World Coal Output Fell by Record Amount in 2016, BP Says
June 13 2017 - 2:14PM
Dow Jones News
By Neanda Salvaterra
Global coal production saw its largest decrease on record in
2016, as China and the U.S. dug up less of the commodity and burned
less of it for electricity, BP PLC said in the U.K. oil and gas
giant's annual energy review.
Coal made up only 28% of the world's energy production last
year, its lowest level since 2004 and a reflection of what BP said
was "marked shift toward lower-carbon fuels as renewable energy
continues to grow strongly." BP, as a major producer of natural
gas, stands to gain from less production of an energy source such
as coal.
Global coal production fell 6.2%, the most ever recorded, said
BP's Statistical Review of World Energy, a closely watched
compendium of information about global energy trends. U.S. output
declined 19% and Chinese production fell almost 8%.
President Donald Trump has made reviving the American coal
industry a key tenet of his administration. He said he would pull
the U.S. out of a global pact to limit carbon emissions because it
would hurt industries like coal production, and his administration
has moved to peel away regulations seen as harmful to the
sector.
BP said coal production was declining along with demand for the
commodity as the U.S., Europe and China all consume more natural
gas and renewable energy sources. Coal consumption in the U.S. fell
almost 9% in 2016 and nearly 2% in China, the world's largest
producer and consumer of the commodity.
"The scales of the falls we have seen in coal over the last few
years seems to me to signal a decisive break from the past," said
Spencer Dale, BP's chief economist.
Renewables such as wind and solar power were the fastest-growing
energy sources in 2016, BP said, increasing output by 12%.
Renewables now provide just under 4% of the world's energy, up from
2.8% of global energy consumption in 2015, according to BP.
In a statement, BP Chief Executive Bob Dudley said a transition
in energy markets was under way, although "it is not yet clear how
much of this break from the past is structural and will
persist."
BP said oil consumption continued to rise at a strong pace in
2016, up 1.6% in 2016, which was above the 10-year average. The
company sees a peak in oil demand around 2040, when consumption
will begin to fall globally.
Mr. Dale said the company doesn't believe oil-industry
investment has contracted enough to cause a global supply shortage
in the near future. Some industry leaders, including the
International Energy Agency and the Organization of the Petroleum
Exporting Countries, have warned that a lack of investment in new
projects will eventually lead to less production and potentially
price increases.
Mr. Dale said shale production was too resilient and OPEC's own
reserves too large for a significant supply shortage.
"I am less worried than others," he said.
Write to Neanda Salvaterra at neanda.salvaterra@wsj.com
(END) Dow Jones Newswires
June 13, 2017 13:59 ET (17:59 GMT)
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