Centre for Energy Economics Research and Policy


2016: A historic year for coal?

2016 could be remembered as one of the most outstanding years for solid fuel markets in history. 2015 was already a historic year, with the BP Statistical Review of World Energy reporting a -4.2% change in coal output in volume in 2015, the biggest year-on-year decrease in coal output in the Statistical Review. IEA records also indicate this was the biggest decrease since at least 1971.
It looks like things are getting even worse for coal markets in 2016, as the fast paced changes deepen further in the US and Chinese markets.

China’s accumulated growth rate in coal output in October 2016 was -10.7%, according to monthly data from the China National Bureau of Statistics (NBS). US coal mines are producing at a much slower pace than in 2015, showing a -26.3% growth rate in the first semester of 2016 compared to the same semester of the previous year. Weekly data for 2016 (unrevised) from the EIA shows a -21.6% growth rate versus (revised) 2015 data in the first 46 weeks of each year.

These statistics could lead to three historic events in coal production in 2016:
–    The Chinese coal output could be at its lowest level in 2016 since 2009, if the current pace of slowdown in mining persists in the last four months of the year.

–    With the massive slowdown in US coal production, India would become the second biggest coal producer in the world in 2016, a place that the US has held since 1984.

–    We could witness yet another record-breaking slowdown in global coal output in 2016. Even if the rest of the world (excluding China and US) stabilise output, the global coal production growth rate for 2016 could be around or over -7%, crushing previous records. This would be a record-breaking growth rate even if Chinese output recovers and performs better than in previous months. If the rest of the world follows the decreasing trend, this slowdown could be even pronounced. This is an incredible shift with massive consequences for consumption, shifting fuel mixes, and CO2 emissions.

Since consumption is expected to follow these production patterns, a historic decrease in coal consumption appears likely. This, coupled with a scenario of low global energy consumption growth, is likely to mean lower CO2 emissions from fuel combustion in 2017 — an important and welcome result in light of the latest negotiations in Paris.

Two-part energy economics event

The Centre for Energy Economics Research and Policy (CEERP) has organised a two-part event on energy and environmental economics taking place on the 15th of March 2016. The first part is a workshop on topics of energy and environmental economics with three invited speakers, followed by a Q&A and discussion session.

The workshop will be followed by the Scottish launch of BP plc’s Energy Outlook. BP’s group chief economist, Spencer Dale, will deliver and lecture and present results from this year’s publication.

To sign up and for more information, click here and here.

Dark predictions about North Sea oil look all too believable

The oil price is struggling to stay above US$30/barrel, little more than a quarter of the price 18 months ago. Recent forecasts for the UK industry have become much gloomier as a result. As recently as three months ago, industry association Oil & Gas UK predicted 79 platforms would close by 2024. Several major consultancies have since suggested that it might be more like twice that. So how pessimistic is it reasonable to be?

Continue reading…

BP Statistical Review of World Energy 2015

For the ninth consecutive year, Heriot-Watt University has collaborated with BP plc in the preparation of the data for the company’s annual BP Statistical Review of World Energy. Researchers within the Centre for Energy Economics Research and Policy (CEERP) were involved in providing detailed statistical and analytical support for this year’s Statistical Review. CEERP is a newly established centre that will see extensive collaboration between Heriot-Watt University and BP.

The Statistical Review, a highly esteemed document consulted by energy experts, the energy industry, academics and journalists from around the world, tells the story – and history – of world energy through the numbers behind the energy market headlines. The Statistical Review is available in print and online at http://www.bp.com/statisticalreview.

The 2015 edition of the Statistical Review was launched on Wednesday 10 June at BP headquarters in London. In his speech at the event, BP’s Chief Economist Spencer Dale thanked the team from Heriot-Watt University for their “invaluable help and support.”

The Statistical Review will see its Scottish launch on Thursday 2 July in the Hawthornden Lecture Theatre (National Gallery) in Edinburgh, which will be presented by the Chief Economist, Spencer Dale.

New Centre for Energy Economics

Heriot-Watt University is setting up a new Centre for Energy Economics Research and Policy with funding of £1.25m over three years from BP.

The Centre will be involved primarily in providing the detailed statistical and analytical support for BP’s Statistical Review of World Energy and its annual Energy Outlook.

Heriot-Watt academics will support BP’s economics team to provide an objective snapshot of the global energy market, together with historical data to provide context and longer-term research on energy economics and markets.

BP has published its annual Statistical Review of World Energy since 1952. The Review is one of the most widely respected and authoritative publications in the field of energy economics, used for reference by the media, academia, world governments, and energy companies. Heriot-Watt University has worked on its production since 2007.

BP’s Energy Outlook is a highly anticipated industry event that reflects the company’s best effort to describe a “most likely” trajectory of the global energy system over the next 20 years, based on its views of likely economic and population growth, as well as developments in policy and technology. This year’s Energy Outlook 2035 was launched in London on February 17.

Professor Dorrik Stow, Head of Heriot-Watt University’s Institute of Petroleum Engineering will head up the new centre along with Professor of Economics, Mark Schaffer.

Professor Stow said, “Heriot-Watt is well known for its strong industry links which result in innovative research and enhanced opportunities for students. This Centre will be incorporated into the University’s new £20m Lyell Centre which will be the Scottish headquarters for the British Geological Survey (BGS) as well as a major joint BGS/Heriot-Watt University research centre for geological, petroleum and marine sciences.”

First published on: Heriot-Watt News.