Disruptions to supplies and increasing demand were the two big energy stories of 2011, according to the 2012 BP Statistical Review of World Energy.
In the 61st edition of the review, the ‘Arab Spring’ was highlighted as having a definite effect on oil and gas supplies while the Fukushima accident in Japan impacted nuclear and other energy sources around the world. These shocks pushed energy prices higher globally, with oil prices reaching a record average of more than $100 per barrel (bbl) for the first time in history, according to the report.
“As we seek to manage short-term disruptions and meet long-term demand, we should remember that open markets can be a powerful ally,” said Bob Dudley , BP Group chief executive, at the launch of the review in mid-June.
Markets “provided the flexibility that was crucial to the world's ability to cope with last year's disruptions. And over time, markets lead to the chain reaction of competition, innovation and growth which creates the secure and affordable energy supplies which governments and consumers are looking for.
“The good news today is that we’re seeing a whole range of areas where this process of competition, innovation and growth is generating results. These include shale gas; deepwater oil and gas; heavy oil; and, potentially, advanced biofuels,” Dudley said.
He went on to highlight the United States, where the shale gas boom has pushed natural gas prices down significantly. Despite the price drop, shale liquids helped the U.S. have the largest increase in oil production outside OPEC for the third year in a row, he noted.
The U.S. experience “shows how an open and competitive environment drives technological innovation and unlocks resources. I think the message for policy makers is to follow this model and to encourage competition wherever possible…This process also acts to support energy security by enabling countries to develop their domestic resources and by underpinning a dynamic global market.”
Christof Rühl , BP’s chief economist, pointed to some of the factors that affected the 2012 review results.
In 2011 there was “political unrest and violence that caused outages in oil and gas production in parts of the Arab world; the shut-down of Fukushima and earthquake-related reductions in Japanese coal-fired power generation, plus the subsequent closure of additional reactors in Japan and Europe; the first annual average oil price above $100; the first release of strategic petroleum reserves since 2005; the