Uncertainty clouds latest global energy forecast
The Center for Strategic and International Studies on Thursday hosted Adam Sieminski, administrator for the US Energy Information Agency (EIA). Sieminski shared highlights from the agencys recent International Energy Outlook 2013 (IEO2013) report in a conference call with reporters.
Key findings from the study are:
- Globally speaking, gross domestic product (GDP) will increase 3.6%/yr through 2040. It is a 56% increase from the 2010 levels. Much of the new economic expansion will be driven by growing population and economies of China and India.
- Renewables are the fastest growing segment of the energy mix.
- Natural gas is the fastest growing fossil fuel; much of the new consumption is related to development of the US shale gas resources
- Coal consumption will increase faster than crude oil. Most of the coal consumption will be by China through 2030, at which point China will shift from a manufacturing focus to services.
- Annual carbon emissions will increase 40% by 2040 to about 45 billion metric tons, according to Sieminski.
Strength in developing countries. China and India are responsible for the majority of new energy consumption due to growing populations and economic expansion. Energy efficiency is improving in both nations but not enough to affect energy consumption growth, the administrator explained.
China and India accounted for 25% of the global energy consumption, but their share will increase to 34% by 2040, with Chinas energy consumption at twice the level of the US.
China is expected to remain as a coal-based energy economy through 2030, with coal primarily used for electrical power generation. However, China does have plans to increase nuclear power plants to meet future energy need with possible 160 gigawatts of capacity.
Crude oil. Non-OPEC nations are increasing production at a faster rate than OPEC nations. Much of the new production is driven by the deepwater and presalt from Brazil, shale oil in the US, oil sands in Canada, and conventional and unconventional resources in Russia.
Sieminski contends that Brazil needs to be better organized in its plans for deepwater. According to the EIA study, 115 million bpd production output by 2040 is possible. The long-term view is that it is not a production problem to meet 115 million bpd; rather, the problem is demand. New energy efficiency requirements will decrease energy needs by developed nations; thus less energy (crude oil, natural gas and coal) will be needed
Natural gas. This hydrocarbon is the fastest growing fossil fuel. Consumption will increase from 60Tcf ― 300 billion cfd (Bcfd) ― in 2010 to 500 Bcfd in 2040. Much of the new natural gas consumption will be by non-OECD nations with 300 Bcfd. From the supply side, Russia and the US will be major suppliers.
In closing, Administrator Sieminiski listed the key uncertainty factors that could further change the forecast. Those include:
- Unresolved long-term economic issues of the US and Europe, as well as the impact of China's economic expansion
- The timing of Japans full recovery from the 2011 nuclear/tsunami and how it impacts the economic conditions of Asia
- Social unrest in the Middle East and North Africa and potential unrest elsewhere, as those could create volatility in oil pricing and potential supply disruptions
- Shale gas and shale oil production will drive supply and demand for liquids.
- Climate policies are likely to dictate broader global energy policies going forward.
Stephany Romanow is the editor of Hydrocarbon Processing.