The US Energy Department’s Energy Information Administration (EIA) has released its latest global projections and the headline numbers are not terribly surprising. The agency expects energy use to rise by 53 percent by 2035 and that the two most populous countries in the world, China and India, will account for 31 percent of all energy consumption by then. China alone will consume 68 percent more energy than the US by 2035.
The International Energy Outlook 2011 projects that the developed countries of the Organization for Economic Cooperation and Development (OECD) will account for 18 percent of the demand for more energy by 2035. The developing world will consume the rest. The EIA’s annual Outlook is based on a reference case that does not include the effects of political prospective legislation or policies that could affect energy markets.
Currently, the compound annual energy demand growth rate is 1.6 percent. The EIA expects the average price of a barrel of crude to be $100 by the end of this year, rising to $108/barrel by 2020 and $125/barrel by 2035.
At current pump prices for gasoline, US drivers are already paying the equivalent of $109/barrel, the price for Brent crude (the biggest of the major classifications of crude oil). According to 24/7 Wall St., the $85/barrel price for US-produced West Texas Intermediate (WTI) is an essentially meaningless number. They argue that, for the EIA to continue to use the WTI price as its benchmark, they are creating a distorted view of the crude oil market as it is now and as it will become over the next several years.
The fastest growing fuel source will be renewable energy, which the agency expects to grow at an annual rate of 2.8 percent and supply 15 percent of total demand in 2035. Fossil fuels will supply 78 percent of demand in 2035. Demand for liquid fuels for transportation grows by 1.4 percent annually and accounts for 82 percent of total projected growth in liquid fuel consumption.
According the the EIA report, among renewable sources of energy, hydropower and wind are projected to increase the most by 2035. Hydropower development will increase in the developing world, but in the richer countries wind is expected to carry more of the load.
Natural gas is the world’s fastest-growing fossil fuel, and consumption is expected to grow at an average rate of 1.6 percent, but by 2.2 percent annually in developing countries. That provides some quantities of natural gas for export to developed countries. Global consumption of natural gas is expected to grow from 110.7 trillion cubic feet in 2008 to 168.7 trillion cubic feet in 2035, a jump of nearly 53 percent.
There are hundreds, if not thousands, more facts included in the Outlook, but the outline for the future is straightforward. Developed nations will consume less energy as their economic growth slows; developing nations will consume more as their economies expand. Whether the two worlds collaborate or obstruct one another remains to be seen.
(Paul Ausick/Becket Adams—24/7 Wall St./The Blaze)