The OilSpot News by DTN
Monday, June 1, 2009 VOLUME 7 ISSUE 354  

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Long-term Demand to Climb
EIA Expects World Energy Consumption to Grow 44% by 2030

World energy consumption is projected to grow 44 percent between 2006 and 2030, driven by strong long-term economic growth in developing countries, the Energy Information Administration reported last week in its International Energy Outlook 2009.

While near-term demand will be impacted by the current global economic downturn, once the recovery begins, most nations are expected to see energy consumption grow at rates anticipated prior to the recession. Economic recovery is expected to begin within the next 12 to 24 months.

Total energy demand in the non-Organization for Economic Cooperation and Development countries is projected to surge 73 percent in EIA’s reference case compared to an increase of 15 percent in OECD countries. The strong energy growth in the non-OECD countries is attributed to strong long-term GDP growth. In all the non-OECD regions combined, economic activity—measured by GDP in purchasing power parity terms—increases 4.9 percent per year on average compared to 2.2 percent yearly for OECD countries.

As the world’s economies recover, higher world oil prices are expected to persist through 2030. In EIA’s reference case, world oil prices rise from $61 bbl in 2009 to $110 bbl in 2015 and $130 bbl in 2030.

EIA projects total liquid fuels and other petroleum consumption will grow from 85 million bpd in 2006 to 91 million bpd in 2015 and 107 million bpd in 2030. The agency stated that only in the transportation sector are liquids relatively unaffected by the projected high oil prices worldwide. Although global oil prices in the 2030 reference case are 80 percent higher than 2008’s base case, 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.

According to the report, to meet growth in world liquids demand, total supply in 2030 is projected to be 106.6 million bpd, 22.0 million bpd higher than the 2006 level of 84.6 million bpd. In the reference case, the Organization of Petroleum Exporting Countries will contribute 8.2 million bpd to the total increase in world liquid fuels production, while non-OPEC countries add another 3.4 million bpd.

EIA said that biofuels, including ethanol and biodiesel, will be an increasingly important source of unconventional liquids supply, reaching 5.9 million bpd in 2030. Particularly strong growth in biofuels consumption is expected for the United States, where production of biofuels increases from 300,000 bpd in 2006 to 1.9 million bpd in 2030, supported by energy legislation mandating increased use of biofuels. Other regions with sizeable projected increases in biofuels production include OECD Europe, non-OECD Asia, and Central and South America. EIA reported that those regions together with the U.S. account for 75 percent of the global increase in biofuels production.

The outlook said the rapid rise in world energy prices from 2003 to 2008, as well as increased environmental concerns about consequences of greenhouse gas emissions, has led a renewed interest in the development of alternatives to fossil fuels.

“Renewable energy is the fastest-growing source of world electricity generation in the IEO2009 reference case, supported by high prices for fossil fuels and by government incentives for the development of alternative energy sources,” said EIA.

While the IEO2009 reference case does not include specific policies that limit greenhouse gas emissions, energy-related carbon dioxide emissions are projected to rise from 29.1 billion metric tons in 2005 to 40.4 billion in 2030—an increase of 39 percent. With strong economic growth and continued heavy reliance on fossil fuels expected, much of the increase is expected to occur in developing nations of the world, particularly Asia.


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