The Primary Energy Tale of Two Continents

UK Secretary of State for Energy and Climate Change, Ed Davey, is worried about rising energy costs in Europe whilst energy costs in N America are going in the opposite direction. But he doesn’t seem to understand the root cause of the situation or how to tackle the problem.

  • Primary energy production peaked in Europe in 1996 at 1138 million tonnes oil (mmtoe) equivalent and has since fallen to 970 mmtoe in 2012. That is a drop of 15% (Figure 1)
  • In N America, primary energy production hit a new peak in 2012 of 2512 million tonnes oil equivalent. That is up 8.5% since 1996 (Figure 1)
  • Rising energy production in N America and falling Energy production in Europe lies at the heart of energy prices trading in opposite directions on either side of The Atlantic.
  • Europe has a population of ~ 739 million who produce 1.31 tonnes oil equivalent (toe) per capita per annum. N America has a population of ~ 529 million who produce 4.75 toe per capita per annum, 3.6 times more than Europe.

Figure 1 Primary energy production in Europe (right hand scale) and N America (left hand scale). Chart not zero scaled. Europe includes all countries reported by BP lying to the west of the Former Soviet Union. N America includes Mexico, USA and Canada.

Figure 2 Primary energy production in Europe peaked in 1996, marked by the arrow. Unilateral effort to combat CO2 emissions and global warming has resulted in significant growth of expensive, unreliable electricity (other renewables) that has partly offset decline in oil, gas, coal and nuclear that have been largely neglected on this side of the Atlantic. Every year, Europe must dip deeper into competitive global energy markets, sending prices higher.

Figure 3 Primary energy production in North America hit a new high in 2012. Shale oil, shale gas and oil sands production in N America underpins primary energy growth on that continent. Note how other renewables are relatively less important compared to Europe.

In an exclusive interview with The Independent newspaper Ed Davey is reported as follows:

….neither Labour leader Ed Miliband’s pledge to freeze energy prices for two years, nor a UK fracking boom, would reduce household bills.

Instead, he said there was an urgent need to build a giant network of electricity interconnectors across Europe, allowing vast amounts of energy to be moved between countries, driving down prices.

“Literally in the last three or four years, there has been a complete change in the differential between the North American price for gas and energy and the EU price for gas and energy,” he said. “That represents a strategic change in the terms of trade and is very significant. The EU needs to respond to this very quickly.”

It is in my opinion woefully misguided to believe that moving “vast amounts” of non-existent energy around the continent will solve anything. This is simply more hot air, blowing in the wind, while Europe’s poor suffer mounting energy poverty. European leaders and policy makers need to understand one simple point. There is an urgent need for the continent to produce vast amounts of new primary energy.

Options are at present limited to:

  1. Significant expansion of nuclear power
  2. Enhanced oil recovery in the North Sea
  3. Exploration for shale gas and oil

Other strategies that would make a difference are aggressive pursuit of energy efficiency measures, the abolition of climate change laws and CO2 reduction targets and the removal from office of Green politicians.

Other posts
LNG Heading East
UK North Sea Oil Production Decline
OECD oil production update July 2013
The changing face of UK electricity supply
Energiewende: Germany, UK, France and Spain

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17 Responses to The Primary Energy Tale of Two Continents

  1. Cassio says:

    Eminently good sense ! I plan to copy this to my MP.

  2. Hi Euan,

    Great post. For us in North America, another important factor for the future is that the Mexican government appears to be adopting a much more flexible approach to producing oil and gas by including foreign investors. This reflects the success of US and Canadian oil and gas production, but more importantly, a new maturity on the part of the Mexican legislators and voters.


    • Euan Mearns says:

      Dave, I still expect US shale gas production to go into reverse (since you stopped drilling shale gas) and for nat gas prices to rise until they are high enough to attract rigs away from the liquid plays.

      There are very different strategies being pursued either side of the pond. On this side, the plan is to build power lines to nowhere.

      I also need to renormalise my numbers to continent area – done that before, but don’t have numbers to hand. Europe is small and over populated. In the past, when we needed more land, we simply went out and got it 😉 Better watch out!

      Have a good 2014!


    • Roger Andrews says:

      Lost in the euphoria over the Mexican energy reform package is the fact that in 2012 Mexican legislators passed a climate change law that mandates a 30% cut in Mexico’s CO2 emissions by 2020 and a 50% cut by 2050. They haven’t said how they plan to meet these targets while at the same time expanding oil & gas production, but my prediction is that by 2020 they will all have conveniently forgotten about the climate change law.

  3. Roger Andrews says:

    Another way of looking at it:

    • Euan Mearns says:

      Roger, Great chart! I’ll copy it soon. Working up to a post on European energy security – but that’s a big job. Europe has flat imports, falling production = falling per capita consumption. We are doing our part to save the World! But it has meant sacrificing parts of periphery. Maybe Springtime is coming to Greece and Portugal?

  4. Go NA go! Onward and Upward!

  5. Joe Public says:

    Hi Euan

    “Europe has a population of ~ 739 million who produce 1.31 mmtoe per capita per annum. N America has a population of ~ 529 million who produce 4.75 mmtoe per capita per annum, …..”


    The million tons of oil equivalent acronym = MTOE / Mtoe.

    If 739 million people produce 970 Mtoe, then per capita production is 1.31 tons oil equivalent.

  6. A C Osborn says:

    Euan, moving energy USES energy, they just don’t get that either. Ed Davey lives in Greenworld where you just have to make green wishes to make it all come right.
    They have no concept of the Industries they are glibly talking about.
    How is it that so many of the rest of us in the UK can see the problems and they can’t?

    Your analysis is great, it also shows how little real impact the vast investment in Renewable Energy has had in both continents, but Europe has more and is really paying for it in their energy prices, along with reliance on Gazprom as you noted.

  7. zaphod42 says:

    I have asked this question on more than one site… why are we talking about continuing and not about changing fundamentally how we ‘earn our living’ on our single small planet? And, no about how many homo spaiens sapiens are trotting about the landscape?

    I don’t know if we can crash the entire population from excess; I do know it is a question we should not seriously test. Consider the reindeer:


  8. Great graphs as usual – Thanks Euan

  9. troe says:

    Informative site. Thanks

  10. Bernard Durand says:

    Euan, 729 millions inhabitants for Europe? As far as I know, EU 28 is around 520 millions. What are the other countries ? Roger, could you translate your curves in billions of euros?

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