically widespread," said Peter Davies, BP's chief economist, speaking today at the launch of the BP Statistical

Review of World Energy 2005. Published annually by BP, the Review contains data series on production and consumption of energy worldwide, up to the end of 2004.

While China's economy grew 9.5 per cent in 2004, this was outstripped by the rise in Chinese energy demand, which was up 15.1 per cent over the year. Over the past three years Chinese energy demand has risen by 65 per cent, accounting for over half the increase in global demand over the period. China now consumes 13.6 per cent of the world's total energy.

Outside China, world energy demand rose by 2.8 per cent, the fastest percentage increase since 1996 and approximately twice the rate of the previous two years. While every region experienced above-trend growth, demand from non-OECD countries (excluding China) grew 4.8 per cent, roughly three times as fast as from the OECD countries. Outside China, India was the single largest source of non-OECD energy growth, with demand rising by 7.2 per cent.


Oil consumption in 2004, up 3.4 per cent, or 2.5 million barrels a day (bpd), showed the fastest rate of growth since 1978. Rising Chinese demand accounted for over a third of this increase with a jump of 15.8 per cent or almost 900,000 bpd.

The high demand came despite record oil prices, which averaged $38.27 a barrel over the year, up almost 33 per cent from 2003 and the highest money-of-the-day average ever to be reported in the Review (though in inflation-adjusted terms prices were higher between 1974 and 1985). The price of a barrel touched $50 in October.

Oil output rose to meet demand, exceeding 80 million bpd for the first time in 2004. Outside OPEC, production increased by 965,000 bpd in 2004, well above the 10-year average. Russian production once again rose fastest, with output up nearly 750,000 bpd. Angola, Chad, Ecuador, Equatorial Guinea and Kazakhstan all registered growth of more than 100,000 bpd. The largest declines were in the UK, down by 230,000 bpd, and the USA, down by 160,000 bpd.

OPEC production also rose rapidly, by almost 8 per cent to 32.9 million bpd, the highest level ever. This was the largest increase in OPEC production since 1986. The rise was led by Iraq - where production grew by 677,000 bpd to 2 million bpd - Saudi Arabia and Venezuela.

Natural gas

World gas consumption grew by 3.3 per cent in 2004, above the 10-year average of 2.6 per cent. Despite rapid economic growth, gas consumption in North America was flat, reflecting the impact of high prices and also mild weather. Outside North America, gas consumption rose by 4.3 per cent.

Gas production rose in every region except North America. In Europe, growth in the Netherlands, Russia and Norway more than offset the UK production decline. Pipeline shipments rose by more than 10 per cent. Shipments of liquefied natural gas (LNG) rose by 5.4 per cent last year, although below the 2003 growth rate. US LNG imports continued to rise rapidly, up 29 per cent, compared to Japanese imports that declined by 3.5 per cent as nuclear plants returned to operation following shutdowns in 2003.

Gas prices also rose. The average Henry Hub US gas price increased to $5.85 mmbtu. Although this was also a record money-of-the -day annual average, the 3.9 per cent rise over 2003 was far less marked than the rise in the oil price. Gas prices in other regions grew more rapidly.

Coal, nuclear and hydroelectric

Global coal consumption rose 6.3 per cent, with three quarters of the rise coming from China. Coal was the fastest growing fuel globally, but was the slowest excluding Chinese demand. Apart from China almost all other demand growth came from Asia Pacific. Coal prices grew the fastest of all traded fossil fuels in 2004, with the European marker price rising 69 per cent over the year, driven by declines in Chinese coal exports as domestic demand increased, shortages in high-grade coal and increases in transport costs.

After a rare decline in 2003, world nuclear consumption grew by 4.4 per cent with recovery in Japan accounting for half of the growth. Globally, capacity and efficiency increased and US nuclear output grew 3.2 per cent to its highest ever level.

Global hydroelectric generation rose by 5 per cent in 2004. Growth was strong in China, up 16.6 per cent as new capacity came online, and in Europe & Eurasia, with recovery from drought and better rainfall.

The BP Statistical Review of World Energy is also available to view here.