In their magisterial report BP Statistical Review of World Energy 2010, BP documents that in 2009 world primary energy consumption (oil, natural gas, coal, nuclear and hydropower) declined 1.1%, the largest decline since 1980. This included a 1.7% decline in global oil consumption (1.2 million bpd, the largest decline since 1982); and, for the first time on record, a decline of 2.1% in natural gas consumption. As one would anticipate, not all areas declined at the same rate. In fact, Chinese energy consumption increased 8.7%. Indian consumption of natural gas increased 25.9%! Liquid Natural Gas (LNG) now accounts for 30.5% of all natural gas traded in the world.
Where does this energy come from? The Middle East continues to be the source of most of the world's energy. It holds 56.6% of the world's proved reserves of crude oil, and 40.6% of the world's proved reserves in natural gas. 2009 proved oil reserves, as percentages of world oil reserves, can be ranked as follows:
Middle East 56.6%
South and Central America (not including Mexico) 14.9%
Europe and Eurasia 10.3%
Africa (including North African countries of Egypt, Algeria and Tunisia) 9.6%
North America (U.S., Canada, Mexico) 5.5%
Asia Pacific (including India and China) 3.2%
The oil reserves do not match easily with 2009 oil consumption patterns:
Asia Pacific 31.1%
North America 26.4%
Europe and Eurasia 23.5%
Middle East 8.7%
South and Central America 6.6%
Africa 3.7%
Natural Gas tells a similar, but not identical, story. First, the 2009 proved reserves:
Middle East 40.6%
Europe and Eurasia 33.7%
Asia Pacific 8.7%
Africa 7.9%
North America 4.9%
South and Central America 4.3%
2009 Consumption
Europe and Eurasia 35.9%
North America 27.8%
Asia Pacific 16.8%
Middle East 11.7%
South and Central America 4.6%
Africa 3.4%
Among regions of "developed" economies, North America is most out of balance with the rapidly developing economies of China and India closing rapidly. The most balanced area, in the aggregate, appears to be Europe and Eurasia. This is a false impression, given that the distribution of oil and gas is not uniform throughout the region. Russia holds 5.6% of the world's proved reserves, and Kazakhstan has 3%. Azerbaijan and Norway tie at 0.5%. The economies of France, Germany, Spain, etc. don't even make the listing. In natural gas, Russia has 23.7% of the world's proved reserves, followed by Turkmenistan (4.3%), Norway (1.1%), Kazakhstan (1.0%), and Azerbaijan (0.7%). As in the case of oil, most of Western Europe is included under the rubric "other."
One most also be cautious in describing the "oil and gas-rich Middle East," as well. Most of these hydrocarbon deposits are found in the littoral states of the Persian Gulf, but not in equal quantities. Saudi Arabia has the largest share of the world's proved oil reserves, at 19.8%; the Kingdom is followed by Iran (10.3%), Iraq (8.6%), Kuwait (7.6%)United Arab Emirates (7.3%), and Qatar (2.0%). The formerly important oil producer of Bahrain is no longer on the list. In natural gas, the proved reserves are held by Iran (15.8%), Qatar (13.5%), Saudi Arabia (4.2%) and Yemen (3.4%).
The 2009 drop in oil consumption was met by a drop in OPEC production, so OPEC continues to provide the swing capacity needed to moderate world oil prices. Gas prices are not as flexible, since approximately 70% of natural gas is still delivered via pipeline and long-term delivery contracts. While Russia and the other Eurasian countries do not hold the same levels of reserves as the Middle East, they remain a major source of hydrocarbons for the world's economies.
