By OGJ Editors
WASHINGTON, DC, Mar. 26 -- World energy consumption is projected to increase by 60% over the next 2 decades, according to an annual report released Mar. 26 by the US Energy Information Administration that predicts long-term trends in international energy markets.
Much of the growth in worldwide energy use is expected in the developing world, according to the agency reference case forecast. According to the International Energy Outlook 2002, regions of Asia (including China, India, and South Korea) and Central and South America will be demand hot spots with consuming patterns increasingly similar to industrialized nations.
Both of these regions are expected to sustain energy demand growth of about 4% annually throughout the forecast period, EIA said. Parts of Asia and Central and South America will account for about half of the projected increment in world energy consumption and 83% of the increase EIA expects to see for in developing countries.
"Although the nations of the industrialized world continue to consume more of the world's petroleum products than do those of the developing world, the gap is projected to narrow considerably over the forecast period," EIA said. "In 1999, developing nations consumed 58% of the amount of oil consumed in the industrialized world, but by 2020 they are expected to consume almost 90% as much oil as the industrialized world."
Oil still rules
Oil is expected to remain the world's dominant source of primary energy consumption, with a 40% share of total energy consumption during 1999-2020. Although the use of oil is expected to steadily decline for electric power generation, oil's share of total energy consumption is expected to remain constant because of higher transportation fuel demand, EIA said.
The IEO2002 reference case expects world oil prices to moderate in 2002 and return to the price trajectory anticipated in last year's report for the mid-term, with prices reaching $25/bbl in 2000 dollars ($42/bbl in nominal dollars) by 2020, slightly higher than last year's forecast, EIA said. US officials made adjustments to reflect the Organization of Petroleum Exporting Countries' recent success in managing oil production cutbacks.
Worldwide, oil consumption rose by less than 100,000 b/d in 2001, with growth divided evenly among the industrialized (mainly Western Europe) and developing (mainly Central and South America) nations. But demand is expected to begin to recover in 2002 as world economies rebound from last year's slowdowns. Global oil demand is expected to expand by about 600,000 b/d this year, EIA said.
New oil production
World oil consumption is projected to increase from 75 million b/d in 1999 to 119 million b/d in 2020, for an annualized growth rate of 2.2%.
That higher demand would require an increment of almost 44 million b/d over current productive capacity levels by 2020. OPEC producers are expected to be the major beneficiaries of increased production requirements, EIA predicted, but non-OPEC supply is expected to remain competitive, with major increments coming from offshore resources, especially in the Caspian Sea region, Latin America, and deepwater West Africa.
Deepwater exploration and development initiatives are generally expected to be sustained worldwide, with EIA highlighting the potential of the Atlantic Basin as "a major future source of oil production in both Latin America and Africa".
Natural gas
Natural gas demand is also expected to be robust over the next 20 years, EIA said.
Natural gas remains the fastest growing component of primary world energy consumption. Over the IEO2002 forecast period, gas use is projected to nearly double in the reference case, reaching 162 tcf worldwude in 2020.
The natural gas share of total energy consumption is projected to increase from 23% in 1999 to 28% in 2020, with that fuel expected to play an increasingly important role in powering electric generation. EIA said natural gas will account for 43% of the total additional energy used for electricity generation worldwide.
Carbon dioxide emissions
EIA projected that total carbon dioxide emissions could increase by 62% from 1999 to 2020, a figure that may make it difficult for the White House to avoid an international consensus on climate change policies, some environmental groups warn.
As an independent statistical agency within the Department of Energy, EIA avoids making recommendations on public policy issues. In its forecast, EIA said that it expects carbon emission improvements in transitional economies such as Eastern Europe and the former Soviet Union.
In the former Soviet Union, economic recovery from the upheavals resulting from the dissolution of the Soviet Union is expected to continue throughout the forecast period. Still, those FSU nations are also expected to replace old and inefficient capital stock and increasingly use less carbon-intensive natural gas for electricity generation and other end uses in place of more carbon-intensive oil and coal.
China and India are also expected to see fairly rapid improvements in carbon intensity over the projection period, primarily as a result of large increases in economic growth, EIA said. Both China and India are expected to continue their heavy dependence on fossil fuels, especially coal, but their combined annual gross domestic product growth is projected to average 6.6%, compared with an expected 4.4% annual increase in fossil fuel use from 1999 to 2020.
