Oil, natural gas and coal continued to dominate global primary energy consumption in 2022 despite focused efforts by western governments to subsidize a largely debt-funded transition to renewables and electric vehicles (EVs). The Statistical Review of World Energy, conducted by the Energy Institute, finds that fossil fuels provided 82% of primary energy consumption during 2022, the same percentage it provided in 2021, as surging energy demand offset growth in renewables and EVs.
A Persistent Dominance By Fossil Fuels
Fossil fuels’ percentage of global primary energy has remained stubbornly within a few percentage points of this level throughout the 21st century despite trillions of dollars having been poured into research, development and the build-out of a steadily-expanding “green” energy sector. This global thirst for fossil fuels has proved quite stubborn in the face of the best efforts of central planners to diminish it.
BP had conducted this annual Statistical Review since 1952, but decided last year to end that practice, turning it over to the Energy Institute. Per the Institute’s website, “Data compilation is being undertaken by the Centre for Energy Economics Research and Policy at Heriot-Watt University. An advisory board has also been established, bringing together respected energy thought leaders and experts to provide strategic oversight of the publication.” All the statistics contained in the report are derived from government and published data.
Global demand for crude oil rose during 2022 by 2.9 million barrels of oil per day (bopd), with OECD countries accounting for 1.4 million bopd of that growth, and 1.5 million coming from non-OECD nations. This was a drop in the rate of growth seen in 2021, when the world was coming out of the demand destruction that took place during the COVID-19 pandemic. Global demand during that recovery year rose by over 5%.
Perhaps most disturbingly for energy transition proponents, production of coal rose by 7% in 2022 thanks mainly to rapid consumption growth in China, India and Indonesia. Those three countries accounted for 95% of overall coal demand growth during the year. Overall, global coal consumption rose to the highest level seen since 2014.
While global natural gas demand dropped by 3% and fell below the 4 Tcm mark the commodity had first achieved during 2021, demand for liquefied natural gas (LNG) saw strong, 5% growth due largely to the big increase seen in Europe following Russia’s invasion of Ukraine. The United States, with its rapidly-expanding LNG export capabilities, was responsible for the great majority of increase in global LNG supplies. The natural gas share of electricity generation remained steady in 2022, coming in at the same 23% it had achieved in 2021.
Not surprisingly, the report finds that natural gas pipeline trade dropped by 15% during the year, with net imports to Europe plummeting by a whopping 35%. Virtually all of that downward movement derives from the cutoff exports from Russia into Europe.
Good News For Renewables Growth
There is some good news for energy transition boosters on the renewables front, however. The share of renewables, excluding hydropower, rose to 14.42% of global power generation, an increase of roughly 11% from its share in 2021. That 2022 percentage significantly exceeded nuclear, which came in at 9% of the mix. By comparison, coal provided 35%, a slight drop from 2021, with natural gas at the aforementioned 23%.
The report finds that this global energy mix resulted in a slight uptick in carbon emissions of .8%, with energy consumption accounting for 87% of the growth in emissions resulting from human activities. One bit of positive news where emissions are concerned was the finding that carbon emissions from natural gas flaring dropped by 3.8%.
“Despite further strong growth in wind and solar in the power sector, overall global energy-related greenhouse gas emissions increased again,” Juliet Davenport, president of the Energy Institute, summarized. “We are still heading in the opposite direction to that required by the Paris Agreement.”
The Bottom Line
As has been the case throughout the 21st century, efforts by western governments to shift the global energy mix away from fossil fuels again failed to overcome the pace of global demand growth during 2022. While the geographical source of demand growth continues to shift from OECD to non-OECD nations, the pace of growth remains strong as developing countries seek to grow their own economies.
This stubborn global dynamic has resulted in rising influence of proponents of economic de-growth within the energy transition movement, mainly in the western, developed world. Whether populations in Europe, North America and other developed nations will be willing to tolerate and support intentional efforts by those who govern them to destroy economic growth is a question that has yet to be answered, but likely will be soon.
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