While BP (BP) might have its problems safely collecting oil from the bottom of the sea, they are very good at collecting data on the world energy market. Each year they put out a statistical review of world energy that is very informative. Here are some of the key highlights from the recently-published 2010 edition, which has data through 2009.

In 2009 the world’s consumption of oil fell by 1.7%. That is the second consecutive year of decline, but relative to a decade ago consumption is up 11.1%. This is a reflection of both the weak world economy and of conservation efforts spurred by the extremely high oil prices in 2008. Consumption in the U.S. fell much further, dropping by 4.9% in 2009, and it was actually 4.3% below what it was in 1999 when oil prices were extremely low, but the economy was booming.

Still in 2009, the U.S consumed 21.4% of the world’s oil. The U.S. was actually able to increase its production of oil by 7.0%, although that feat is certainly not going to be repeated in 2010 given the moratorium on deep water drilling after the Transocean (RIG) deepwater Horizon went down in flames. Over the longer term U.S. production has been in a steady decline, and is 6.9% below the level of a decade ago. The U.S. is actually the world’s third largest oil producer at 7.196 million barrels per day (Mb/d), or 8.5% of the world’s total. That is more than Iran and Kuwait combined. Russia was the world’s largest producer at 10.032 Mb/d, followed by Saudi Arabia at 9.713 Mb/d.

The U.S. was not the only major country with the biggest reduction in oil usage last year. Japan’s consumption plunged 10.7% and is 21.5% below where it was a decade ago. Most of the major European countries had declines in consumption that were roughly in line with the decline in the U.S., ranging from a 3.5% decline in France to a 6.3% drop in Italy. Over the longer run though, the major European countries have reduced their consumption significantly more than the U.S. has. For example, consumption in Germany in 2009 was 14.2% below 1999 levels and in Italy it was down by 20.2% over the course of the decade.

The consumption declines in the developed world were offset by increased usage in the developing world. Most significant of these is, of course, China, where oil consumption rose by 6.7% in 2009 and is up 92.7% over the course of the last decade. India burned 3.8% more oil in 2009 than it did in 2008, and 49.2% more than it did in 1999. One area of the world that has really been increasing its oil consumption rapidly is the oil-producing countries. Both Saudi Arabia and Kuwait increased their consumption by 9.8% in 2009 and their consumption is up 69.4% and 72.4%, respectively over the last decade. From the U.S. perspective, the important number for the big producers is not just how much they can produce, but how much they have available for export.

Even with the U.S. decline in 2009, the U.S. still consumes a massive amount of oil relative to the rest of the world. In 2009, the U.S. consumed 21.7% of the world’s oil. That is more than China, India and all of Central and South America combined. While being able to increase production by 7.0% was a nice accomplishment, it is not sustainable. We already produce 8.5% of the world’s oil, but we have just 2.1% of the reserves.

On the other hand, the reserve figures for most of the rest of the world are, in a word, flakey. OPEC sets its production quotas on the basis of reserves, and the reserves it uses are pretty much whatever the member governments say they are. Back in the 1980s, that lead to most of the countries vastly increasing their reserves without actually finding more oil. Since then even though they have been procuring heavily, the reserves have not declined, and indeed in many areas crept upwards. Only in the oil industry is it possible to take a positive real number and then subtract a positive real number and not have the original number decline. That process did not end in the 1980s either.

The biggest news in the world in terms of new oil finds over the last decade have been the finds off the coast of Brazil by Petrobras (PBR). However since 1999, Brazil’s (not a member of OPEC) reserves have only increased by 4.6 billion barrels or 56.0%. On the other hand, Venezuela’s reserves have shot up by 95.5 billion barrels, or 124.4%. Did you hear about the massive new finds in Venezuela over the last few years, an oil find that is truly world changing? Funny, neither did I. It’s far more likely that Hugo Chavez is full of it. Thus, it is very possible that the U.S. has a higher percentage of the world’s oil reserves than the 2.1% shown by BP. However, that would be because the rest of the world, particularly OPEC, is vastly overstating the amount of oil they have.

While the decline in overall world oil consumption in 2009 is encouraging, it is probably mostly a reflection of a weak global economy. America in particular needs to continue finding ways of using oil more efficiently and to find alternative sources of energy. The combination of 21.7% of world consumption, 8.5% of world production and 2.1% of world reserves is simply not sustainable over the long run.

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