The Energy Industry: Running at Full Speed
The world faces new challenges in energy production. The sharp increase in demand linked to population growth and new economies leads to higher demands on resources and production means. The “energy machine” is running at full speed and ensuring a sustainable supply of the rising demand is the day-to-day challenge of the energy industry.
Oil as the Main Primary Energy Source
At the heart of those issues is oil. Representing over one third of total primary energy consumption, it is the primary energy source.
Towards a Further Concentration of Oil Production
World annual oil production in 2013 was around 4100 Mtoe (BP 2014) (Fig. 3.1).
After the two oil crises in the 1970s (1973 and 1979), the world diversified its sources of oil production. The Middle East represents today 32% of total oil production, Eurasia 15%, and North America 19%. A number of smaller producers coexist with these giants, such as Europe (5%), Africa (10%), South America (9%) and China (5%). North America has always been a large producer but has successfully managed to maintain its share thanks to the development of unconventional oil in the United States and Canada (Fig. 3.2).
Global oil production has increased on average by 1% per year in the last 10 years. This increase hides several disparities. Output from the United States and Canada grew by more than 3% on average, their growth driven by the development of unconventional oil. That from Eurasia increased by an average of 2.4%, notably in former Soviet Union countries. Middle East production grew by an average of 1.6% per year. This region alone represents 50% of the total world production increase. All other sources of oil production which had developed from © Springer International Publishing AG 2017
V. Petit, The Energy Transition, DOI 10.1007/978-3-319-50292-2_3
Fig. 3.1 Worldwide oil production (BP 2014)
Fig. 3.2 Worldwide oil production per region (BP 2014)
the 1970s have either stagnated or decreased in the last 10 years. While South America’s output grew, it was by no more than 0.9% on average per year. Africa also became a bigger producer, but by less than 0.5% per year on average. European production has steadily decreased by an average of 0.5% per year. This means that oil production has concentrated among a few players in the last 10 years. The combined share of North America, Middle East and Eurasia rose from 61% in 2003 to above 66% today (Fig. 3.3).
Fig. 3.3 Share of oil production per region (BP 2014)
So, despite oil price being fairly high in the last 10 years and growing demand from new economies, oil production has concentrated around a few actors, a rather counterintuitive development partially caused by unconventional oil developments as well as oil price speculation.