USA overtakes Russia as the largest oil and gas producer

Oil and gas well
Source: DollarPhotoClub

The U.S. has overtaken Russia as the biggest oil and natural gas producer in the world – according to BP’s Statistical Review of World Energy released on Wednesday. The report shows the U.S. oil production growing by a record 1.6 million barrels a day.

The USA has also become the first country ever to increase production by at least 1 million bpd for three consecutive years, and taking over from Saudi Arabia as the world’s largest oil producer. Meanwhile, OPEC production in 2014 was flat and the group’s share in global production fell to 41 percent, its lowest since 2003. Production outside OPEC grew by 2.1 million barrels per day (bpd) last year, led mainly due to the largest increase in the US production, but also due to production gains in Canada and Brazil – a 310,000 bpd and 230,000 bpd increase respectively.

“We are truly witnessing a changing of the guard of global energy suppliers,” BP Chief Economist Spencer Dale said in a presentation. “The implications of the shale revolution for the U.S. are profound.”

Global oil consumption last year grew by 0.8 million bpd, while world natural gas consumption grew by just 0.4 percent.

In terms of consumption, the US witnessed 2.9 percent rise in use of natural gas, 10.8 percent rise in use of renewables in power generation, 0.5 percent rise in oil and 1 percent rise in nuclear power use. There was however 3.7 percent decline in use of hydro power and 0.3 percent dip in coal usage.

“Oil remains the dominant fuel, accounting for 36 percent of US energy consumption. Oil consumption in 2014 was 1.8 million bpd lower than the record high set in 2005. Natural gas consumption (30 percent of US energy consumption) increased for the fifth consecutive year and set a new record high at 759.4 bcm,” the BP report stated.

Another shift noticed by the BP’s Statistical Review, was slowing down in China’s energy consumption. Chinese consumption growth was the slowest since 1998, yet China still recorded the world’s largest increment in primary energy consumption for the fourteenth consecutive year.

“Growth in some of China’s most energy-intensive sectors, such as steel, iron and cement — which had thrived during China’s rapid industrialization — virtually collapsed in 2014,” said Dale, a former Bank of England chief economist who joined BP last year.

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