Oil Will Dominate Growing Energy Demand

By Cat Lazaroff

WASHINGTON, DC, March 28, 2002 (ENS) - World demand for energy is expected to rise by 60 percent over the next two decades, predicts a report by the U.S. Energy Information Administration. The agency says the increased energy consumption, led largely by oil, will boost releases of carbon dioxide by as much as 3.8 billion metric tons per year in 2020.

Oil will continue to command 40 percent of the world's energy consumption, the EIA projects. (Photo by Warren Gretz, courtesy National Renewable Energy Laboratory)

The Energy Information Administration (EIA), the Department of Energy's analytical arm, reports that most of the growth will occur in developing countries in Asia, and in Central and South America.

Oil is expected to remain the world's dominant source of energy, accounting for about 40 percent of all energy consumption. Increased consumption of oil and other fossil fuels will in turn, increase the world's emissions of carbon dioxide, the EIA reports.

Total carbon dioxide emissions are projected to increase by 62 percent between 1999 and 2020.

However, carbon intensity - the amount of carbon dioxide emitted per dollar of gross domestic product (GDP) - is projected to improve throughout the world over the next two decades. The most rapid improvements in carbon intensity are projected for the growing economies of Eastern Europe and the former Soviet Union.

Coal burning power plants remain a major energy source in the U.S. and abroad. (Photo by Carole Swinehart, courtesy Michigan Sea Extension)

China and India are also expected to see fairly rapid improvements in carbon intensity, because their economies are expected to grow faster than their energy consumption. Both China and India are expected to continue their heavy dependence on fossil fuels, particularly coal.

However, coal is expected to account for a shrinking portion of energy use worldwide. "In 1999, coal provided 22 percent of world primary energy consumption, down from 27 percent in 1985," and that number is expected to fall to 20 percent by 2020, the EIA reports.

Natural gas remains the fastest growing component of the world energy market, the EIA reports. Gas use is projected to nearly double over the next two decades, reaching 162 trillion cubic feet in 2020. The natural gas share of total energy consumption is expected to increase from 23 percent in 1999 to 28 percent in 2020.

Much of the projected growth in natural gas consumption is in response to the demands of efficient new natural gas fueled power plants.

Nuclear power capacity is expected to stabilize, with a boost coming from developing countries. In developing Asian nations, nuclear capacity will more than double over the next two decades, from 22 gigawatts in 1999 to 54 gigawatts in 2020.

Many U.S. nuclear power plants, including Calvert Cliffs in Maryland, are applying for and receiving licenses for decades of continued operation. (Photo courtesy Nuclear Regulatory Commission)

"Extensions of operating licenses (or the equivalent) for nuclear power plants are expected to be requested and granted among the countries of the industrialized world," the report says. "With more of the existing nuclear power plants expected to remain in operation, the projected decline in nuclear generation is slowed."

The agency is forecasting a drop of just 19 gigawatts of nuclear capacity, from 279 gigawatts in 1999 to 260 gigawatts in 2020.

Renewable energy use is projected to increase by 53 percent between 1999 and 2020, but its share of the total world energy market is expected to fall from nine percent to eight percent by 2020.

Most of the growth in renewable energy is expected to be driven by new, large scale hydroelectric projects, particularly in China, India, Malaysia, and other developing Asian countries.

"In 2001, construction on mega-hydro projects like China's 18,200 megawatt Three Gorges Dam and Malaysia's 2,400 megawatt Bakun continued amidst criticism of their environmental impacts and concerns about the welfare of the people being relocated to accommodate the projects," the report notes.

Continued low prices for fossil fuels are expected to reduce interest in renewable power. With the worldwide oil reserves measuring three times larger than global demand for oil, the report projects that oil prices will stabilize, with prices reaching $25 per barrel in 2000 dollars by 2020, as compared to $27.72 per barrel in 2000 and an estimated $22.05 per barrel in 2001.

The transportation sector consumes much of the world's oil supplies. (Photo by Warren Gretz, courtesy National Renewable Energy Laboratory)

Although slowing economies around the world reduced growth in this sector in recent years, "transportation energy use is expected to continue robust growth over the next two decades, especially in the developing world, where relatively immature transportation infrastructures are expected to grow rapidly as national and regional economies expand," the EIA reports.

Energy use for transportation is projected to increase by 3.8 percent per year in the developing world, compared with average annual increases of 1.7 percent for the industrialized countries.

"In urban centers of the developing world, car ownership is often seen as one of the first symbols of emerging prosperity," the EIA notes. "Per capita motorization in much of the developing world is projected to more than double between 1999 and 2020, although population growth is expected to keep motorization levels low relative to those in the industrialized world."

The full report is available at: http://www.eia.doe.gov/oiaf/ieo/index.html