BPs annual Statistical Review of World Energy for 2009, its 58th, was published this week, a collection of valuable statistics accompanied by press briefings and the regular anodyne platitude.

According to BP, 2008 experienced a small decline in global annual oil consumption of 0.6% (which, despite the Independent’s claim, was by no means the first in 15 years). There was, however, a slim rise in production, so stocks have presumably built up a little. Although OECD countries still account for more than half of consumption, they burned 3% less than they did in 2007, while emerging economies burned 3% more. Oil production outside OPEC fell by 1.4%, the largest decline since 1992; step forward USA, Canada, Mexico, Norway, UK and Russia (for the first time since 1998), with a total decline of almost 800 thousand b/d. A production decline, when world prices were at a record, is a real decline. OPEC’s share of global production rose by 2.7% to nearly 45%. Will OPEC grasp us by the hand or by the throat, we wonder?

“Proved” reserves did something interesting too; they fell, for the first time (in BP’s view) since 1998. The drop was just 3 billion barrels, or 10% of global annual production, and OPEC’s claims concerning proved reserves have long been challenged anyway, but all the same it is an interesting development. Even Saudi Arabia registered a tiny fall. The Guardian blamed this on reduced investment, but we disagree, because that investment reduction didn’t bite hard until this year. OPEC now owns 76% of the world’s proved reserves, up from 75.5%, making it that little bit harder for BP and its cousins to maintain their place in the oil world.

The accompanying narrative from Dr Tony Hayward, BP’s Group Chief Executive notes the probable role of energy prices in precipitating the 2008 financial crisis and subsequent recession. 2008 was the seventh successive year when the annual oil price rose, a first; BP reportedly needs a price of about $55/bbl to avoid increasing its debts. Renewables are still a very minor and still-subsidised player in the global energy scene, but Hayward sees the beginnings of a significant impact. Ethanol production rose by 31%.

Then comes the platitude: “The world has enough proved reserves of oil…to meet the world’s needs for decades to come.” ODAC repeats now what we have said before and will doubtless still be repeating when the peak is finally recognised, which is this: the quantity of oil is not the problem, it’s the rate at which it can be extracted, given that most fields are already in decline, and the rate of new oil discovery is nowhere near the rate of production.

Hayward’s spoken comments to the press are also interesting. For example, he observes that the developing world will require more energy as it industrialises, but oil demand in developed countries may have peaked. Dr Hayward believes that BP sales of conventional petrol peaked forever in the US in the first half of 2008. The reason given is increased energy efficiency and the growth of biofuels, but we wonder whether the higher cost of crude oil is also a factor. Are we approaching the point where expensive oil will still be available but the west can’t afford the price? UK oil production is in for a torrid time, with annual falls of at least 5%, or even more if investment is with-held.

Furthermore, if, as Hayward notes, renewables are becoming globally significant, what is his company’s position? BP is reported to be cutting investment by one to two thirds this year, and losing the division’s chief executive, Vivienne Cox. The company is abandoning wind power outside the US and closing many solar power manufacturing facilities. There are also doubts about BP’s joint venture with D1 Oils for producing biodiesel from jatropha. Doubtless these cuts will all be good for BP’s shorter term bottom line, but perhaps not so healthy for BP or anyone else if it means a misplaced, longer-term reliance on dwindling fossil fuels.

The Review can be downloaded from BP’s web-site, or, to order a printed copy, go here.

Dr. Richard Miller is an Independent Consultant, and former geochemist for the BP Exploration Department