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Highlights World marketed energy consumption is projected to increase…
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Created: Fri Jun 20 13:59:08 2008
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Highlights
World marketed energy consumption is projected to increase by 50 percent
from 2005 to 2030. Total energy demand in the non-OECD countries increases
by 85 percent, compared with an increase of 19 percent in the OECD countries.
In the IEO2008 reference case--which reflects a scenario The IEO2008 reference case projects increased world
where current laws and policies remain unchanged consumption of marketed energy from all fuel sources
throughout the projection period--world marketed over the 2005 to 2030 projection period (Figure 2). Fossil
energy consumption is projected to grow by 50 percent fuels (liquid fuels and other petroleum,1 natural gas, and
over the 2005 to 2030 period. Total world energy use coal) are expected to continue supplying much of the
rises from 462 quadrillion British thermal units (Btu) in energy used worldwide. Liquids supply the largest
2005 to 563 quadrillion Btu in 2015 and then to 695 qua- share of world energy consumption over the projection
drillion Btu in 2030 (Figure 1). Global energy demand period, but their share falls from 37 percent in 2005 to 33
grows despite the sustained high world oil prices that percent in 2030, largely in response to a reference case
are projected to persist over the long term. scenario in which world oil prices are expected to
remain relatively high.
The most rapid growth in energy demand from 2005 to
2030 is projected for nations outside the Organization for Average world oil prices in every year since 2003
Economic Cooperation and Development (non-OECD have been higher than the average for the previous
nations). Total non-OECD energy demand increases by year. Prices in 2007 were nearly double the 2003 prices
85 percent in the IEO2008 reference case projection, as in real terms. Prices rose further into the third quarter
compared with an increase of 19 percent in OECD of 2008, peaking at $147 per barrel in mid-July, when
energy use. The robust growth in demand among the they were well above the historical inflation-adjusted
non-OECD nations is largely the result of strong pro- record price for a barrel of oil set in the early 1980s. A
jected economic growth. In all the non-OECD regions variety of factors have caused oil prices to increase,
combined, economic activity--as measured by GDP in including strong demand growth in non-OECD Asia
purchasing power parity terms--increases by 5.2 per- and the Middle East, no growth in production since
cent per year on average, as compared with an average 2005 from the members of the Organization of the
of 2.3 percent per year for the OECD countries. Petroleum Exporting Countries (OPEC), rising costs for
Figure 1. World Marketed Energy Consumption, Figure 2. World Marketed Energy Use by Fuel
2005-2030 Type, 1980-2030
Quadrillion Btu Quadrillion Btu
800 250
Non-OECD History Projections
695
652
OECD 608 200
600 563
513
462 150 Liquids
400
100 Coal
200 Natural Gas Renewables
50
Nuclear
0 0
2005 2010 2015 2020 2025 2030 1980 1995 2005 2015 2030
Sources: 2005: Energy Information Administration (EIA), Sources: 2005: Energy Information Administration (EIA),
International Energy Annual 2005 (June-October 2007), web International Energy Annual 2005 (June-October 2007), web
site www.eia.doe.gov/iea. Projections: EIA, World Energy site www.eia.doe.gov/iea. Projections: EIA, World Energy
Projections Plus (2008). Projections Plus (2008).
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.
Energy Information Administration / International Energy Outlook 2008 1
oil exploration and development, across-the-board in- liquids share of world energy consumption declines
creases in commodity prices, and a weaker U.S. dollar. through 2030, however, as other fuels replace liquids
where possible. In most regions of the world, the role of
In the IEO2008 reference case, prices ease somewhat in liquid fuels outside the transportation sector continues
the medium term, as anticipated new production--both to be eroded. Liquids remain the most important fuels
conventional and unconventional (in Azerbaijan, Brazil, for transportation, because there are few alternatives
Canada, Kazakhstan, and the United States, for exam- that can compete widely with liquid fuels. On a global
ple)--reaches the marketplace. Ultimately, however, basis, the transportation sector accounts for 74 percent of
markets are expected to remain relatively tight. In nomi- the total projected increase in liquids use from 2005 to
nal terms, world oil prices in the IEO2008 reference case 2030, with the industrial sector accounting for virtually
decline from current high levels to around $70 per barrel all of the remainder.
in 2015, then rise steadily to $113 per barrel in 2030 ($70
per barrel in inflation-adjusted 2006 dollars). To meet the increment in world liquids demand in the
IEO2008 reference case, total supply in 2030 is projected
In addition to the reference case, IEO2008 includes a to be 28.2 million barrels per day higher than the 2005
high price case that helps to quantify the uncertainly level of 84.3 million barrels per day. The reference case
associated with long-term projections of future oil assumes that OPEC producers will choose to maintain
prices. In the high price case, world oil prices in 2030--at their market share of world liquids supply, and that
$186 per barrel in nominal terms--are nearly 65 percent OPEC member countries will invest in incremental pro-
higher than projected in the reference case (Figure 3). duction capacity so that their conventional oil produc-
Given current market conditions, it appears that world tion represents approximately 40 percent of total global
oil prices are on a path that more closely resembles the liquids production throughout the projection.
projection in the high price case than in the reference Increasing volumes of conventional liquids (crude oil
case. With higher world oil prices slowing the growth of and lease condensates, natural gas plant liquids, and
demand in the long term, world liquids consumption in refinery gain) from OPEC members contribute 12.4 mil-
the high price case totals only 99.3 million barrels per lion barrels per day to the total increase in world liquids
day in 2030, 13 million barrels per day lower than in the production, and conventional liquids supplies from
reference case. non-OPEC countries add another 8.6 million barrels per
day (Figure 4).
Liquids are expected to remain the world's dominant
energy source throughout the IEO2008 reference case Unconventional resources (including oil sands, extra-
projection, given their importance in the transportation heavy oil, biofuels, coal-to-liquids, and gas-to-liquids)
and industrial end-use sectors. World use of liquids and from both OPEC and non-OPEC sources are expected to
other petroleum grows from 83.6 million barrels oil become increasingly competitive in the reference case.
equivalent per day in 2005 to 95.7 million barrels per day World production of unconventional resources, which
in 2015 and 112.5 million barrels per day in 2030. The totaled only 2.5 million barrels per day in 2005, increases
to 9.7 million barrels per day in 2030, accounting for 9
Figure 3. World Oil Prices in Two Cases, 1980-2030
Nominal Dollars per Barrel
Figure 4. World Liquids Production, 2005-2030
200 Million Barrels Oil Equivalent per Day
History Projections 125
High Price Case
150 100
Total
100 75
Non-OPEC Conventional
50
Reference Case
50
OPEC Conventional
25
Unconventional
0
1980 1995 2007 2015 2030 0
2005 2010 2015 2020 2025 2030
Sources: History: Energy Information Administration (EIA),
International Energy Annual 2005 (June-October 2007), web Sources: 2005: Energy Information Administration (EIA),
site www.eia.doe.gov/iea. Projections: EIA, Annual Energy International Energy Annual 2005 (June-October 2007), web
Outlook 2008, DOE/EIA-0383(2008) (Washington, DC, June site www.eia.doe.gov/iea. Projections: EIA, Generate World
2008), web site www.eia.doe.gov/oiaf/aeo. Oil Balance Model (2008).
2 Energy Information Administration / International Energy Outlook 2008
percent of total world liquids supply in 2030 on an oil combined increases by 21.0 trillion cubic feet between
equivalent basis. Biofuels, including ethanol and 2005 and 2030, but their combined demand for natural
biodiesel, will be an increasingly important source of gas increases by only 9.9 trillion cubic feet. Significant
unconventional liquids supplies, largely because of the increases in natural gas production are also projected for
growth in U.S. biofuels production. In the IEO2008 refer- the countries of non-OECD Asia, but those supply
ence case, the United States accounts for nearly one-half increases are expected to be used largely for consump-
of the rise in world biofuels production, at 1.2 million tion within the region rather than for export.
barrels per day in 2030.
In the absence of national policies and/or binding inter-
The composition of supply differs substantially between national agreements that would limit or reduce green-
the reference and high price cases. High prices encour- house gas emissions, world coal consumption is
age the development of previously uneconomical projected to increase from 123 quadrillion Btu in 2005 to
unconventional supplies, which account for a much 202 quadrillion Btu in 2030, at an average annual rate of
larger portion of total liquids supply than in the refer- 2.0 percent. Coal's share of world energy use has
ence case in 2030 (nearly 20 percent, as compared with increased sharply over the past few years, largely
about 9 percent in the reference case). Conventional sup- because of strong increases in coal use in China, which
plies decline over the projection period in the high price has nearly doubled since 2000 and is poised to increase
case, by 1.5 million barrels per day, compared with an strongly in the future. With its large domestic base of
increase of 21.0 million barrels per day in the reference coal resources and continuing strong economic growth,
case. The high price case assumes that OPEC member China alone accounts for 71 percent of the increase in
countries will maintain their production at near current world coal consumption in the IEO2008 reference case.
levels. As a result, OPEC is willing, in this case, to sacri- The United States and India--both of which also have
fice market share as global demand for liquids continues extensive domestic coal resources--each account for 9
to grow. The high price case also assumes that oil percent of the world increase.
resources in non-OPEC countries will be less accessible
and/or more expensive than in the reference case. World net electricity generation nearly doubles in the
IEO2008 reference case, from about 17.3 trillion
Worldwide natural gas consumption in the IEO2008 ref- kilowatthours in 2005 to 24.4 trillion kilowatts in 2015
erence case increases from 104 trillion cubic feet in 2005 and 33.3 trillion kilowatthours in 2030. Non-OECD
to 158 trillion cubic feet in 2030. Natural gas is expected developing countries show the strongest growth in elec-
to replace oil wherever possible. Moreover, because nat- tricity demand as they expand their power grids to sup-
ural gas combustion produces less carbon dioxide than port sustained robust economic growth. Total electricity
coal or petroleum products, governments may encour- generation in the non-OECD countries increases by an
age its use to displace the other fossil fuels as national or average of 4.0 percent per year from 2005 to 2030, as
regional plans to reduce greenhouse gas emissions compared with a projected average increase of 1.3 per-
begin to be implemented. Natural gas is expected to cent per year for OECD electricity generation.
remain a key energy source for industrial sector uses
and electricity generation throughout the projection Figure 5. World Natural Gas Production, 2005-2030
period. The industrial sector, which is the world's larg- Trillion Cubic Feet
est consumer of natural gas, accounts for 43 percent of 250
projected natural gas use in 2030. In the electric power OECD Africa
sector, natural gas is an attractive choice for new gener- Non-OECD Europe/Eurasia Middle East
200
ating plants because of its relative fuel efficiency. Elec- Central and South America Non-OECD Asia
tricity generation accounts for 35 percent of the world's
total natural gas consumption in 2030. 150
Much of the world's growing demand for natural gas is 100
projected to be met by increased production from
non-OECD nations. In the IEO2008 reference case, non-
OECD countries account for more than 90 percent of the 50
world's total growth in production from 2005 to 2030
(Figure 5). A significant portion of the non-OECD pro- 0
duction (excluding Russia and the other nations of Eur- 2005 2010 2015 2020 2025 2030
asia) is expected to be in the form of export projects-- Sources: 2005: Energy Information Administration (EIA),
particularly liquefied natural gas (LNG) projects. The International Energy Annual 2005 (June-October 2007), web
Middle East and Africa are at the forefront of the trend site www.eia.doe.gov/iea. Projections: EIA, World Energy
toward LNG: natural gas production in the two regions Projections Plus (2008).
Energy Information Administration / International Energy Outlook 2008 3
Coal and natural gas account for the largest increments Electricity generation from nuclear power is projected to
in fuel consumption for electricity generation over the increase from about 2.6 trillion kilowatthours in 2005 to
projection period. The 3.1-percent projected annual 3.8 trillion kilowatthours in 2030, as concerns about ris-
growth rate for coal-fired electricity generation world- ing fossil fuel prices, energy security, and greenhouse
wide is exceeded only by the 3.7-percent rate for natural- gas emissions support the development of new nuclear
gas-fired generation (Figure 6). Sustained high prices for generation. Higher capacity utilization rates have been
oil and natural gas make coal-fired generation more reported for many existing nuclear facilities, and it is
attractive economically, especially for coal-rich nations anticipated that most of the older nuclear power plants
like China, India, and the United States. in the OECD countries and non-OECD Eurasia will be
granted extensions to their operating lives. Still, there is
The outlook for fossil-fuel-fired generation could be
considerable uncertainty associated with nuclear power.
altered substantially by international agreements to
reduce greenhouse gas emissions. The electric power
Issues that could slow the expansion of nuclear power in
sector offers some of the most cost-effective opportuni-
the future include plant safety, radioactive waste dis-
ties for reducing carbon dioxide emissions in many
posal, and the proliferation of nuclear weapons, which
countries. Coal--the world's most widely used source of
continue to raise public concerns in many countries and
energy for power generation--is also the most carbon-
may hinder the development of new nuclear power
intensive. If a cost, either implicit or explicit, were
reactors. Moreover, high capital and maintenance costs
applied to emitters of carbon dioxide, there are several
may keep some nations from expanding their nuclear
alternative no- or low-emission technologies that cur-
power programs. Nevertheless, the IEO2008 reference
rently are commercially proven or under development,
case incorporates the improved prospects for world
which could be used to replace some coal-fired genera-
nuclear power. The IEO2008 projection for nuclear elec-
tion. Implementing the technologies would not require
tricity generation in 2025 is 31 percent higher than the
expensive, large-scale changes in the power distribution
projection published in IEO2003 only 5 years ago.
infrastructure or in electricity-using equipment.
It could be more difficult, however, to achieve similar In the IEO2008 reference case, the world's installed
results in the end-use sectors. In the transportation sec- nuclear capacity grows from 374 gigawatts in 2005 to 498
tor, for instance, large-scale reduction of carbon dioxide gigawatts in 2030. Declines in nuclear capacity are pro-
emissions probably would require extensive changes in jected only for OECD Europe, where several countries
the motor vehicle fleet, fueling stations, and fuel distri- (including Germany and Belgium) have either plans or
bution systems, at tremendous expense. In contrast, sub- mandates to phase out nuclear power, and where some
stitution of nuclear power and renewables for fossil older reactors are expected to be retired and not
fuels in the electric power sector would be a compara- replaced. On a regional basis, IEO2008 projects the
tively inexpensive way to reduce emissions, as would strongest growth in nuclear power for the countries of
improving the efficiency of electric appliances. non-OECD Asia. Of the 68 gigawatts of additional
installed nuclear generating capacity projected for non-
Figure 6. World Electricity Generation by Fuel,
OECD Asia between 2005 and 2030, 45 gigawatts is in
2005-2030
China and 17 gigawatts in India. Outside Asia, the larg-
Trillion Kilowatthours
40 est increase in installed nuclear capacity among the non-
Nuclear OECD nations is projected for Russia, which is expected
Renewables to add a substantial 18 gigawatts of new nuclear generat-
30 Natural Gas ing capacity over the mid-term projection.
Coal
High prices for oil and natural gas, which are expected
Liquids to persist in the reference case, also encourage expanded
20
use of renewable fuels. Renewable energy sources are
attractive for environmental reasons, especially in coun-
10 tries where reducing greenhouse gas emissions is of par-
ticular concern. Government policies and incentives to
increase the use of renewable energy sources for electric-
0
ity generation are expected to encourage the develop-
2005 2010 2015 2020 2025 2030 ment of renewable energy even when it cannot compete
Sources: 2005: Energy Information Administration (EIA),
economically with fossil fuels. Worldwide, the con-
International Energy Annual 2005 (June-October 2007), web sumption of hydroelectricity and other renewable
site www.eia.doe.gov/iea. Projections: EIA, System for the energy sources increases by 2.1 percent per year in the
Analysis of Global Energy Markets/Global Electricity Module IEO2008 reference case, from 35 quadrillion Btu in 2005
(2008). to 59 quadrillion Btu in 2030.
4 Energy Information Administration / International Energy Outlook 2008
In the non-OECD nations, much of the growth in renew- transportation systems in order to move products and
able energy consumption is projected to come from mid- raw materials to market, particularly in developing
to large-scale hydroelectric facilities in Asia and in Cen- rural areas where economic growth often is achieved by
tral and South America, where several countries have increasing product exports.
hydropower facilities either planned or under construc-
The transportation infrastructure in OECD countries
tion. Among the OECD nations, hydroelectricity is fairly
generally is considered to be well-established. Motoriza-
well established, and with the exception of Canada and
tion levels (as measured by vehicles per 1,000 people)
Turkey there are few plans to undertake major hydro-
are fairly high in the OECD nations, where roads and
electric power projects in the future. Instead, increases in
highways connect most of the population centers.
OECD renewable energy consumption are expected to
Mature transportation sectors and relatively slow pro-
be in the form of nonhydroelectric renewables, espe-
jected growth rates for gross domestic product (GDP)
cially wind and biomass. Many individual OECD coun-
and population among the OECD economies lead to the
tries have incentives in place to increase the penetration
expectation that transportation energy demand will
of nonhydroelectric renewable electricity sources, both
increase only modestly. Transportation energy demand
to reduce greenhouse gas emissions and to promote
in the OECD economies is projected to grow at an aver-
energy security, and in the IEO2008 projections OECD
age annual rate of 0.7 percent in the IEO2008 reference
renewable generation grows by 1.6 percent per year
case (about one-fifth the rate projected for the non-
from 2005 to 2030, faster than all the other sources of
OECD economies), with North America accounting for
electricity of generation except natural gas.
approximately one-half of the total increase in OECD
consumption of liquid fuels for transportation.
Over the next 25 years, world demand for liquid fuels
and other petroleum is expected to increase more rap- World carbon dioxide emissions continue to increase
idly in the transportation sector than in any other steadily in the IEO2008 reference case, from 28.1 billion
end-use sector (Figure 7). The transportation share of metric tons in 2005 to 34.3 billion metric tons in 2015 and
total liquids consumption increases from 52 percent in 42.3 billion metric tons in 2030--an increase of 51 per-
2005 to 58 percent in 2030 in the IEO2008 reference case. cent over the projection period. With strong economic
Much of the growth in transportation energy use is growth and continued heavy reliance on fossil fuels
projected for the non-OECD nations, where trans- expected for most of the non-OECD economies, much of
portation energy use increases at an average rate of 2.9 the increase in carbon dioxide emissions is projected to
percent per year, doubling between 2005 and 2030. occur among the developing, non-OECD nations. In
Strong growth in income per capita supports the growth 2005, non-OECD emissions exceeded OECD emissions
in transportation energy demand, and the reference by 7 percent. In 2030, however, non-OECD emissions are
case anticipates that many of the world's emerging projected to exceed OECD emissions by 72 percent
economies will experience rapid modernization of their (Figure 8).
Figure 7. World Liquids Consumption by End-Use Figure 8. World Carbon Dioxide Emissions,
Sector, 2005-2030 2005-2030
Quadrillion Btu Billion Metric Tons
250 50
229
OECD Non-OECD World Total
42.3
194 39.6
200 40 37.0
169 34.3
Electric Power 31.1
150 30 28.1
Buildings
Industrial
100 20
Transportation
50 10
0
0 0
2005 2015 2030 2005 2010 2015 2020 2025 2030
Sources: 2005: Energy Information Administration (EIA), Source: Energy Information Administration, World Energy
International Energy Annual 2005 (June-October 2007), web Projections Plus (2008).
site www.eia.doe.gov/iea. Projections: EIA, World Energy
Projections Plus (2008).
Energy Information Administration / International Energy Outlook 2008 5