(The Canadian Press) LONDON - Global demand for oil, gas, coal and nuclear power grew at a slower pace last year due to weak economic growth, recession and increased efficiency, energy company BP PLC (NYSE: BP, Stock Forum) said Wednesday.
In an annual review of the world energy market, BP PLC said growth in energy consumption slowed to 1.8 per cent from 2.4 per cent in 2011. Demand continued to grow in China and India, which together accounted for almost 90 per cent of the global increase. But even growth in developing countries was slower than it has been over the last decade.
Energy demand in the United States fell 2.8 per cent, leading an overall decline of 1.2 per cent in developed countries.
At the same time, the U.S. saw its biggest-ever annual increase in oil production in 2012. The company said the U.S. produced 8.9 million barrels of oil a day, up 13.9 per cent from 2011.
The strong growth comes as a result of the ability of drillers to extract liquid oil trapped in shale, leading to enormous production increases in North America.
The combination of weak demand and the rising supplies from the U.S. have knocked prices down.
"On the supply side, the most noticeable phenomenon remains the American shale revolution," BP Chief Executive Bob Dudley said in a statement. "In 2012, the U.S. recorded the largest oil and natural gas production increases in the world and saw the largest gain in oil production in history."
Other countries that saw big shifts include Libya, which registered a 215 per cent increase nearly two years after the war that brought about the fall of Moammar Gadhafi. Syria, which is engaged in its own conflict, registered nearly a 50 per cent decrease.
Global oil production rose by 1.9 million barrels a day, BP said.
The Paris-based International Energy Agency has said the U.S. will be a net exporter of oil by the next decade and could overtake oil powerhouse Saudi Arabia as the world's top crude producer by 2020.
Such shifts threaten the power of OPEC, which accounts for about a third of the world's oil production. The 12-nation cartel has expressed skepticism about industry estimates that U.S. shale extraction could amount to an extra 3 million barrels of oil a day within 20 years as well as forecasts of U.S. energy independence.
The BP review — its 62nd such annual report — said the U.S. shale oil boom showed countries can more easily switch between types of energy than in the past. Outside of the U.S., Japan ramped up its use of imported liquid natural gas after its Fukushima nuclear disaster in 2011. Germany is quickly phasing out its nuclear power production in favour of alternative energy.
Dudley said that the industry was seeing "a shift in supply towards a greater diversity of energy sources."
BP was off 63% to $42.82 on Wednesday, leaving a market cap of $135.8 billion, based on 3.17 billion shares outstanding. The 52-week range is $45.45 and $37.46.