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Tuesday, October 17, 2017

EIA: World Energy Use Strong

April 12, 2002

Worldwide energy consumption grows by 60 percent over the next two decades, according to the reference case projection released today by the Energy Information Administration (EIA) in its annual forecast of international energy demand.

The International Energy Outlook 2002 (IEO2002) expects much of the growth to occur in the developing world, with the regions of developing Asia (including China, India, and South Korea) and Central and South America leading the way as their consuming patterns increasingly resemble those of the industrialized world (Figure 1).

Energy markets were influenced by a host of developments in 2001. High world oil prices persisted from 2000 into the first half of 2001 and then weakened substantially in the third quarter of the year. The markets also were affected by the global economic slowdown, led by a mild economic turndown in the United States and the aftermath of the terrorist attacks on the United States on September 11, 2001. The IEO2002 reference case expects world oil prices to moderate in 2002 and return to the price trajectory anticipated in last year's Outlook for the mid-term, with prices reaching $25 per barrel in 2000 dollars ($42 per barrel in nominal dollars) by 2020, slightly higher than in last year's Outlook, reflecting the successes OPEC had in managing oil production cutbacks to raise oil prices in 2000.

Worldwide, oil consumption rose by less than 100,000 barrels per day in 2001, divided evenly among the industrialized (mainly Western Europe) and developing (mainly Central and South America) nations. Demand is expected to begin to recover in 2002 as the world economies recover from the slowdown in 2001, and global oil demand is projected to expand by about 600,000 barrels per day in 2002. In the IEO2002 reference case projection, world oil consumption increases from 75 million barrels per day in 1999 to 119 million barrels per day in 2020, an annualized growth rate of 2.2 percent.

The increases in worldwide oil use projected in the reference case would require an increment of almost 44 million barrels per day over current productive capacity by 2020. OPEC producers are expected to be the major beneficiaries of increased production requirements, but non-OPEC supply is expected to remain competitive, with major increments coming from offshore resources, especially in the Caspian Basin, Latin America, and deepwater West Africa. Deepwater exploration and development initiatives are generally expected to be sustained worldwide, with the offshore Atlantic Basin emerging as a major future source of oil production in both Latin America and Africa (Figure 2).

Other report highlights include:

Natural gas remains the fastest growing component of primary world energy consumption. Over the IEO2002 forecast period, gas use is projected to nearly double in the reference case, reaching 162 trillion cubic feet in 2020. The natural gas share of total energy consumption is projected to increase from 23 percent in 1999 to 28 percent in 2020, and natural gas is expected to account for the largest increment in electricity generation (accounting for 43 percent of the total additional energy used for electricity generation). Much of the projected growth in natural gas consumption is in response to rising demand for natural gas to fuel efficient new gas turbine power plants.

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, although total carbon dioxide emissions are projected to increase by 62 percent between 1999 and 2020. The most rapid improvements in carbon intensity are, for the most part, projected for the transitional economies of Eastern Europe and the former Soviet Union (EE/FSU) (Figure 3). In the FSU, economic recovery from the upheavals resulting from the dissolution of the Soviet Union is expected to continue throughout the forecast. The FSU nations are also expected to replace old and inefficient capital stock and increasingly use less carbon-intensive natural gas for electricity generation and other end uses in place of more carbon-intensive oil and coal. China and India are also expected to see fairly rapid improvements in carbon intensity over the projection period, primarily as a result of large increases in economic growth. Both China and India are expected to continue their heavy dependence on fossil fuels, especially coal, but their combined annual GDP growth is projected to average 6.6 percent, compared with an expected 4.4 percent annual increase in fossil fuel use from 1999 to 2020.

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