BP published Tuesday its latest annual statistical review of energy, where the company said it was unfazed by falling global oil reserves but sounded a warning signal on CO2 emissions from China's booming, coal-fired economy.
According to the industry-respected review, world oil reserves dipped slightly last year, a mere 1 billion barrels or 0.1% to 1.208 trillion barrels.
Some observers pointed to the fact that it was the first time in 10 years that the oil reserves figure fell. But BP choose to dismiss that, pointing to more than 40 years' production life and the likelihood of later upward revisions as more up-to-date data becomes available.
One point made by BP's chief economist was that although the world's oil reserves are not falling dramatically, higher upstream costs and growing state control of national resources are making the access to and profitably of developing the reserves more of a variable.
More of a concern, BP said, was the soaring use of coal-fired power generation by China, whose economy continues to grow at breakneck speed. Coal was the fastest growing fuel in 2006 for the fourth year running with China accounting for 70% of the fuel's global demand growth.
Largely as result of Chinese coal use, global CO2 emissions grew 2.6% last year and that's despite slowing energy demand growth of 2.4% in 2006. This trend is likely to continue, BP said, until a global carbon price and emission market is established, tempering demand for more polluting fuels.
On renewables, BP was largely dismissive of ethanol (which grew 20% in production terms) and other biofuels, saying that outside government taxes breaks they will not make a significant impact of oil demand until better technology can be harnessed to make them cheaper and cleaner to produce. Here BP is referring to the holy grail of biofuels, cellulosic ethanol and their next gen alternatives made from low-lignin hybrid biomass. But that would be at least 10 years away, BP said.
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