BP: US oil production growth hit record-high in 2012

The US recorded the largest single-year increase in oil production in 2012, according to the BP Statistical Review of World Energy. The review, released June 12, was the company's 62nd annual report.

Backed by increasing production of unconventional oil and gas, the US recorded the highest growth in both oil and natural gas output in 2012, BP said. Meanwhile, coal consumption in the US experienced the largest decline in 2012 as it was displaced by less-expensive natural gas in electric power generation.

According to BP, world nuclear output recorded the largest annual decline in 2012. After 2011's Fukushima accident, "higher imports of fossil fuels including [LNG] kept the lights on" in Japan. Due to higher natural gas prices in Europe, power generators substituted coal for gas—an opposite course from the US.

"For those of us in the energy industry, the challenges are about how we respond to the big shifts we are seeing—a shift in demand towards emerging economies and a shift in supply towards a greater diversity of energy sources, including unconventionals," said Bob Dudley, BP Group chief executive.

"The data show there is ample energy available," he said, adding, "Our challenge as an industry is to make the best choices about where to invest. We want to provide energy in ways that enable us to be both safe and competitive—deploying our strengths while reducing our risks, and managing our costs."

World energy consumption also dropped to 1.8% in 2012, down from 2.4% the previous year, BP reported. The decline was attributable to the economic slowdown as well as improved energy consumption efficiency due to high prices. As the major source of demand growth, emerging countries accounted for 56% of global consumption, up from 42% just 20 years ago.

Global oil consumption increased by 890,000 b/d, 0.9% below the historical average. OECD consumption declined by 1.3% (530,000 b/d) and non-OECD consumption grew by 3.3% (1.4 million b/d).

Global oil production climbed by 1.9 million b/d. Despite a decline in Iranian output due to international sanctions, OPEC contributed to about three quarters of the global increase. Non-OPEC production grew by 490,000 b/d with increases in the US, Canada, Russia, and China.

BP's review also stated that world natural gas consumption grew by 2.2%, below the historical average of 2.7%.