China Surpasses US As Largest Energy Consumer; World Has 46.2 Year Of Proved Oil Reserves; Crude Has Lots Of Upside In Real Terms

Tyler Durden's picture

In its just released must read Statistical Review of World Energy, BP has many critical observations, the key of which, while not a surprise to most, is that as of 2010, the US is no longer the world's biggest consumer of energy. The new leader, with a 20.3% share of global energy consumption: China. Keep in mind that the Chinese economy is still (in whatever centrally planned terms it discloses) not even half the size of the US, thus one can only imagine how far this number will rise should China ultimately succeed in its goal of converting from an export-led to a consumer-led society. And here we have a market worried about a few million bpd in quota courtesy of the now defunct OPEC. From the report: "World primary energy consumption – which this year includes for the first time a time series for commercial renewable energy – grew by 5.6% in 2010, the largest increase (in percentage terms) since 1973. Consumption in OECD countries grew by 3.5%, the strongest growth rate since 1984, although the level of OECD consumption remains roughly in line with that seen 10 years ago. Non-OECD consumption grew by 7.5% and was 63% above the 2000 level. Consumption growth accelerated in 2010 for all regions, and growth was above average in all regions. Chinese energy consumption grew by 11.2%, and China surpassed the US as the world’s largest energy consumer. Oil remains the world’s leading fuel, at 33.6% of  global energy consumption, but oil continued to lose market share for the 11th consecutive year." And in terms of production reserves: "World proved oil reserves in 2010 were sufficient to meet 46.2 years of global production, down slightly from the 2009 R/P ratio because of a large increase in world production; global proved reserves rose slightly last year. An increase in Venezuelan official reserve estimates drove Latin America’s R/P ratio to 93.9 years – the world’s largest, surpassing the Middle East."

There is much more in the full report, but three charts bear highlighting: the reserves-to-production ratio, the relative pricing of crude in real terms, and the major trade movement of Crude in the world in 2010. Bottom line: crude likely has a long way to go up unless the global economy promptly commences another 2008 mega deflationary episode.

Reserves-to-production (R/P) ratios:

And Real crude Prices since the Pennsylvania Oil Boom:

World trade movements of crude:

Full report.

BP Statistical Review

And the full booklet:

2030 Energy Outlook Booklet

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Flakmeister's picture

Oh goody....

Not only a thread on WWII, a bonus peak oil thread...


Dr. Engali's picture

I'm sorry. Was there somebody holding a gun to your head forcing you to read them?

Flakmeister's picture

Not at all... they are two topics that I relish debate on...I am blessed by an abundance of riches...

THE DORK OF CORK's picture

Does not look pretty , maybe its time for the Martians to escape


AnAnonymous's picture

Oh goody....


Oh bady...

Issue with the article is that China oil consumption can not be treated as the US oil consumption.

This is a US world order and the world is organized to allow US citizens in their current standard of life.

Chinese work quite a lot for US citizens and their oil consumption exist to maintain that feature.

Ultimately, the US oil consumption based on calculation within national borders could sink and sink while other areas of the world could see theirs increase but the oil consumption could still be done in order to support the US way of life.

Until the Chinese really start to consume oil for themselves and enable themselves in a Chinese way of life, nothing to be seen, only the US concealing their oil consumption by outsourcing it.

The US consumption of resources is vastly underestimated in this US world order as the world is organized to support US citizens in their lavish life style.

Accurate accounting should include all the oil consumption done by the Chinese (and the rest!) in order to provide the material conditions for the US way of life in the US.

Of course repelled by the US as it would show what blob the US is on the back of the rest of the world (not that the current figures are any good in this regard already)

trav7777's picture

Well, the headline notion that we have "46.2" years of oil reserves is horseshit.

Existing fields will not continue to produce at the peak rate until they are EMPTY.  Oil wells don't work like that.

Peak production on a well or field does not start at day 0 and proceed until complete depletion.

Production rises, hits a maximum, and then declines.  Extraction rates are not level.

DaveyJones's picture

their extraction analysis is almost as good as their safety record

tonyw's picture

It is unfortunate that in the ZH article up top that phrase is highlighted and suggests we can continue for another 46.2 years.

As you say production rises to a peak then falls, not a perfect bell curve but you get the picture. For sure BP know that but this ratio is always given and is a useful insight. Since around 1985 the ratio has been above 40 and below 50. Incidentally BP have been producing their excellent report for 60 years.


Caviar Emptor's picture

World proved oil reserves in 2010 were sufficient to meet 46.2 years of global production, down slightly


The trouble is cost of production. Both in terms of money and energy now.  If the oil is on the moon, it's gonna cost. Same way super deep water rigs, oil sands and new onshore technologies are expensive. There may be some soda pop at the bottom of that glass, but it takes a whole lotta sucking to get it up through that straw. 

SheepDog-One's picture

Throw in wars and turmoil in the places most of the oil comes from.

Oh regional Indian's picture

Indeed SD1.
And let us not forget Deepwater Horizon, an ongoing disaster.


redpill's picture

And at some point it costs more oil to get it than you yield. But the shit will have already hit the fan by then.

Dreadker's picture

Also that is AT CURRENT RATES.... 46.2 years factoring zero growth for the next 46.2 years on a global scale... Good luck with that oil dependent world lol

tmosley's picture

The US will be doing its part, as our economy is about to shrink by about 2/3rds, due to the economic consequences of MONETARY POLICY.

That will take a lot of pressure off.  Other than the US and India, most nations produce enough oil to meet their own needs.  When our economy collapses, we will once again be in the position of being a net energy exporter, more than likely.

LawsofPhysics's picture

"When our economy collapses, we will once again be in the position of being a net energy exporter, more than likely."

Yep, and we will either become wealthy again as a net energy exporter or become invaded.  Hedge accordingly.  Either way, with a fraudulent monetary and economic system and true price discovery and asset valuation being a total sham, possession of physical assets of real value (that can not be manipulated by harvard economists) will become the law.

IslandMan's picture


..."Most nations produce enough oil to meet their own needs."


tmosley - that is complete bullshit, and you know it.  Of the approx 190 nations, how many produce enough oil to meet their own needs ? 

Urban Redneck's picture

As the US goes bankrupt the rest of the world can world can buy more oil without increasing current aggregate consumption rates.  It won't keep up 46.2 years but it will last longer than USD hegemony. 

66Sexy's picture

Statistical analysis originating from an oil company (BP lulz) concerning oil futures, should not only be considered lies.. but damned lies.

ZH clearly has the pumps ON for oil.... have to wonder why.

Tyler Durden's picture

Because Goldman is "long"

plocequ1's picture

Im confused. I played this message backwards an heard I buried Paul

66Sexy's picture

In Goldman we trust?

Shouldn't we be thinking they are selling oil...

SheepDog-One's picture

Well you can believe theyre selling oil...I think its going up.

66Sexy's picture

a vast pool of derivative oil calls to choose from.

Tyler Durden's picture

Precisely. After taking on the Fed it may be time to take on the Squid

falak pema's picture

does this 46 year time line include non conventional oil reserves? Like Orenoco?

I can't see the graphic clearly on my comp!

Conrad Murray's picture

This brings great joy to me. Slaughter those pigs.

It's time to get in the streets people. MENA is doing their thing, and Europe is starting to get rolling. Are we going to let them show US how to protest? Yea yea, the sheep don't know better and won't get off their asses...unless they see other's doing it. The rage is in the air, just talk to anyone you know and see how angry they are( ). All it takes is a few leaders to show the masses the time is now.

scatterbrains's picture

Tha'ts what he is saying I think... if GS is short then lets pump oil as high as we can kinda thing.  lol

SheepDog-One's picture

Because its going up, 66Sexy.

That Peak Oil Guy's picture

BP's Statistical Review is actually the best compilation of worldwide energy data out there, despite their industry position.

Oil is oxygen to the economy, which is why ZH is so interested.


tmosley's picture

Wrong wrong wrong wrong wrong wrong.

Oxygen is oxygen to the economy.  Oil is food.  There are other types of food, but this one is a staple FOR NOW.  Just as charcoal once was, just as firewood once was, just as wheat once was (ie human labor).

Peak oilers LOVE to claim that oil is like oxygen, because there is NO replacement for oxygen.  But there ARE replacements for oil.  They might not be great, but we have lived without oil before, and we can do it again, if such drastic measures were necessary.  Just like we can live without wheat.  It might be difficult, and expensive, but it can be done.

Internet Tough Guy's picture

But we can't live without oil the way we live with oil. Many people have to go, also, since we are children of the oil age.

Texas Gunslinger's picture

and there is Tmosely-claven.....   straight out of the starting gate, flat on his face.

When did we live without oil?  What year?  What was the world population, US population and US GDP? 

This is yet another example of a goofy, archaic, anarchic mindset that has absolutely no relevance to modern economies and populations and growth of current scale. Then again, I don't really think Tmosely is a true anarcho-capitalist because he openly admits to living off of government grants and handouts. 



That Peak Oil Guy's picture

You're right, it is more like food.  But I am happy to see that you have come around a bit more on the whole peak oil subject since you first told me this.  :-)


Toxicosis's picture

Sure we can live without oil.  But not with a population of 7 billion.  One billion maybe, 7 not a chance.  We are a hydrocarbon dependent race, more than any other species combined.  Sure we can live without wheat, and I guess we can live without corn as well.  And then I guess we can live without meat, since they're ain't no corn to feed the chickens and cows there too pa.  Tmosley you are a true 'believing' troll, idealistic with fantastical delusions of grandeur.  To run modern societies requires extensive availability of hydrocarbon fuel.  Maybe we should just kill ourselves a few more whales to prove your point once we reach the $300-400 dollar mark in conventional and non-conventional oil, just so you're satisfied that replacements exist.  Hydrocarbon energy is not electricity.

This is a list of some of the products made from oil. Nearly everything in our lives is made from oil, made by machinery and systems dependent on oil, and transported by oil as either gas or diesel fuel.


Ammonia, Anesthetics, Antihistamines, Artificial limbs, Artificial Turf, Antiseptics, Aspirin, Auto Parts, Awnings, Balloons, Ballpoint pens, Bandages, Beach Umbrellas, Boats, Cameras, Candles, Car Battery Cases, Carpets, Caulking, Combs, Cortisones, Cosmetics, Crayons, Credit Cards, Curtains, Deodorants, Detergents, Dice, Disposable Diapers, Dolls, Dyes, Eye Glasses, Electrical Wiring Insulation, Faucet Washers, Fishing Rods, Fishing Line, Fishing Lures, Food Preservatives, Food Packaging, Garden Hose, Glue, Hair Coloring, Hair Curlers, Hand Lotion, Hearing Aids, Heart Valves, Ink, Insect Repellant, Insecticides, Linoleum, Lip Stick, Milk Jugs, Nail Polish, Oil Filters, Panty Hose, Perfume, Petroleum Jelly, Rubber Cement, Rubbing Alcohol,  Shampoo, Shaving Cream, Shoes, Toothpaste, Trash Bags, Upholstery, Vitamin Capsules, Water Pipes, Yarn


gorillaonyourback's picture

exactly, loose oil and its toast for the environment with this many people on it, we would be cutting trees down like mad men

Rusty Shorts's picture

yep, just like during the great depression, trees, the general enviroment, wildlife, all decimated.

Texas Gunslinger's picture

oops.  Just saw your post.  I said basically the same thing.  Sorry about repeating it. 


Citxmech's picture

This is also going to be the first time in human history where we will have to deal with future energy availability going down on a global basis.  Oil has/had the highest EROEI of any source in history.  Transitioning from the 21st Century to an 18th Cent. equivelent will be much harder than the ride up from the 18th to the 21st.

Look at the cultures that have had energy/resource collapses happen locally and you will see disaster after disaster [See Tainter, The Collapse of Complex Societies]. 

DaveyJones's picture

the collapse of complex societies...with simple minds

Good post

serndipity's picture

How can that be?

China makes TVs while Americans watch TVs.

baby_BLYTHE's picture

Prelude to WWIII.

ebworthen's picture


46 years of oil - then throw in mechanized food production, synthetic fertilizers and herbicides/pesticides, with the need for pumping/moving/purifying water - and WWIII over oil is inevitable.

TexDenim's picture

If you play games with reserves and FX rates, you can make a weak case that China will be world's largest economy before 2015. What does the world look like with America displaced as Number One? Not sure. US will remain the richest nation, in the sense that the average American has 10 times as much disposable income than Chinese, and that will not change for several more decades.

SheepDog-One's picture

'Income' wow that can change at the drop of a hat. 30% unemployment and americans have good wages? I guarantee that will change soon. 

DaveyJones's picture

"average American has 10 times as much disposable income" current exchange rates

tmosley's picture

EXACTLY.  Monetary games are coming to a close.  The paper that we have stored abroad will now swamp our shores once again, and we will have hyperinflation.

It looks like a "temporary", "technical" default has been added as one of the many triggers for this event, and it looks like its a hair trigger.

DaveyJones's picture

you mean you can't just keep promising people you'll give them something of value in exchange for their goods and labor?  

OutLookingIn's picture

Oil per-capita consumption.

India/China (Chindia) = 2 barrels per day per person.

U.S.A. = 25 barrels per day per person.

Now. Who is the largest user of oil? The one who uses the most? Or the one who uses the most per person?

North American's still live an unsustainable life style that is on borrowed time and is terminally ill. Using that much oil to support the life style to which we are accustomed, is a crisis looking for a happening! I think it's found a home!