Coal's share of world energy demand at 44-year high

Coal's share of global energy use reached 30.1 per cent. Photo / Thinkstock

Coal dominated world energy markets last year by supplying the biggest share of demand since 1970, making it the fastest growing fossil fuel, according to an annual review by BP.

Consumption grew 3 per cent last year, driven by coal use in developing nations, according to a statement on Monday from Europe's third-largest oil company. Use of renewables such as solar and wind also reached a record, accounting for 2.7 per cent of all energy demand.

The findings are another indication that consumers are prioritising cheap fuels over efforts to rein in greenhouse gas emissions blamed for global warming. Coal is the dirtiest fossil fuel, and use of it expanded at utilities from China to Germany.

"Europe is increasing its carbon emissions because it's using too much coal because it's cheap," Royal Dutch Shell's Chief Financial Officer Simon Henry said in an interview on Bloomberg Television on June 3.

Coal's share of global energy use reached 30.1 per cent, just below the 32.9 per cent share for crude oil, which lost market share for a 14th consecutive year. China was the world's biggest coal consumer, followed by the US and India.

In China, coal accounted for 67.5 per cent of the total energy demand, the lowest on record because of new measures to combat pollution. Carbon dioxide emissions from fossil fuels use grew by 4.2 per cent, or 358 metric tons, the slowest in five years, the report showed.

"The big story in coal markets is China," Christof Ruehl, BP's chief economist, said on Monday at a presentation in Moscow. "New policies to combat local pollution by shutting down coal-intensive production and encouraging coal substitution may have played a part" in cutting the fuel's dominance to the lowest on record.

Natural gas consumption rose 1.4 per cent, below the historical average of 2.6 per cent, to account for 23.7 per cent of world primary energy use. Gas demand growth was below average everywhere but North America, where hydraulic fracturing technology opened new supplies.

That so-called fracking technique also helped boost oil supply in the United States, which had record output, a trend that will continue this year, Ruehl said.

Disruptions in oil-producing nations such as Libya, Sudan and Nigeria were offset by the increase in US production from shale and other "tight" geological formations where supplies are difficult to extract with traditional techniques.

"This underlines the importance of continuing to secure these new supplies through continued access to new resources, policies to encourage markets and investment, and the application of new technologies worldwide," BP's Chief Executive Officer Bob Dudley said in the statement.

Worldwide, energy consumption rose 2.3 per cent in 2013, faster than the 1.8 per cent pace of the year before but below the 10-year average of 2.5 per cent, BP said. Emerging economies accounted for 80 per cent of demand growth.

China's energy consumption rose by 4.7 per cent, below the 10-year average of 8.6 per cent, BP said.

- Bloomberg