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Providing coverage of Alaska and northern Canada's oil and gas industry
August 2018

Vol. 23, No.31 Week of August 05, 2018

EIA anticipates growing energy demand

2018 International Energy Outlook sees steady increase in use of all energy types except coal, primarily in developing countries

Alan Bailey

Petroleum News

In its International Energy Outlook 2018 report, the U.S. Energy Information Administration anticipates economic growth in developing countries driving an increase in global energy consumption over the next couple of decades. While energy consumption by countries outside the Organization for Economic Cooperation and Development first exceeded consumption within the OECD in 2007, the non-OECD countries will account for 64 percent of world energy use by 2040, according to the Energy Outlook’s base case. Global energy consumption may increase from 575 quadrillion British thermal units in 2015 to 739 quadrillion Btus in 2040, but with OECD consumption only increasing slightly to 266 quadrillion Btus during that same time period, the report says.

Consumption of liquid fuels, natural gas and renewables are expected to account for much of the increased energy usage, but with nuclear power usage also increasing. However, the EIA anticipates coal usage declining somewhat. The industrial use of energy tends to be the largest form of energy consumption.

China, India and Africa

Although energy consumption is likely to increase significantly in a broad spectrum of non-OECD countries, with Asia factoring particularly high in the overall increase, the Energy Outlook report particularly focuses on China, India and Africa. These regions have large populations and high levels of anticipated economic growth. And an examination of some of the future economic possibilities in these regions illustrates the extent to which future energy consumption will depend on the trajectory of global economic growth, and on the manner in which this growth takes place.

China, for example, may see a more rapid transition from an export-led to a consumption-led economy than is assumed in the Energy Outlook’s base case for energy consumption: That could increase the annual growth rate of the country’s gross domestic product from 4.7 percent to 5.7 percent. However, the resulting shift from manufacturing industries towards service industries would actually depress the rate of growth in energy demand. And in the past few years China has seen a slowing of its GDP growth rate, together with a slowing in the growth rate of its energy usage, the report says.

India: high growth, low per capita consumption

Although India is forecast to have both the world’s largest population and the world’s fastest growing economy in the coming decades, the country’s total energy use and energy consumption per capita will likely remain lower than those of China and the United States. However, a transition in India towards a more export-led economy would cause the growth of the manufacturing sector, a factor that could increase forecast energy consumption by as much as 33 percent by 2040. Other scenarios that assume higher than anticipated Indian economic growth result in similar increases in energy consumption.

The regional economy of Africa is currently dominated by the service industries - higher than expected rates of economic growth in the region would likely result from an expanding manufacturing sector. That, in turn, could lead to a 30 percent increase in per-capita energy consumption in 2040, relative to AEA’s base case, the Energy Outlook report says.






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