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BP’s Annual Statistical Review of World Energy. A week ago, we drew a number of conclusions from BP’s annual statistical energy review, linked here if readers missed it. Below are other perspectives our readers will appreciate, though the writers didn’t focus as much attention on the serious financial impact alternative energy subsidies pile onto family and business consumers worldwide.
The BP report paints a realistic world portrait of energy price and demand volatility: the enormous energy supply potential, and a huge potential for growing demand influenced by an otherworldly dimension of speed-of-light, evolving technology.
See yesterday’s report: All About Alaskanomics. Below, we also note Alaska’s perennial struggle to match budgetary expenses with income in a state whose natural resource based economy has produced a budget 90% dependent on energy royalties and taxes–thus resulting in a ‘feast or famine’ economy.
The dots do truly connect our global and local interests. This means, in part, that local energy tax policies should not be undertaken without considering global competition for capital investment dollars. -dh
ADN References: Alaska will pay dearly if we don’t act on budget now, by Alaska’s challenge: Balance budget, minimize misery,
Yesterday, Governor Bill Walker issued the statement below, in response to a rating agency’s credit downgrade action.
This obviously means the state will now have to pay higher interest rates on revenue and general obligation bonds to attract investors at a time when it is operating at a several billion dollar per year deficit.
Our commentary. While we would agree that the Permanent Fund earnings should be used, in part, to support government operations, that effort should have been undertaken after much more state operating budget cutting had occurred.
This, in turn, would have been evidence to citizens and businesses that their financial sacrifices would only come after the state had undertaken the most massive and responsible public spending cuts possible. As it is, state agency employees and programs are pretty much being kept whole as the private sector is being asked to pay up.
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The governor’s statement on the credit downgrade insisted that, “While today’s news from Fitch Ratings is concerning, it should not come as a surprise. Fitch notes that we have a deficit of more than $3 billion after cutting the budget 19 percent last year and another 20.5 percent this year. With no significant new revenue measures passed to date, Alaska will burn through its savings in just a few short years. This further underscores the need to pass a sustainable fiscal package this year. We have all the tools to solve the problem. I urge members of the House to create certainty and stability for all Alaskans by voting for the Permanent Fund Protection Act, which is the cornerstone of the plan for a sustainable future.”
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We believe that the principle “cornerstone of the plan for a sustainable future” should be the state’s commitment to rating agencies, natural resource industry investors and citizens that Alaska will henceforth learn to live within its means.
Alaska should be a beacon of financial stability to investors and future generations of citizens alike.
That stability will come when leaders match their annual budget expenses with a reasonable and predictable, natural resource based income.
This is the perfect time to set that new cornerstone for a sustainable future into hard concrete.
HYDROCARBON PROCESSING:
2016 BP Statistical Review shows world shifting to lower-carbon fuels
The Review shows that in 2015 global demand for primary energy grew by only 1%, significantly slower than the 10-year average. This reflected continued weakness in the global economy and lower growth in Chinese energy consumption as the country shifts from an industrial to a service-driven economy.
Today, our anonymous, Mid Atlantic energy analyst friend reviews the BP world energy report:
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As we pointed with a note a few days ago, the annual BP Statistical Review of World Energy is now available online, at the link below.
http://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2016/bp-statistical-review-of-world-energy-2016-full-report.pdf
It is well worth a review, and we suggest getting a hard copy for quick reference.
Ordering copies
You can order BP’s printed publications, ree of charge from
or, by using the following details.
US and Canada, Toll-free +1 888 301 2505, bpreports@precisionir.com
The following is a worthwhile set of comments from Peter Tertzakian of ARC Financial (see below) about trends presented in this year’s edition. We will have more observation ourselves from the contents in a future note.
THE FINANCIAL POST by Peter Tertzakian:
The world buys about US$3.5 trillion worth of primary energy – coal, oil, natural gas, nukes and renewables – every year. Fighting for every megajoule supplied to hungry consumers has become the mother of all market share battles.
Renewable energy systems continue to demonstrate impressive wins. Natural gas is also on the front lines, making gains with wind and solar in electrical power markets. Coal, the king of carbon, is surrounded, wounded and in retreat. Oil is on a different battlefield altogether, advancing quickly and unchallenged while, nukes and hydro remain largely under the radar.
These are the high-level messages taken from the annual BP Statistical Review, a mandatory read for energy pundits following the upstream energy battlefield. Released last week, the 65-year-old publication always gives a sobering view of the world’s voracious energy needs, and how the market share of these six primary energy groups is changing.
First, let’s review our needs. Our global appetite for primary energy is enough to make anyone slap their forehead in disbelief: As of 2015, our scaled-up world of seven billion people is gorging on 22 million tonnes of coal, 93 million barrels of oil, 10 billion cubic metres of natural gas, 180,000 kilograms of uranium and millions of hectares of wind farms, solar panels and hydroelectric reservoirs every single day.
BP’s retrospective numbers show that the world’s top-line appetite for primary energy is still growing, albeit at a moderating pace: one per cent in 2015 instead of 1.1 per cent in 2014. That pullback doesn’t sound like much self-discipline in an energy obese world. Candidly, it’s not; but one per cent is noticeably lower than the 2.5 per cent average growth realized between 2000 and 2012. Slower overall demand growth means the fight for market share is more competitive and less forgiving.
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