By Guy Caruso, Administrator of the U.S. Energy Information Administration
The outlook on world energy markets through the year 2030 is based on my agency's International Energy Outlook 2007 (IEO2007) that was released in May 2007. The projections are not statements of what will happen but of what might happen, given certain assumptions. The projections are business-as-usual forecasts, given known technology and technological trends, demographic trends, and current laws and regulations.
World energy consumption is projected to increase by 57 percent from 2004 to 2030. Total world energy use rises from 447 quadrillion British thermal units (Btu) in 2004 to 702 quadrillion BTU in 2030, an average annual increase of 1.8 percent. Robust projected growth in energy demand in countries outside the Organization for Economic Cooperation and Development (OECD) means that non-OECD countries (e.g. China, India, Russia, etc.) will surpass energy use in the OECD by 2010; by 2030, the non-OECD countries are projected to consume 35 percent more energy than OECD countries.
World liquids (i.e. petroleum and other liquids such as ethanol, coal-to-liquids, and gas-to-liquids) consumption in the reference case is projected to increase by 118 million barrels per day (239 quadrillion Btu) in 2030, as the world continues to experience strong economic growth. Two-thirds of the projected increase in liquids use occurs in the transportation sector.
A key input to EIA's projections is the world oil price trend. World crude oil prices, in real 2005 dollars, are projected to decline gradually to about $50 per barrel in 2015 as new supplies come to market in response to the higher prices and expanded exploration and development investment. After 2015, real prices begin to rise as demand continues to grow and higher-cost supplies are brought to market. In 2030, the average real price of crude oil is projected to be above $59 per barrel, or about $95 per barrel in nominal dollars. In the short-term, reasons for the rise in the price of oil include insufficient levels of investment in the oil sector, geopolitical uncertainties in key oil-producing countries, and the steady growth in global economy which requires more oil, natural gas, coal, and electricity.
Natural gas consumption worldwide is projected to increase from nearly 100 trillion cubic feet in 2004 to 163 trillion cubic feet in 2030. Continued high oil prices increase the competitiveness of natural gas, which increases by an average annual rate of 1.9 percent per year between 2004 and 2030. Natural gas will be a key fuel in the electric power and industrial sectors.
The world's total net electricity generation nearly doubles, growing at an average rate of 2.4 percent per year, from 16,424 billion kilowatthours in 2004 to 30,364 billion kilowatthours in 2030. Non-OECD countries account for 73 percent of the projected growth and OECD countries 27 percent.
Coal continues to provide the largest share of the energy used for electric power production. In 2004, coal-fired generation accounted for 41 percent of world electricity supply. In 2030 coal's share is projected to be 45 percent. Natural gas is the fastest-growing energy source for power generation with an average growth of 3.3 percent per year; however, the total amount of natural-gas-fired generation continues to be only about one-half the total for coal, even in 2030. Natural gas is attractive due to its efficiency, flexibility, short construction times, low investment costs, and cleanliness.
Nuclear power generation in the non-OECD countries is projected to increase by 4.0 percent per year from 2004 to 2030. The largest increase in installed nuclear generating capacity is expected in non-OECD Asia.
In the IEO2007 reference case, which does not include specific policies to limit greenhouse gas emissions, energy-related carbon dioxide emissions are projected to rise from 26.9 billion metric tons in 2004 to 33.9 billion metric tons in 2015 and 42.9 billion metric tons in 2030. In 2004, world carbon dioxide emissions from the combustion of coal were about 300 million metric tons lower than those from petroleum and other liquid fuels; by 2030 coal-related emissions are projected to exceed those of liquids by nearly 20 percent.
On a closing note, timely and reliable information on energy is extremely important. EIA has a long history of cooperating with numerous international organizations to improve the quality of data and projections. The Joint Oil Data Initiative represents an important collaboration to provide analysts around the world with monthly oil statistics.