International Energy Outlook 2009: World marketed energy consumption is projected to rise by 44 percent from 2006 to 2030. Total energy demand in the non-OECD countries increases by 73 percent, compared with an increase of 15 percent in the OECD* countries. Unconventional sources including biofuels could provide nearly half of the growth in global liquid fuel supplies during 2006-30 and global emissions of the main greenhouse gas carbon dioxide will jump more than 39 percent by 2030, without new policies and binding pacts to cut global warming pollution.
The Energy Information Administration (EIA) of the US Department of Energy this week issued its latest International Energy Outlook (IEO2009) and its forecast base reference case, which does not assume any changes from current policies, shows worldwide demand for liquids and other forms of petroleum could rise from 85 million b/d in 2006 to 91 million b/d in 2015 and to 107 million b/d in 2030.
In the IEO2009 reference case—which reflects a scenario in which current laws and policies remain unchanged throughout the projection period—world marketed energy consumption is projected to grow by 44 percent over the 2006 to 2030 period. The current worldwide economic downturn dampens world demand for energy in the near term, as manufacturing and consumer demand for goods and services slows. In the longer term, with economic recovery anticipated after 2010, most nations return to trend growth in income and energy demand.
The most rapid growth in energy demand from 2006 to 2030 is projected for nations outside the Organisation for Economic Cooperation and Development (non-OECD nations). Total non-OECD energy consumption increases by 73 percent in the IEO2009 reference case projection, as compared with a 15-percent increase in energy use among the OECD countries. Strong long-term GDP growth in the emerging economies of the non-OECD countries drives the fast-paced growth in energy demand. In all the non-OECD regions combined, economic activity—measured by GDP in purchasing power parity terms—increases by 4.9 percent per year on average, as compared with an average of 2.2 percent per year for the OECD countries.
The IEO2009 reference case projects increased world consumption of marketed energy from all fuel sources over the 2006 to 2030 projection period. Fossil fuels (liquid fuels and other petroleum,1 natural gas, and coal) are expected to continue supplying much of the energy used worldwide. Liquids supply the largest share of world energy consumption over the projection period; however, their share falls from 36 percent in 2006 to 32 percent in 2030, as projected high world oil prices lead many energy users, especially in the industrial and electric power sectors, to switch away from liquid fuels when feasible.
The EIA says average world oil prices2 increased each year between 2003 and 2008. Spot prices reached $147 per barrel (in nominal dollars) in mid-July 2008, when they were well above the historical inflation-adjusted record price for a barrel of oil, which was set in the early 1980s. After reaching the July 2008 high mark, however, prices fell sharply. As the world’s economies recover, world oil prices are assumed to rebound and rise in real terms through 2030. In the IEO2009 reference case, the price of light sweet crude oil in the United States (in real 2007 dollars) rises from $61 per barrel in 2009 to $110 per barrel in 2015 and $130 per barrel in 2030.
World Energy Use by Fuel Type
Liquids are expected to remain the world’s dominant energy source throughout the IEO2009 reference case projection, given their importance in the transportation and industrial end-use sectors. World use of liquids and other petroleum grows from 85 million barrels per day in 2006 to 91 million barrels per day in 2015 and 107 million barrels per day in 2030. Only in the transportation sector are liquids relatively unaffected by the projected high world oil prices. Although world oil prices in 2030 in the IEO2009 reference case are 80 percent higher than projected in IEO2008, liquids consumption in the world transportation sector in 2030 is only 9 percent lower in this year’s outlook, reflecting the expectation that, absent significant technological advances, liquids will continue to be the primary energy source in the world’s transportation sector.
To meet the increment in world liquids demand in the IEO2009 reference case, total supply in 2030 is projected to be 22.0 million barrels per day higher than the 2006 level of 84.6 million barrels per day. The reference case assumes that OPEC will maintain a share of approximately 40 percent of total world liquids production through 2030, consistent with recent trends. Increasing volumes of conventional liquids (crude oil and lease condensate, natural gas plant liquids, and refinery gain) from OPEC members contribute 8.2 million barrels per day to the total increase in world liquids production, and conventional liquids supplies from non-OPEC countries add another 3.4 million barrels per day.
Unconventional resources (including oil sands, extra-heavy oil, biofuels, coal-to-liquids, and gas-to-liquids) from both OPEC and non-OPEC sources are expected to become increasingly competitive in the reference case. World production of unconventional resources, which totaled only 3.1 million barrels per day in 2006, increases to 13.4 million barrels per day and accounts for 13 percent of total world liquids supply in 2030.
The EIA says biofuels, including ethanol and biodiesel, will be an increasingly important source of unconventional liquids supply, reaching 5.9 million barrels per day in 2030. Particularly strong growth in biofuels consumption is projected for the United States, where production of biofuels increases from 0.3 million barrels per day in 2006 to 1.9 million barrels per day in 2030, supported by legislation in the Energy Independence and Security Act of 2007 that mandates increased US use of biofuels. Other regions with sizable projected increases in biofuels production include OECD Europe, non-OECD Asia, and Central and South America. Those regions, together with the United States, account for 75 percent of the world increase in biofuels production.
Natural gas consumption worldwide increases in the IEO2009 reference case from 104 trillion cubic feet in 2006 to 153 trillion cubic feet in 2030. With world oil prices rebounding from their early 2009 level, as the world economy recovers from the current downturn, and then continuing to grow in real terms through the end of the projection period, consumers opt for comparatively less expensive natural gas for their energy needs whenever possible. As a result, natural gas remains a key energy source in the industrial sector and for electricity generation. The industrial sector currently consumes more natural gas than any other end-use sector, and this is expected to remain true in the reference case through 2030, when 40 percent of the world’s natural gas supply is used for industrial purposes. Electricity generation accounts for 35 percent of the world’s total natural gas consumption in 2030, up from 32 percent in 2006.
The EIA says in the absence of national policies and/or binding international agreements that would limit or reduce greenhouse gas emissions, world coal consumption is projected to increase from 127 quadrillion Btu (British thermal unit) in 2006 to 190 quadrillion Btu in 2030, an average annual rate of 1.7 percent. Much of the projected increase in coal use occurs in the non-OECD Asia region, which accounts for nearly 90 percent of the total world increase in coal use from 2006 to 2030. In fact, much of the region’s increase in energy demand is expected to be met by coal, particularly in the electric power and industrial sectors. For example, installed coal-fired generating capacity in China is projected to nearly triple from 2006 to 2030, and coal use in China’s industrial sector grows by nearly 60 percent. The development of China’s electric power and industrial sectors will require not only large-scale infrastructure investments but also substantial investment in both coal mining and coal transportation infrastructure.
World net electricity generation increases by 77 percent in the reference case, from 18.0 trillion kilowatt hours in 2006 to 23.2 trillion kilowatt hours in 2015 and 31.8 trillion kilowatt hours in 2030. Although the current economic downturn is expected to dampen electricity demand in the near term, the IEO2009 reference case assumes that growth in electricity demand will return to trend after 2010. In general, the growth in OECD countries, where electricity markets are well established and consuming patterns are mature, is slower than in the non-OECD countries, where a large amount of potential demand remains unsatisfied. In the reference case, total net generation in the non-OECD countries increases by an average of 3.5 percent per year, compared with an average of 1.2 percent per year in the OECD nations.
The EIA says the rapid increase in world energy prices from 2003 to 2008, combined with concerns about the environmental consequences of greenhouse gas emissions, has led to renewed interest in the development of alternatives to fossil fuels. With high world oil prices expected to return and growth in demand for liquids and other energy expected to resume when economies begin to recover from the current global downturn, renewable energy is the fastest-growing source of world electricity generation in the IEO2009 reference case, supported both by the expected high prices for fossil fuels and by government incentives for the development of alternative energy sources.
From 2006 to 2030, world renewable energy use for electricity generation grows by an average of 2.9 percent per year, and the renewable share of world electricity generation increases from 19 percent in 2006 to 21 percent in 2030.3 Natural gas and coal are the second and third fastest-growing energy sources for electricity generation in the projection; however, the outlook for coal, in particular, could be altered substantially by any future legislation that would reduce or limit the growth of greenhouse gas emissions.
Much of the world increase in renewable electricity supply is fueled by hydropower and wind power. Of the 3.3 trillion kilowatt hours of new renewable generation added over the projection period, 1.8 trillion kilowatt hours (54 percent) is attributed to hydropower and 1.1 trillion kilowatt hours (33 percent) to wind. Except for those two sources, most renewable energy technologies are not economically competitive with fossil fuels over the projection period, outside a limited number of niche markets. Solar power, for instance, typically is uneconomical but can be economical where electricity prices are high and government incentives are available.
The EIA says government incentives or policies typically provide the primary support for construction of any renewable generation facilities.
The mix of renewable fuels consumed differs between the OECD and non-OECD regions in the IEO2009 reference case projection. In the OECD nations, the majority of economically exploitable hydroelectric resources already have been used, and there are few large-scale hydroelectric power projects planned for the future. As a result, most of the growth in renewable energy use in the OECD countries is expected for other sources, led by wind and biomass. In the non-OECD nations, hydropower is the predominant source of renewable energy growth, with mid- to large-scale hydroelectric plants expected to be completed in China, India, Brazil, and a number of nations in Southeast Asia, including Vietnam and Laos. Wind-powered electricity generation also is expected to grow significantly in the non-OECD countries, including substantial additions of wind electricity to the grid in China.
Electricity generation from nuclear power is projected to increase from about 2.7 trillion kilowatt hours in 2006 to 3.8 trillion kilowatt hours in 2030, as concerns about rising fossil fuel prices, energy security, and greenhouse gas emissions support the development of new nuclear generation capacity. Higher fossil fuel prices allow nuclear power to become economically competitive with generation from coal, natural gas, and liquids despite the relatively high capital and maintenance costs associated with nuclear power plants. Moreover, higher capacity utilisation rates have been reported for many existing nuclear facilities, and it is anticipated that most of the older nuclear power plants in the OECD countries and non-OECD Eurasia will be granted extensions to their operating lives.
Despite the growing worldwide interest in nuclear power development, there is considerable uncertainty associated with this energy source. Issues that could slow the expansion of nuclear power in the future include plant safety, radioactive waste disposal, and concerns that weapons-grade uranium may be produced from facilities installed to enrich uranium for civilian nuclear power programs. These issues continue to raise public concerns in many countries and may hinder the development of new nuclear power reactors. Nevertheless, the IEO2009 reference case incorporates the improved prospects for world nuclear power. The IEO2009 projection for nuclear electricity generation in 2025 is 25 percent higher than the projection published in IEO2004 only 5 years ago.
On a regional basis, the IEO2009 reference case projects the strongest growth in nuclear power for the countries of non-OECD Asia, where nuclear power generation is projected to grow at an average rate of 7.8 percent per year from 2006 to 2030. Nuclear generation is projected to increase by 8.9 percent per year in China and by 9.9 percent per year in India. Outside Asia, the largest increase in installed nuclear capacity among the non-OECD nations is projected for Russia, with increases in nuclear power generation averaging 3.5 percent per year. In contrast, OECD Europe—where some national governments, including Germany and Belgium, still have plans in place to phase out nuclear programs entirely—is expected to see a small decline in nuclear power generation.
World Carbon Dioxide Emissions
World carbon dioxide emissions are projected to rise from 29.0 billion metric tons in 2006 to 33.1 billion metric tons in 2015 and 40.4 billion metric tons in 2030—an increase of 39 percent over the projection period. With strong economic growth and continued heavy reliance on fossil fuels expected for most of the non-OECD economies, much of the increase in carbon dioxide emissions is projected to occur among the developing, non-OECD nations. In 2006, non-OECD emissions exceeded OECD emissions by 14 percent. In 2030, however, non-OECD emissions are projected to exceed OECD emissions by 77 percent .
*The 30 member countries of OECD are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.
1 Liquid fuels and other petroleum include petroleum-derived fuels and non-petroleum-derived fuels, such as ethanol and biodiesel, coal-to-liquids, and gas-to-liquids. Petroleum coke, which is a solid, is included. Also included are natural gas liquids, crude oil consumed as a fuel, and liquid hydrogen.
2 The world oil price reported in IEO2009 is for light sweet crude oil delivered to Cushing, Oklahoma. This price series is consistent with spot prices for light, sweet crude oil reported on the New York Mercantile Exchange (NYMEX). All oil prices are in real 2007 dollars per barrel, unless otherwise noted.
3 The IEO2009 reference case does not reflect the provisions of American Recovery and Reinvestment Act of 2009 (the $787 stimulus program, which was enacted in February). In 2030, US renewable electricity generation in the published reference case accounts for 14.2 percent of total US net generation; but in the updated reference case, renewables account for 15.8 percent of total US net generation in 2030, or about 67 billion kilowatt hours more than projected in the published reference case.
