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EIA: Oil, gas demand to grow through 2050 Agency’s International Energy Outlook 2021 says developing Asian economies will be main driver of continued growth in production Kristen Nelson Petroleum News
While new electricity generation will be primarily powered by renewables, oil and natural gas production will continue to grow through 2050, the U.S. Energy Information Administration said Oct. 6 in its International Energy Outlook 2021.
Production growth will be driven by increasing energy consumption in developing Asian economies, the agency said.
EIA said its reference case assumes that world oil prices will reach $95 per barrel in 2050, in 2020 dollars, based on a global growth rate of 2.8% per year.
High and low economic growth cases, on the other hand, are based respectively on 3.7% and 2% annual global GDP growth rate, and the high and low oil price cases are based, respectively, on $176 per barrel and $45 per barrel oil, in 2020 dollars, in 2050.
Population, economic growth EIA said that under current policy and technology trends, population and economic growth will drive increasing energy consumption - and energy-related carbon dioxide emissions.
Global energy use is projected to increase nearly 50% by 2050, driven by non-OECD (Organization for Economic Cooperation and Development) economic and population growth, particularly in Asia.
Average GDP growth in OECD countries is projected at under 2%, while GDP in non-OECD countries is pegged at almost 4%. India has the highest average 2020 to 2050 GDP percentage change, more than 5%. EIA said while China continues to grow at an annual rate equal to Africa and other Europe and Eurasia countries, “its growth notably slows throughout the projection period.”
The top five growth regions (India, other Asia, Africa, China and other Europe and Eurasia) accounted for 70% of the world’s population in 2020 and 44% of GDP, shares which are projected to grow to 73% of population and 59% of GDP by 2050, EIA said.
Global energy use in non-OECD countries grows faster than in the OECD, with energy consumption growth through 2050 largely driven by population growth and increasing GDP. “As standards of living increase, most notably in non-OECD Asian countries, demand for goods and the energy needed to manufacture those goods increase.”
Energy-related carbon dioxide emissions rise through 2050 in the reference case, EIA said, “largely driven by non-OECD countries where 2050 emissions increase by 35% over 2020 levels, compared with a 5% emissions growth in OECD countries.”
The agency attributed the difference to higher retention of fossil fuel usage in non-OECD countries, “particularly coal, which has a higher carbon content than other fuels,” with non-OECD countries being more than twice as reliant on coal for electricity as OECD countries.
Production of oil increases EIA said it expects a steady increase in crude oil and lease condensate production to meet growth in consumption, with both OPEC and non-OPEC oil production growing, but 2020 to 2050 OPEC production growing at almost three times the rate of non-OPEC production.
In the reference case consumption reaches some 125 million barrels per day but reaches some 151 million bpd in the high economic growth case.
“Canada, Iran, Iraq, and Russia all have large undeveloped crude oil resources and so could expand production to help meet 2050 global demand in the High Economic Growth case.” EIA said that while both Saudi Arabia and the Unites states have large resources, “their resources have been more systematically developed and likely have less room to expand beyond their historical levels of production.”
Natural gas plant liquids production grows some 50% by 2050, EIA said, “driven by high demand for NGPLs in the industrial sector.”
Liquid fuels consumption grows most in non-OECD Asia with consumption nearly doubling from 2020 to 2050; transportation and industry account for most of that growth.
“This consumption growth primarily occurs in the rapidly developing economies of China, India, Indonesia, Thailand, and Other non-OECD Asia countries.” Production in the area is relatively flat, requiring increased imports of crude oil or finished products, EIA said.
OPEC production growth is significant compared to the four largest non-OPEC producers - Russia, the United States, Canada and Brazil - with Middle East production increasing by more than 50%, growth the agency attributes to available resources in the Middle East and its proximity to growing non-OECD Asian economies.
“The Middle East is already a prevalent supplier of crude oil to Asia, and we project it to remain so as demand for liquid fuels continues to increase and as many Asian refineries configure to process the Middle East’s crude oil,” EIA said.
Natural gas production is projected to increase by some 30% between 2020 and 2050 in the reference case, with the three current largest producers - the United States, Russia and the Middle East - projected to continue to expand production and the United States projected to remain the largest producer worldwide, producing almost 43 trillion cubic feet in 2050. Production in both the United States and Russia is projected to grow by about 10 tcf between 2020 and 2050, while Middle East production grows by about 5 tcf.
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