Changes in global energy have profound implications

By Tyson Fisher, staff writer

The United States has passed both Saudi Arabia and Russia to become the world’s leading oil producer for the first time since 1975, according to a report from BP.

“We have truly witnessed a changing of the guard of global energy suppliers,” said Spencer Dale, chief economist for BP.

BP’s Statistical Review of World Energy was released in June.

According to the review, the U.S. recorded the largest increase in oil production worldwide in 2014. In fact, the U.S. is the first country ever to have an average annual increase of at least 1 million barrels per day for three consecutive years.

The major factor in U.S. oil production, of course, is the boom in shale oil – an industry that employs a considerable number of truck drivers who closely watch production numbers. Despite the number of shale rigs being cut by more than half, production is still steady, albeit slower than the initial boom.

In April, the U.S. Energy Information Administration reported that despite falling crude prices that occurred in the second half of last year, U.S. petroleum production increased 1.6 million barrels a day in 2014 – providing good news for truckers worried about their jobs in the oil fields.

Tom Kloza, co-founder of Oil Price Information Service, says Saudi Arabia and Russia still lead in crude oil production, but as far as liquid petroleum, the U.S. continues to top those nations in production. Barring a crisis in oil-producing countries such as Iraq and Iran that could stifle production, Kloza says the U.S. will remain close behind. Regardless, the U.S. is the closest it has been to Saudi Arabia in the past couple decades.

Kloza told Land Line that he predicts shale production will increase once oil hits $70 a barrel and decrease if it nears $50. Currently, WTI oil has been floating around the $60 area.

More stats from the report

BP reports that supply dramatically increased worldwide, and demand sharply decreased. Global energy consumption went up by only

0.9 percent in 2014, the slowest growth rate since the late 1990s, not counting immediately after the financial crisis. Consumption growth reached 2.0 percent in 2013 and has a 10-year average of 2.1 percent. China shifting its economy away from industries that are energy intensive played a large role in 2014’s slow growth.

Renewable energy was the fastest-growing form of energy for 2014, according to BP’s report. Accounting for one-third of the world’s total increase in energy use, renewables provided around 3 percent of the world’s energy. Conversely, natural gas consumption growth was slow due to a mild winter in Europe, resulting in less demand for gas for heating purposes.

Oil remains the world’s leading fuel at 32.6 percent of global energy consumption. However, oil lost part of its market share for the 15th consecutive year. LL