Forecasts for the year in progress were also periodically revised downwards by the IEA, the EIA in the USA and by OPEC.
Following a two-year period (2007-2008) which saw the highest demand for crude oil in history, OPEC felt that worldwide oil demand would not fully recover until 2012. Demand will fall in 2009, and begin a slight recovery over the following two years. This was the view stated by the cartel's leaders when they presented their 2009 Global Oil Forecast Report in the month of September.
A similar theory (slight upturn in 2010 and the two following years) was espoused by the IEA, although the agency was somewhat more optimistic in September than OPEC as to the year 2009 as a whole. The IEA modified its estimate several times over the course of the year, and it was in September that it for the first time published a positive figure for the trend in the main economies of the OECD and better than expected developments in the Chinese economy.
As every year, the US government's Energy Information Administration produced its International Energy Outlook report for 2009, presenting long-term prospects (looking ahead to 2030) for worldwide energy demand. This report was published in late May 2009.
We below set out a brief summary of its content. It focuses on a reference case, reflecting a scenario on which current energy policies will be maintained unchanged throughout the period covered.
- The study points out that we are enduring the worst economic crisis since the 2nd World War. It is also difficult to establish how long the current crisis will last. Given these premises, the agency estimates cumulative average annual growth in global GDP of 3.5%, a rate 0.5% lower than the figure employed in the 2008 report.
- The study expresses the belief that the current crisis will lead to a downward trend in global energy demand up until 2010. From this date onwards, most nations will resume normal rates of growth in revenue and energy consumption. From 2006 up to 2015 worldwide energy demand will have risen by 17%, and by 22.8% from 2015 to 2030. China and India will see the largest energy growth outside the OECD, and will set the tone for worldwide energy consumption.
- As the world economy gradually recovers, oil prices will rise, and are expected to climb in real terms up to 2030. In year 2007 USD terms, the study calculates a figure of $61/barrel in 2009; $110/barrel in 2015 and $130/barrel in 2030.
- As in previous studies, the greatest growth in energy demand over the period 2006 to 2030 is expected to come from non-OECD countries, most of which have considerable potential for growth.
- Estimated crude oil consumption would rise from 85 million barrels per day in 2006 to 91 million by 2015 and 107 million barrels per day in 2030. Only in the transport sector will the reaction in demand be relatively slight (low demand-price elasticity) with regard to the substantial increase expected in prices. It should be pointed out that in the study referred to here the price of crude in 2030 is 80% higher than the estimate in the study published a year earlier. Expected demand for oil products in 2030 would also be just 9% lower than the forecast for the same date published in the 2008 study.
- Although demand for oil derivatives will continue to increase, oil's share of the overall energy consumption mix will decline: 36.5% in 2006; 33.2% in 2015 and 31.8% in 2030. At this point it will remain the world's leading source of primary energy, followed by coal (28%) and natural gas (23.3%).
- Unconventional liquid resources (including oil sands, heavy crude, biofuel, etc.) are expected to rise from 3.1 to 13.4 million barrels per day, 13% of the global supply of liquid products by 2030.
- Unconventional gas is the greatest contributor to the output of natural gas in the USA. The increase in prices and technological advances will help it to continue expanding its share: from a 46% contribution to total natural gas output in the USA in 2006 it will rise to 56% of all output by 2030.
- Worldwide natural gas consumption will increase by 47% between 2006 and 2030. Demand for natural gas will remain solid after the period of economic crisis. Gas prices will climb less sharply than those of oil products, and this advantage will go hand in hand with strong demand from Industrial markets (gas will continue to be the most heavily used energy source in the sector) and from electrical generation.
- Demand for natural gas will rise at an average year-on-year rate of 1.6% over the period. Its share of the global energy mix will rise from 22.9% in 2006 to 23.8% by 2015 and reach the aforementioned figure of 23.3% by 2030.
- Among the countries of the OECD Europe, consumption of natural gas will rise at an average annual rate of 1%, mostly as a result of its use for electrical generation.
- Worldwide consumption of coal will rise by 50% over the period, giving an annual rate of increase of 1.7%, the highest of all non-renewable energy sources. The greatest increase would come in Asia, which will account for 90% of the entire increase in global demand. Coal consumption in Chinese industry would rise by 60% and the installed power at generating stations using this form of fuel will rise threefold.
- Renewable energies will grow by 3% cumulative per year, compared with a 1.5% average rate of growth in overall energy demand.
- Net electrical generation would rise by 77% in the reference case, at an annual rate of 2.4%. The use of renewables in electrical generation will increase by 2.9% per year, mainly on the basis of hydroelectricity in developing countries and wind power in OECD and Asian nations. Their share will rise from 19% to 21% by 2030. In terms of the rate of increase, renewables are followed by natural gas (2.7% increase per annum), and then coal.
- Nuclear electrical generation will increase by 41% over the period. Despite the continuing uncertainty regarding this form of energy, the most recently published IEA report here discussed expects generation by the year 2025 to the 25% higher than it had, for example, estimated in its 2004 report.
- The forecast made (at all times for the reference case) regarding CO2 emissions expects a worldwide increase of 39% over the period 2006-2030. The greatest increase will come in non-OECD member countries. In 2006 the overall emissions of these countries were 14% higher than those of the OECD as a whole. The study suggests that by 2030 they will be 77% higher.
As in previous years, the International Energy Agency in 2009 published its study of long-term energy forecasts. In late October the IEA published an advance release (Special early excerpt of the World Energy Outlook 2009 for the Bangkok UNFCCC meeting); the full edition was released in November: World Energy Outlook 2009).
In the introduction to the Study, Nobuo Tanaka, the Executive Director of the IEA, indicate that the WEO-2009 has a clear message: if the world continues its current energy policies, the impact of climate change will be severe. Energy, which accounts for two thirds of greenhouse gas emissions, is at the heart of the problem, and is at the same time the core of the solution.
Yvo de Boer, the Executive Secretary of the UNFCC, indicated in an introductory text to the study that the WEO-2009 is the first comprehensive analysis to include the impact of the crisis on the energy sector.
The messages to be drawn from the WEO-2009 are, according to Mr. de Boer, quite clear:
- A continuation of current energy policies could have catastrophic consequences for the climate.
- With a view to reducing emissions, the financial and economic crisis has given us the opportunity to shift the global energy system onto a path heading towards the 450 ppm scenario.
- This is a unique opportunity, but action is required from all nations. The cost is affordable for the world energy system.
- Restructuring of the energy system will also generate economic development, energy security, human well-being and other environmental benefits.
The Reference Scenario takes into account government policy announced or adopted as far as mid-2009, although many of these programmes have not yet been implemented. It, for example, includes measures taken or announced to limit greenhouse gas emissions or to promote renewable energies. It also assumes that energy consumption subsidies (a standard practice in a number of developing or hydrocarbon-rich countries) will gradually be eliminated.
The IEA analysis presented in WEO-2009 indicates that this scenario (when projected as far as 2050 or in the longer term) would lead to a concentration of greenhouse gases of around 1000 ppm (ppm) of CO2.
Scenario 450 analyses measures to force a downturn in emissions connected with energy, along a path consistent with achieving the goal of bringing atmospheric concentrations of greenhouse gases down to 450 ppm. This level of concentration would (according to the most widely accepted models) lead to a rise in temperature of 2° C by 2030.
The limit on the concentration of greenhouse gases (450 ppm of CO2 equivalent) is less than half the concentration which would occur on the Reference Scenario.
The reduction in emissions in Scenario 450 could be achieved purely through advances in potential mitigation in all regions of the planet, in line with the principle of shared but different responsibilities.
The IEA study divides countries into three groups:
| 1. | OECD countries and EU members not in the OECD. |
| 2. | Other key economies (Brazil, China, Middle East, Russia and South Africa). |
| 3. | Remaining countries. |
The main results of an analysis of Scenario 450 are as follows:
- All countries achieve substantial levels of reduction compared with the Reference Scenario. Total emissions from countries in Group 1 see a sustained drop from 13.1 Gt (gigatonnes) in 2007 (the reference year) to 7.2 Gt in 2030. Emissions from the Group 2 region fall from 12.2 Gt in 2020 to 11.1 Gt in 2030, still 14% above emissions for the year 2007. Group 3 emissions rise over the course of the period up until 2030.
- Most of the reductions in emissions compared with the Reference Scenario are achieved through energy efficiency measures. Significant reductions are also achieved through changes in the electrical generation mix.
- The WE0-2009 presents an estimate that implementation of the measures included in Scenario 450 would increase investment over the period 2010-2030 by 10.5 trillion USD. The greatest increase will be in the transport sector (4.7 trillion USD), through more efficient but more expensive vehicles. The additional investment in construction would be 2.5 trillion USD, along with an additional 1.5 trillion USD required in the generation sector. More than three quarters of the additional investment (8.1 trillion USD) would be required in the last decade of the period studied, as most of the emissions reductions would occur between 2020 and 2030.
- In fact, on Scenario 450, in 2020 overall emissions worldwide would be 6% higher than emissions in 2007. On this same scenario, the intensity of CO2 emissions from the generation sector would fall by 21%, and by 37% in the transport sector, comparing 2020 with the year 2007. Meanwhile, there would be a 3% increase by 2020 in overall emissions from residential and tertiary facilities and 9% from industry.
The chief conclusions of the estimates based on the Reference Scenario are as follows:
- Total energy demand worldwide is expected to rise at a cumulative rate of 1.5% per year between 2007 and 2030 (40% increase over the period). Developing Asian countries (2.9% annual increase) and the Middle East will be the main sources of this growth. The rise is lower than that estimated in the 2008 edition (1.6% annual rise, 45% over the period), reflecting the impact of the economic and financial crisis and the governmental measures introduced.
- 90% of the growth in demand will be seen in non-OECD countries, and China will over this period account for 39% of the increase in demand. Europe's figures will grow at an annual rate of 0.2%.
- Fossil fuels will continue to dominate the primary energy sources used worldwide in 2030, accounting for three quarters of energy needs.
- Coal will see the greatest growth in absolute terms, followed by natural gas and oil. The main factors dictating the increase in gas and coal usage will be in electrical generation. Electrical consumption will rise by an average of 2.5% over the period.
- According to the IEA Report, 48% of new installed power worldwide would use coal, and 20% natural gas.
- Natural gas will play a key role in energy policy. Demand will continue to increase, even on Scenario 450. On the Reference Scenario, demand for gas will rise by 40% over the period (1.5% per year), representing a global energy share of 21% by 2030, similar to its share in 2007. On Scenario 450 the increase in demand for gas would be 17% from 2007 to 2030. Measures to increase efficiency and support for low-carbon technologies would, according to the IEA, provide the basis for this reduced increase.
- The use of renewable energies will see the greatest rate of increase of all sources. They would, however, contribute 14% of global energy needs by 2030, compared with 12% in 2007.
