World consumption of crude oil exceeded 100 million barrels in 2023 for the first time last year, while demand for coal rose to a record for the second straight year, according to the 2024 Statistical Review of World Energy, written jointly by the Energy Institute (EI), KPMG and Kearney.
The demand for energy in the developing world continued to rise last year, with the U.S. retaining its role as the largest supplier of oil and gas, and China remaining the dominant supplier of essential components for wind and solar energy, according to the report.
EI President Juliet Davenport described 2023 as “another year of highs in our energy hungry world.”
“2023 saw record consumption of fossil fuels and record emissions from energy, but also record generation of renewables, driven by increasingly competitive wind and solar energy,” Ms. Davenport said in the press release announcing the review.
China and India led the world in the construction of new coal plant capacity, overwhelming the reduction in coal use in Europe and the United States. And while wind and solar increased their share of the world’s energy supply slightly, they remain a bit player on the global stage.
Total worldwide energy consumption set a new record at 620 exajoules (EJ). One exajoule is equal to 277.8 terawatt hours of electricity, 23.88 million tons of oil, or 34.12 million tons of coal.
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By comparison, electricity consumption in the United States totaled 4,000 terawatt hours, or 14.4 EJ, a level that has barely increased over the past two decades.
Overall, fossil fuels continue to dominate global energy consumption, with oil, coal and natural gas comprising 81 percent of the total. Of the 620 EJ consumed worldwide, oil had the largest share at 196 EJ, or 32 percent. Coal had the second-largest share at 164 EJ, followed by natural gas at 144 EJ.
The category of “other renewables,” which includes wind and solar, accounted for 51 EJ, or 8 percent, of energy consumed worldwide.
Production and demand was robust in all of these markets.
Oil Trends
The price of Brent crude oil declined by 18 percent to $83 per barrel in 2023, but remained 29 percent above pre-Covid levels. At the same time, worldwide oil production hit a record 96 million barrels per day, with the U.S. remaining the world’s largest producer and increasing its output by 8 percent.As with other energy sources, Asia, and particularly China, were the growth engines for demand for oil.
While oil consumption increased slightly in the U.S. and fell 1 percent in Europe, demand increased by 5 percent in Asia. China was a major driver of this increase, as the demand for gasoline and diesel increased to 15 percent above pre-Covid levels with the country’s emergence from its zero-Covid lockdowns.
China edged out the United States last year as the world’s largest refiner of oil, measured in terms of capacity. However, American refineries continued to lead in terms of supplying consumers, given its higher capacity utilization rate.
Coal Trends
Worldwide production of coal hit a record 179 EJ in 2023, beating the previous record set in 2022. Consumption of coal likewise increased, hitting a record of 164 EJ.According to the Institute for Energy Research (IER), China leads the world in building new coal plants, accounting for 96 percent of global coal power capacity construction in 2023. India has also been building coal plants at an accelerating pace, with plans to add 14 gigawatts of coal capacity this year.
Last year, China and India each produced more coal-powered energy than the United States, which has not built a new coal plant in the past decade, IER reports. Currently, China uses nine times as much coal as the United States.
“While western nations are spending time and money to remake their entire energy systems to comply with climate policies,” the IER stated, “the two most populous countries—China and India—are busy building more coal plants to guarantee affordable and reliable energy to their people and businesses for decades to come.”
China remained the largest consumer of coal energy by far, accounting for 56 percent of the world’s coal consumption. India stepped up to second place in this category, consuming more coal in 2023 than North America and Europe combined for the first time.
The use of coal declined in North America and Europe, with a 10-year-old trend of aggressively retiring coal-fired power generation plants as these regions attempt to transition to dependence on intermittent wind and solar energy. This transition continues despite warnings from U.S. energy regulators that this will lead to blackouts and grid instability, as wind and solar depend on the weather while coal plants can be ramped up and down as needed.
Natural Gas
Production and consumption of natural gas was flat from 2022. The United States maintained its position as the world’s largest supplier, producing about 25 percent of the total, and overtaking Qatar as the biggest exporter of liquid natural gas (LNG).As with other energy sources, a decline in consumption of LNG in Europe was offset by growing demand in China, India and other Asian countries.
Wind and Solar
Wind and solar energy grew 67 percent, in terms of capacity, from 2022.China led the way, accounting for two-thirds of new wind capacity, matching the combined capacity of Europe and North America. Capacity does not necessarily match output, however, because the capacity factor, which measures the percentage of capacity that is typically used to produce electricity, is significantly lower for wind and solar, given their dependence on weather.
The U.S. Energy Department says the capacity factor for wind and solar is 35 and 25 percent, respectively, compared to 49 percent for coal, 54 percent for natural gas and 93 percent for nuclear. However, the capacity factor for wind and solar is artificially boosted, even from these low levels, because utilities often prioritize purchasing from wind and solar plants when they are able to produce, leaving other sources idle.
The price of essential minerals for wind, solar and batteries fell by an average of 26 percent in 2023, led by declines in cobalt. Three-quarters of the world’s cobalt is mined in Africa, mostly from strip mines in the Democratic Republic of Congo, often under toxic and unsafe conditions for miners.
Growing Dependence on China
In addition to its controlling role in the mining of many key minerals, including cobalt and lithium, China has a virtual stranglehold on the refining of minerals essential for solar panels, wind turbines and batteries.A 2022 report by the left-leaning Brookings Institution stated that “China currently controls most global critical minerals refining, and its upstream control of raw commodities is also increasing.”
In addition, authors Rodrigo Castillo and Caitlin Purdy wrote, China dominates worldwide manufacturing of EV batteries, wind turbines, solar panels, energy storage, and electric transmission.
“As things stand, the world is highly dependent on sourcing from China to advance the energy transition and meet decarbonization goals,” the authors stated.
