(EnergyAsia, June 10 2011, Friday) — China overtook the US as the world’s largest energy consumer in 2010 as world consumption surged by 5.6% over the previous year to a record high, said BP in its 60th edition of Statistical Review of World Energy.

Last year’s energy demand growth was the strongest since 1973 while global carbon dioxide (CO2) emissions from energy use rose at their fastest rate since 1969.

The growth in energy consumption was broad-based, with both mature OECD economies and non-OECD countries growing at above-average rates.

Bob Dudley, BP Chief Executive, said: “There were both structural and cyclical factors at work. The cyclical factor is reflected in the fact that industrial production rebounded very sharply as the world recovered from the global downturn. Structurally, the increase reflects the continuing rapid economic growth in the developing world.

“I was in China a couple of weeks ago and I came away with a very clear sense of how rigorously China is thinking about these issues.

Growth is by no means the only game in town. They want to maintain social cohesion and they want to make their growth more sustainable. In sum, they are worried about energy security and climate change – just as we are.”

To address these concerns, Mr Dudley said the world should look to the markets, policy tools, technology advances and growth of renewable energy sources for solutions.

“This year, we have seen that the global energy markets are resilient. In the face of significant disruptions to the world’s energy system in Japan and Libya, demand continues to be satisfied. Markets work and markets work best when they are open and transparent.”

Christof Rühl, BP’s group chief economist, said: “Economic growth was led by the non-OECD economies which had suffered least during the crisis. By year-end, economic activity for the world as a whole exceeded pre-crisis levels driven by the developing world.

“Energy intensity – the amount of energy used for one unit of GDP – grew at the fastest rate since 1970. And so, when all the accounting is done, planet Earth – we all – consumed more energy in 2010 than ever before.”

Globally, energy consumption grew more rapidly than the economy, meaning that the energy intensity of economic activity increased for a second consecutive year. The data imply that global CO2 emissions from fossil fuel consumption will also have grown strongly last year.

Demand in OECD countries grew by 3.5%, the strongest growth rate since 1984, although the level of OECD consumption remains roughly in line with that seen 10 years ago. Non-OECD consumption grew by 7.5% and was 63% above the 2000 level. Chinese energy consumption grew by 11.2%.

Consumption growth accelerated in 2010 for all regions, and growth was above average in all regions.

Oil remains the world’s leading fuel, at 33.6% of global energy consumption, but it lost market share for the 11th consecutive year.

Global oil consumption grew by 2.7 million b/d, or 3.1%, the strongest growth since 2004.

Dr Rühl said: “The growth rate was more than twice the ten-year average; it featured the first increase in OECD oil consumption since 2005 and the largest volumetric increase outside the OECD ever. China contributed the largest national increment; its consumption rose by 860,000 b/d or 10.4%. The US, Russia, and Brazil also recorded large increments.”

The strong recovery in oil consumption was accompanied by strong growth in production though the increase was not as large as the increase in consumption.

Growth was broadly split between OPEC and non-OPEC producers. In OPEC, Nigeria and Qatar accounted for the largest increases.

Among non-OPEC producers, China saw the largest increase in the country’s history due to rising offshore output. Russia and the US also contributed significantly, while Norway experienced the world’s largest production decline, said Dr Rühl.

Oil prices remained in the $70-80 range for much of the year before rising in the fourth quarter. With the OPEC production cuts implemented during the global recession in 2008/09 still in place, and despite informal production increases in the face of the strong recovery in consumption, average oil prices for the year as a whole were the second-highest on record.

However due to the high prices, oil saw the weakest consumption growth among fossil fuels last year.

Natural gas consumption rose 7.4%, the strongest volumetric gain on record. Non-OECD economies expanded their share to over 51%; China solidified its role as Asia’s largest gas market.

But OECD markets grew rapidly too (6.4%, +93 billion cubic metres), with consumption attaining all-time highs. Production rose 7.3%, also a record increment. 31% of this global growth originated in the former Soviet Union, followed by the Middle East.

Dr Rhul said: “The shale gas revolution in the US and massive changes in LNG markets are reshaping the world of natural gas.”

Over the last five years, global LNG supply grew by a cumulative 58% – three times faster than total gas production. And last year, the supply of LNG expanded by an unprecedented 22.6% (55 bcm).