Global energy demand is on track to grow by 50% over the next 20 years, and without mandatory actions to reduce greenhouse gases (GHG), the amount of carbon dioxide (CO2) flowing into the atmosphere from energy use could be 51% more in 2030 than it was in 2005, the Energy Information Administration (EIA) reported last week.

Highlights from EIA’s International Energy Outlook 2008 (IEO2008) were published Wednesday; the full report is due in July. EIA assessed world energy markets through 2030 using a scenario where current laws and policies remain unchanged throughout the projection period. U.S. projections to 2030 were published by EIA in March (see NGI, March 10).

According to the forecast, total world energy use will increase to 562 quadrillion Btu in 2015 and to 695 quadrillion Btu in 2030 — up from 462 quadrillion Btu in 2005.

“Global energy demand grows despite the sustained high world oil prices that are projected to persist over the long term,” the report stated. Most of the growth in energy demand is for nations outside the Organization for Economic Cooperation and Development (OECD). Total non-OECD demand increases by 85% in the reference case projections, compared with an increase of 19% in OECD energy use.

Despite their rising price, petroleum and related liquid fuels, natural gas and coal would supply most of the energy used worldwide through 2030, EIA noted.

“In the IEO2008 reference case, prices ease somewhat in the medium term, as anticipated new production — both conventional and unconventional (in Azerbaijan, Brazil, Canada, Kazakhstan and the United States, for example) — reaches the marketplace,” stated the report. “Ultimately, however, markets are expected to remain relatively tight.”

Worldwide natural gas consumption is seen to grow to 158 Tcf in 2030 from 104 Tcf in 2005.

“Natural gas is expected to replace oil wherever possible,” EIA noted. “Moreover, because natural gas combustion produces less carbon dioxide than coal or petroleum products, governments may encourage its use to displace the other fossil fuels as national or regional plans to reduce greenhouse gas emissions begin to be implemented. Natural gas is expected to remain a key energy source for industrial sector uses and electricity generation throughout the projection period. The industrial sector, which is the world’s largest consumer of natural gas, accounts for 43% of projected natural gas use in 2030. In the electric power sector, natural gas is an attractive choice for new generating plants because of its relative fuel efficiency. Electricity generation accounts for 35% of the world’s total natural gas consumption in 2030.”

Most of the world’s growing demand for natural gas is projected to be met by increased production from non-OECD nations. In the IEO2008 reference case, non-OECD countries account for more than 90% of the world’s total growth in production from 2005 to 2030.

“A significant portion of the non-OECD production (excluding Russia and the other nations of Eurasia) is expected to be in the form of export projects — particularly liquefied natural gas (LNG) projects,” the report stated. “The Middle East and Africa are at the forefront of the trend toward LNG: natural gas production in the two regions combined increases by 21.0 Tcf between 2005 and 2030, but their combined demand for natural gas increases by only 9.9 Tcf. Significant increases in natural gas production are also projected for the countries of non-OECD Asia, but those supply increases are expected to be used largely for consumption within the region rather than for export.”

Absent national policies and/or binding international agreements to limit GHG, world coal consumption is projected to increase to 202 quadrillion Btu in 2030 from 123 quadrillion Btu in 2005, at an average annual rate of 2%.

“Coal’s share of world energy use has increased sharply over the past few years, largely because of strong increases in coal use in China, which has nearly doubled since 2000 and is poised to increase strongly in the future,” the report noted. “With its large domestic base of coal resources and continuing strong economic growth, China alone accounts for 71% of the increase in world coal consumption in the IEO2008 reference case. The United States and India — both of which also have extensive domestic coal resources — each account for 9% of the world increase.”

World net electricity generation is expected to nearly double from about 17.3 trillion kWh in 2005 to 24 trillion kWh in 2015 and 33.3 trillion kWh in 2030. Non-OECD developing countries show the strongest growth in electricity demand as they expand their power grids to support sustained robust economic growth, said the report.

“Coal and natural gas account for the largest increments in fuel consumption for electricity generation over the projection period,” the report said. “The 3.1% projected annual growth rate for coal-fired electricity generation worldwide is exceeded only by the 3.7% rate for natural gas-fired generation. Sustained high prices for oil and natural gas make coal-fired generation more attractive economically, especially for coal-rich nations like China, India and the United States.” However, the report noted that the outlook for fossil fuel-fired generation could be altered “substantially” by international agreements to reduce GHG emissions.

Electricity generation from nuclear power is projected to increase from about 2.6 trillion kWh in 2005 to 3.8 trillion kWh in 2030, as concerns about rising fossil fuel prices, energy security and GHG emissions support the development of new nuclear generation, the report stated. “Higher capacity utilization rates have been reported for many existing nuclear facilities, and it is anticipated that most of the older nuclear power plants in the OECD countries and non-OECD Eurasia will be granted extensions to their operating lives. Still, there is considerable uncertainty associated with nuclear power.”

High prices for oil and natural gas, which are expected to persist in the reference case, also encourage expanded use of renewable fuels, said EIA. “Government policies and incentives to increase the use of renewable energy sources for electricity generation are expected to encourage the development of renewable energy even when it cannot compete economically with fossil fuels. Worldwide, the consumption of hydroelectricity and other renewable energy sources increases by 2.1% per year in the IEO2008 reference case, from 35 quadrillion Btu in 2005 to 59 quadrillion Btu in 2030.”

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