DOE Report: Oil Consumption To Rise 44%
A new study by the U.S. Department of Energy's (DOE) Energy Information Administration estimates that worldwide oil consumption will continue to rise over the next two decades, increasing by 44 percent and adding 30 million barrels a day to the international oil flow. According to the study, by the year 2015, world oil demand will increase from the present level of about 69 million barrels daily to 99 million barrels.
The study, entitled International Energy Outlook 1996 With Projections to 2015, anticipates that world oil supplies will be able to meet the growing demand, although there will be increases in cost and increases in carbon emissions because of the greater use.
A large amount of future oil production will continue to come from Persian Gulf OPEC members, the study says. Persian Gulf OPEC production is expected to represent more than 40 percent and possibly as much as 52 percent of world oil demand, forecasts indicate.
The report says Persian Gulf OPEC production is expected to range from 41 to 52 percent of world oil production, or from 37.8 to as much as 53.5 million barrels daily. Persian Gulf OPEC members now produce about 18 million barrels a day, which amounts to approximately 29 percent of total world oil use. The report notes that worldwide oil reserves, which have been primarily in OPEC nations since the 1980's, may also show marked increases in non- OPEC areas in the next 20 years .
"In the late 1980s," the report says, "more than 350 billion barrels of crude oil reserves were added worldwide. The additions were made predominantly by the OPEC nations, almost 94 percent of the total." Although OPEC crude oil production has been increasing steadily since the mid-1980's, according to the study, "crude oil production from non-OPEC suppliers has shown surprising resilience over the past two decades, increasing by more than two-thirds." The U.S. Geological Survey estimates that of the more than 450 billion barrels of undiscovered oil that may be recoverable, about twothirds may come from non-OPEC producers.
"In this context, one may conclude that OPEC could potentially remain at less than a 50 percent share of worldwide production even in the face of strong demand growth for at least the first two decades of the next century," says the DOE study.
The Energy Department data indicates, however, that OPEC countries will continue to have great influence on the world oil market, specifically saying that it assumed that "the OPEC countries with large reserves that can be exploited at relatively low cost will have the greatest influence on future oil market conditions." It estimated that OPEC producers may grow at such a "robust" annual rate of 3.5 percent in production to exceed 55 million barrels daily by the year 2015.
"This outlook assumes that Iraq will resume exports in 1997 and will gradually build up its output to almost 3 million barrels per day by the year 2000," the report said. (Note: At press time Iraq, under a new agreement with the United Nations, was expected to resume oil exports this year.) The report forecasts a continued decline in North American production, including in the U.S., but foresees that U.S. production will recover somewhat and, by 2015, "is expected to return to current production levels." "Due mainly to the decline in U.S. production," the report says, "North American output will show steady decline into the early years of the next century.
"Canada's output should increase modestly over current levels, declining only slightly by the end of the forecast period. Offshore discoveries in the Gulf of Mexico, incremental Alaskan production from Cook Inlet, and technological advances in extraction methods reverse the downward trend in U.S. production for the remainder of the forecast period. By 2015, U.S. production is expected to return to current production levels." The study says that, although there have been "serious declines" in oil production in the former Soviet Union in the 1990s, "largely because of the economic problems of the post-Communist era," new data suggest that the downward trend may have ended at a low point of about seven million barrels daily.
"A gradual recovery is expected over the remainder of the decade, but no significant production gains (in the former Soviet Union) are anticipated before the turn of the century," the report notes.