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World Energy Consumption To Grow By 56 Percent Between 2010 And 2040
iea News | CIOL Bureau WASHNGTON, USA: The International Energy Outlook 2013 (IEO2013) projects that world energy consumption will grow by 56 percent between 2010 and 2040. Total world energy use rises from 524 quadrillion British thermal units (Btu) in 2010 to 630 quadrillion Btu in 2020 and to 820 quadrillion Btu in 2040. Much of the growth in energy consumption occurs in countries outside the Organization for Economic Co-operation and Development (OECD), known as non-OECD, where demand is driven by strong, long-term economic growth. Energy use in non-OECD countries increases by 90 percent; in OECD countries, the increase is 17 percent. The IEO2013 Reference case does not incorporate prospective legislation or policies that might affect energy markets. Renewable energy and nuclear power are the world’s fastest-growing energy sources, each increasing by 2.5 percent per year. However, fossil fuels continue to supply almost 80 percent of world energy use through 2040. Natural gas is the fastest-growing fossil fuel in the outlook. Global natural gas consumption increases by 1.7 percent per year. Increasing supplies of tight gas, shale gas, and coalbed methane support growth in projected worldwide natural gas use. Coal use grows faster than petroleum and other liquid fuel use until after 2030, mostly because of increases in China’s consumption of coal and tepid growth in liquids demand attributed to slow growth in the OECD regions and high sustained oil prices. The industrial sector continues to account for the largest share of delivered energy consumption; the world industrial sector still consumes over half of global delivered energy in 2040. Given current policies and regulations limiting fossil fuel use, worldwide energy-related carbon dioxide emissions rise from about 31 billion metric tons in 2010 to 36 billion metric tons in 2020 and then to 45 billion metric tons in 2040, a 46-percent increase. World economic background The world is still recovering from the effects of the 2008-2009 global recession. As these effects continue to be felt, many unresolved economic issues add to the uncertainty associated with this year’s long-term assessment of world energy markets. Currently, there is wide variation in the economic performance of different countries and regions around the world. Among the more mature OECD regions, the pace of growth varies but generally is slow in comparison with the emerging economies of the non-OECD regions. In the United States and Europe, short- and long-term debt issues remain largely unresolved and are key sources of uncertainty for future growth. Economic recovery in the United States has been weaker than the recoveries from past recessions, although expansion is continuing. In contrast, many European countries fell back into recession in 2012, and the regionss economic performance has continued to lag. Japan, whose economy had been sluggish before the devastating earthquake in March 2011, is recovering from its third recession in 3 years. Questions about the timing and extent of a return to operation for Japan’s nuclear power generators compound the uncertainty surrounding its energy outlook. In contrast to the OECD nations, developing non-OECD economies, particularly in non-OECD Asia, have led the global recovery from the 2008-2009 recession. China and India have been among the world’s fastest growing economies for the past two decades. From 1990 to 2010, China’s economy grew by an average of 10.4 percent per year and India’s by 6.4 percent per year. Although economic growth in the two countries remained strong through the global recession, both slowed in 2012 to rates much lower than analysts had predicted at the start of the year. In 2012, real GDP in China increased by 7.2 percent, its lowest annual growth rate in 20 years. India’s real GDP growth slowed to 5.5 percent in 2012. The world’s real gross domestic product (GDP, expressed in purchasing power parity terms) rises by an average of 3.6 percent per year from 2010 to 2040. The fastest rates of growth are projected for the emerging, non-OECD regions, where combined GDP increases by 4.7 percent per year. In the OECD regions, GDP grows at a much slower rate of 2.1 percent per year over the projection, owing to more mature economies and slow or declining population growth trends. The strong growth in non-OECD GDP drives the fast-paced growth in future energy consumption projected for these nations. Continue reading
China, India to Drive World’s Growing Energy Use
July 25, 2013 RYAN TRACY Enlarge ImageEnergy Department’s report Based on current government policies and a model that assumed continued growth in the world-wide economy, the report found that fueling that prosperity will take mostly traditional fossil fuels like oil, coal and natural gas. Those fuels will account for 80% of world energy use through 2040, the report projects. Consumption of natural gas is expected to grow faster than that of oil or coal, with the industrial and electric power sectors leading a shift toward burning more gas, which is being unlocked across the globe thanks to new extraction technologies. At the same time, the report predicts that renewable energy will be the fastest-growing source of the world’s electricity generation, driven by a huge increase in capacity of hydroelectric dams and wind farms. Fadel Gheit , an energy analyst for Oppenheimer & Co., cautioned that “projections are suicidal,” particularly in the energy sector, where technological advances have upended predictions. “Nobody had predicted five years ago that the U.S. would be self-sufficient in natural gas,” Mr. Gheit said. “Now we have gas that we don’t know what to do with.” While the U.S. has led the charge in producing more gas, the Energy Department projects it will have competition. The report says Russia will keep pace with the U.S. in boosting output, particularly in the Russian Arctic, and that China and Canada will increase production as well. By 2040, the U.S. and Russia are each expected to increase annual natural-gas production by about 12 trillion cubic feet from 2010 levels, according to the report. Much of the new production may be steered to meet growing demand in other countries. Russia is planning to transport more gas to China, while more than a dozen firms have proposed export facilities to ship gas from the U.S. to Europe and Asia. Separately, the Energy Department report predicts the world will be producing 116 million barrels of liquid fuel, which is mostly crude oil, in 2040. That is a much less aggressive estimate than an earlier projection in 2007 for 118 million barrels in 2030. “The difference between those two [projections] has more to do with demand than it does with supply,” Mr. Sieminski said. Fuel-efficiency standards, he said, are helping to tamp down demand in some places. In the U.S., regulations adopted by the Obama administration are expected to lower demand for gasoline by 1.5 million barrels per day by 2030. The Energy Department report says that trend could expand to other counties amid high oil prices, which are expected to rise to $163 per barrel world-wide in 2040 from $105 in 2013. That increase could drive consumers to use less or seek alternatives. “The greatest potential for altering the growth path of energy use is in the transportation sector,” the report says. Burning more fossil fuels will increase the amount of carbon dioxide produced world-wide: The report projects that emissions of carbon dioxide, the most common greenhouse gas that scientists have linked to climate change, will increase 46% by 2040. Andrew Steer, president of the World Resources Institute, a think tank that focuses on climate policy, said that result “would be an exceedingly bad outcome for the environmental health of the world,” but it would also mean “we’re not using resources more efficiently, so we’re not benefiting economically from the huge gains that all analysis demonstrates that energy efficiency [provides].” The amount of electricity generated from nuclear power is also expected to more than double from 2010 to 2040. The report says that uncertainty around atomic power has grown since the 2011 nuclear meltdown in Japan, but predicts China, India, Russia and South Korea will move ahead with new nuclear plants. The world will also use more oil and coal in the coming decades, the report projects, though the growth rates are projected to be slower that other energy sources: an average of 1.1% per year for liquid transportation fuels including oil, and 1.3% per year for coal. That compares to projected annual growth rates of 1.7% for natural gas and about 2.5% per year for renewable energy and nuclear power. Continue reading
The Great Deceleration
The emerging-market slowdown is not the beginning of a bust. But it is a turning-point for the world economy Jul 27th 2013 WHEN a champion sprinter falls short of his best speeds, it takes a while to determine whether he is temporarily on poor form or has permanently lost his edge. The same is true with emerging markets, the world economy’s 21st-century sprinters. After a decade of surging growth, in which they led a global boom and then helped pull the world economy forwards in the face of the financial crisis, the emerging giants have slowed sharply. China will be lucky if it manages to hit its official target of 7.5% growth in 2013, a far cry from the double-digit rates that the country had come to expect in the 2000s. Growth in India (around 5%), Brazil and Russia (around 2.5%) is barely half what it was at the height of the boom. Collectively, emerging markets may (just) match last year’s pace of 5%. That sounds fast compared with the sluggish rich world, but it is the slowest emerging-economy expansion in a decade, barring 2009 when the rich world slumped. This marks the end of the dramatic first phase of the emerging-market era, which saw such economies jump from 38% of world output to 50% (measured at purchasing-power parity, or PPP) over the past decade. Over the next ten years emerging economies will still rise, but more gradually. The immediate effect of this deceleration should be manageable. But the longer-term impact on the world economy will be profound. Running out of puff In the past, periods of emerging-market boom have tended to be followed by busts (which helps explain why so few poor countries have become rich ones). A determined pessimist can find reasons to fret today, pointing in particular to the risks of an even more drastic deceleration in China or of a sudden global monetary tightening. But this time a broad emerging-market bust looks unlikely. China is in the midst of a precarious shift from investment-led growth to a more balanced, consumption-based model. Its investment surge has prompted plenty of bad debt. But the central government has the fiscal strength both to absorb losses and to stimulate the economy if necessary. That is a luxury few emerging economies have ever had. It makes disaster much less likely. And with rich-world economies still feeble, there is little chance that monetary conditions will suddenly tighten. Even if they did, most emerging economies have better defences than ever before, with flexible exchange rates, large stashes of foreign-exchange reserves and relatively less debt (much of it in domestic currency). That’s the good news. The bad news is that the days of record-breaking speed are over. China’s turbocharged investment and export model has run out of puff. Because its population is ageing fast, the country will have fewer workers, and because it is more prosperous, it has less room for catch-up growth. Ten years ago China’s per person GDP measured at PPP was 8% of America’s; now it is 18%. China will keep on catching up, but at a slower clip. That will hold back other emerging giants. Russia’s burst of speed was propelled by a surge in energy prices driven by Chinese growth. Brazil sprinted ahead with the help of a boom in commodities and domestic credit; its current combination of stubborn inflation and slow growth shows that its underlying economic speed limit is a lot lower than most people thought. The same is true of India, where near-double-digit annual rises in GDP led politicians, and many investors, to confuse the potential for rapid catch-up (a young, poor population) with its inevitability. India’s growth rate could be pushed up again, but not without radical reforms—and almost certainly not to the peak pace of the 2000s. Many laps ahead The Great Deceleration means that booming emerging economies will no longer make up for weakness in rich countries. Without a stronger recovery in America or Japan, or a revival in the euro area, the world economy is unlikely to grow much faster than today’s lacklustre pace of 3%. Things will feel rather sluggish. It will also become increasingly clear how unusual the past decade was (see article ). It was dominated by the scale of China’s boom, which was peculiarly disruptive not just as a result of the country’s immense size, but also because of its surge in exports, thirst for commodities and build-up of foreign-exchange reserves. In future, more balanced growth from a broader array of countries will cause smaller ripples around the world. After China and India, the ten next-biggest emerging economies, from Indonesia to Thailand, have a smaller combined population than China alone. Growth will be broader and less reliant on the BRICs (as Goldman Sachs dubbed Brazil, Russia, India and China). Corporate strategists who assumed that emerging economies were on a straight line of ultra-quick growth will need to revisit their spreadsheets; in some years a rejuvenated, shale-gas-fired America may be a sprightlier bet than some of the BRICs. But the biggest challenge will be for politicians in the emerging world, whose performance will propel—or retard—growth. So far China’s seem the most alert and committed to reform. Vladimir Putin’s Russia, by contrast, is a dozy resource-based kleptocracy whose customers are shifting to shale gas. India has demography on its side, but both it and Brazil need to recover their reformist zeal—or disappoint the rising middle classes who recently took to the streets in Delhi and São Paulo. There may also be a change in the economic mood music. In the 1990s “the Washington consensus” preached (sometimes arrogantly) economic liberalisation and democracy to the emerging world. For the past few years, with China surging, Wall Street crunched, Washington in gridlock and the euro zone committing suicide, the old liberal verities have been questioned: state capitalism and authoritarian modernisation have been in vogue. “The Beijing consensus” provided an excuse for both autocrats and democrats to abandon liberal reforms. The need for growth may revive interest in them, and the West may even recover a little of its self-confidence. From the print edition: Leaders Continue reading
