Natural gas, renewables expected to grow significantly
The EIA released this year’s International Energy Outlook today, outlining expected trends in energy through 2040.
The International Energy Outlook predicts that total world energy consumption will grow by 28 percent between 2015 and 2040, primarily driven by non-OECD countries. Non-OECD Asia will account for 60 percent of all energy consumption growth in the period. Significant growth is expected in natural gas and renewables consumption, with increases also seen in oil and nuclear power.
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Source: EIA
OPEC will continue to fuel most demand growth
The IEO projects that oil and other liquids will remain the primary world energy source, with consumption growing by 18 percent in upcoming years. Like most other sectors, the growth in oil consumption will be driven by non-OECD countries, as OECD demand is projected to be roughly constant in upcoming years. The EIA expects OPEC to provide most of the increase in oil supply, with only small increases coming from non-OPEC nations.
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Source: EIA
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Source: EIA
Natural gas consumption will increase 43 percent thanks to China
Natural gas consumption is expected to increase by 43 percent through 2040, driven by increases in China. Increasing demand for low carbon intensity, reliable power will drive significant expansion natural gas in electricity generation.
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Source: EIA
Near the end of the projection, natural gas is also expected to see significant growth as a transportation fuel. According to the EIA, new rules on marine fuels and the growing spread between oil and natural gas prices are projected to lead to a greater use of LNG as a maritime fuel towards the end of the projection.
Related: Does Russia Really Need The OPEC Deal?
The Middle East, U.S. and China are each projected to see significant increases in natural gas production, growing significantly more than any other area.
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Source: EIA
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Source: EIA
Renewables and nuclear power are projected to grow at the highest rate, at 2.3 percent/year and 1.5 percent/year respectively. The vast majority of growth in each energy source is due to China, which is predicted to add significant renewable and nuclear capacity in coming years.
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Source: EIA
Coal stays flat
The only major energy source that is not projected to see significant growth through 2040 is coal, which will likely be flat. In both OECD countries and China coal consumption is projected to decline by about 0.6 percent per year, and the commodity will drop from 27 percent of energy consumption now to 22 percent in 2040.
Related: EIA: Coal Is Dying As Renewables Rise
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How EIA projections stack up to BP, Exxon: BP expects more non-OPEC oil growth, Exxon expects more nuclear
This projection is broadly similar to those released by BP (ticker: BP) and ExxonMobil (ticker: XOM) earlier this year. BP predicts that non-OECD countries, particularly China and India, will drive most growth in energy demand in upcoming years. One of the largest differences between BP’s predictions and the EIA’s is that BP predicts that non-OPEC countries will see significant increases in oil supply, while the EIA predicts that most future supply growth will be supplied by OPEC.
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Source: BP
Exxon predicts a much smaller growth in renewable energy than BP or the EIA, with renewables only slightly increasing their share of overall energy production. Exxon does, however, predict significant growth in nuclear power, which the company expects to double its share of energy production by 2040. Each source does agree that natural gas will demonstrate significant growth in the future, exceeding coal sometime near 2030.
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Source: ExxonMobil
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Source: ExxonMobil
By Oil and Gas 360
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