World Coal Output Fell by Record Amount in 2016, BP Says

Global coal production saw its largest decrease on record in 2016, as China and the U.S. dug up less of the commodity and burned less of it for electricity, BP PLC said in the U.K. oil and gas giant's annual energy review.

Coal made up only 28% of the world's energy production last year, its lowest level since 2004 and a reflection of what BP said was "marked shift toward lower-carbon fuels as renewable energy continues to grow strongly." BP, as a major producer of natural gas, stands to gain from less production of an energy source such as coal.

Global coal production fell 6.2%, the most ever recorded, said BP's Statistical Review of World Energy, a closely watched compendium of information about global energy trends. U.S. output declined 19% and Chinese production fell almost 8%.

President Donald Trump has made reviving the American coal industry a key tenet of his administration. He said he would pull the U.S. out of a global pact to limit carbon emissions because it would hurt industries like coal production, and his administration has moved to peel away regulations seen as harmful to the sector.

BP said coal production was declining along with demand for the commodity as the U.S., Europe and China all consume more natural gas and renewable energy sources. Coal consumption in the U.S. fell almost 9% in 2016 and nearly 2% in China, the world's largest producer and consumer of the commodity.

"The scales of the falls we have seen in coal over the last few years seems to me to signal a decisive break from the past," said Spencer Dale, BP's chief economist.

Renewables such as wind and solar power were the fastest-growing energy sources in 2016, BP said, increasing output by 12%. Renewables now provide just under 4% of the world's energy, up from 2.8% of global energy consumption in 2015, according to BP.

In a statement, BP Chief Executive Bob Dudley said a transition in energy markets was under way, although "it is not yet clear how much of this break from the past is structural and will persist."

BP said oil consumption continued to rise at a strong pace in 2016, up 1.6% in 2016, which was above the 10-year average. The company sees a peak in oil demand around 2040, when consumption will begin to fall globally.

Mr. Dale said the company doesn't believe oil-industry investment has contracted enough to cause a global supply shortage in the near future. Some industry leaders, including the International Energy Agency and the Organization of the Petroleum Exporting Countries, have warned that a lack of investment in new projects will eventually lead to less production and potentially price increases.

Mr. Dale said shale production was too resilient and OPEC's own reserves too large for a significant supply shortage.

"I am less worried than others," he said.

Write to Neanda Salvaterra at

(END) Dow Jones Newswires

June 13, 2017 13:59 ET (17:59 GMT)