Findings from the BP Statistical Review of World Energy:
North American Energy in 2014 – A Banner Year for Supply
Mark FinleyGeneral Manager,Global MarketsBP AmericaWashington, DCMark.Finley@BP.com Arminé ThompsonOil Supply EconomistBP AmericaWashington, DC
These observations on the North American energy story in 2014 are drawn from the 2015 edition of the BP Statistical Review of World Energy, which was published in June. More information on this year’s Review – the 64th annual edition – can be found at www.bp.com/statisticalreview.
The North American energy sector was dominated by strong production growth and many new firsts in 2014. Primary energy production grew by an above-average 5.4% in 2014, in large part due to growth in US primary energy production, which grew by 6.5%, the largest volumetric increase in US history (surpassing the previous record set in 1984). North American primary energy consumption increased by 0.9% in 2014 despite declines from both Canada and Mexico, as US consumption grew by 1.2%, the second consecutive year of above-average growth. US domestic production was sufficient to meet 89% of domestic consumption, the largest share since 1985, and the growth in US energy production was greater than the growth in global energy consumption in 2014. The changes in North America’s energy balance had significant implications for global energy markets as well.
It was US oil supply growth that made all the headlines in 2014 and indeed it was a record-setting year. US oil production increased by 1.6 Mb/d in 2014, by far the largest growth in the world, and the first time any country has increased oil production by more than 1 Mb/d for three consecutive years. The US also set a new record with domestic oil production reaching 11.6 Mb/d, surpassing the previous 1970 record of 11.3 Mb/d. The US became the world’s largest oil producer in 2014 for the first time since 1975, surpassing both Saudi Arabia and Russia. Canadian oil production also had a record breaking year; output increased by 315 Kb/d, the largest increase in the country’s history, and output reached a record high of 4.3 Mb/d. Meanwhile, oil production in Mexico has now declined every year since 2005. On the consumption side, North American oil consumption declined slightly in 2014 (-20 Kb/d) to 23.4 Mb/d, despite an increase in US consumption (+70 Kb/d). North American net oil imports have declined by 6.9 Mb/d since peaking at 11.5 Mb/d in 2007, and the strong growth in regional production – and the sharp reduction in import dependence – played a significant role in the large decline in world oil prices experienced in 2014.
North American natural gas production reached a record high in 2014 of 91.8 bcf/d, and the region accounted for 87% of global production growth last year. In the US, gas production increased by over 6% (+3.8 bcf/d, almost double its 10-year average) to 70.5 bcf/d; this represented the largest growth in the world last year and the second-largest increase in US history (behind 2011). The US alone accounted for nearly 80% of the total increase in global gas supplies in 2014. Over the past ten years, US shale gas has accounted for roughly half of the increase in global production of natural gas. Canadian natural gas production also grew robustly last year, increasing by 3.8% compared with the 10-year average of -1.2%. Natural gas production in Mexico was weaker than the 10-year average, declining by 0.2% compared with the 10-year average growth of 3.0%. North American gas consumption increased by 2.5% to 91.9 bcf/d in 2014, much stronger than global growth of 0.4%. Growth was driven by the US, where consumption rose by almost 3% or 1.9 bcf/d. While both Canada and Mexico reached record levels of gas consumption in 2014, their share of regional consumption growth was much smaller than the US.
Coal production grew by an above-average 1.2% or 6.4 mtoe in 2014, the first increase in North America since 2011. Again it was growth in US production (+1.4% or 7.0 mtoe) that drove the North America increase. Nearly all (92%) of North American coal production comes from the US. Total North American consumption was unchanged in 2014 at 488.9 mtoe: strong growth in Mexico (+7.3% or 1.0 mtoe) was offset by a decline in US consumption (-0.3% or -1.2 mtoe).
Growth in non-fossil fuels in 2014 was mixed. North American nuclear power generation increased by 1.1% or 2.4 mtoe last year, significantly above the 10-year average of 0.3%. Gains from the US (+1.9 mtoe) and Canada (+0.9 mtoe) outweighed a decline in Mexico (-0.5 mtoe). Hydroelectric output declined by 1.7% or -2.6 mtoe, below the 10-year average of +0.7%. While hydroelectric output in Mexico increased by 2.4 mtoe (+39%), the largest increase since 2008, this was not enough to outweigh declines in the US (-2.2 mtoe) and Canada (-2.8 mtoe). Renewables in power, increased by 10.0% or 6.7 mtoe in 2014, significantly below the 10-year average of 11.9%. Renewables in Mexico grew by an above-average 9.2% or 0.3 mtoe in 2014, but consumption in both the US (+10.8% or 6.3 mtoe) and Canada (+0.3% or 0.01 mtoe) increased at below average rates. Wind energy consumption in particularly was weak, with North American wind output rising by just 8.3% or 6.2 mtoe, compared with a 10-year average of 29.5%.