Oil Consumption

Our sustainable homes are zero energy but we are alone, No government has managed to significantly reduced carbon emissions or to reduced the dependency of its population on fossil fuels but our sustainable homes are an important first step. Global primary energy consumption increased by 0.9% in 2014. This was well below the 10-year average of 2.1% but it is still an increase. Growth in the US (+1.2%) was more than offset by declines in energy consumption in the EU (--3.9%) and Japan (--3.0%). The declines in Europe and Japan are not by choice but due entirely to poor economic performance.

The price of crude oil was reasonably uniform for most of the 20th Century.  After the Second World War the price of crude oil was very stable as it was set by the Railroad Commission of Texas (Texas Railroad Commission).  This state agency regulated the oil and gas industry and also set the price of oil.  In the 1960’s the US economy was in severe difficulty and in the end President Nixon took the US off the Gold standard and introduced fiat currency.  A great deal of money was then printed to stimulate the US economy.  When combined these actions meant that the price of oil failed to rise while the US dollar declined in value.  In the end the members of OPEC lost patience and unilaterally raised the price of their oil.  This then caused a worldwide recession.  Soon after the Yom Kippur War made matters even worse.

From 1900 to 1970 oil consumption rose by 7.1% per annum.  After the Yom Kippur War the increase in the rate of consumption fell to 3.1% per annum.  After 2005 the production of conventional crude oil was flat.  The increase in the rate of production after 2010 was due entirely to tight oils like fracking, tar sands and ultra deep water drilling.  This was a short term aberration and now tight oil production is falling.


tank farm

Most tank farms across the world were full at the end of 2014

In 2014 global oil consumption grew by 0.8 million barrel/day (0.8%).  This was much lower than the increase of 1.4 million barrel/day seen in 2013.  China’s growth in consumption was 390,000 barrel/day.  Japan recorded the largest decline with a fall of 220,000 barrel/day.

The growth in global oil production was more than double that of consumption, rising by 2.1 million bar/d (2.3%).  The US recorded the largest growth in the world (+1.6 million barrel/day), and took over from Saudi Arabia as the world’s largest oil producer.  Production also increased in Canada (+310,000 bar/d) and Brazil (+230,000 bar/d).  Declines in Libya (-490,000 bar/d) and Angola (-90,000 bar/d) were offset by gains in Iraq (+140,000 bar/d), Saudi Arabia (+110,000 bar/d) and Iran (+90,000 bar/d).


In 2014 world natural gas consumption grew by 0.4% which was well below the 10-year average of 2.4%.  Growth was below average in both the OECD and emerging economies, with consumption in the EU experiencing its largest declines on record.  The five largest volumetric declines in the world were Germany, Italy, the Ukraine, France and the UK.  The US, China and Iran recorded the highest level of growth.

In 2014 global natural gas production grew by 1.6% which was below its 10-year average of 2.5%.  Growth was below average in all regions except North America.  EU production fell sharply to its lowest level since 1971.  The US recorded the world’s largest increase.  The largest volumetric declines were seen in Russia and the Netherlands.


Deep coal mining


The German Federal Institute for Geosciences and Natural Resources reported that there were 1052 billion tonnes of coal reserves remaining as of 2012.  BP reported that 892 billion tonnes of coal reserves remained in 2014, or 113 years of coal output.  BP has reported that total world coal production reached a record level of 7,822 mil tonnes in 2013, or 0.4% more than in 2012.  In 2014 coal consumption grew by 0.4% which was well below the 10-year average of 2.9%.  Consumption outside the OECD grew by 1.1%, the weakest growth since 1998, driven by a flattening of Chinese consumption.  Ukraine and the UK posted significant declines.  India experienced its largest ever volumetric increase.