WASHINGTON (Dow Jones Newswires), Sep. 19, 2011
World energy consumption will grow 53% by 2035, led by demand growth in India and China, the U.S. Energy Information Administration said Monday in a report.
The 2011 International Energy Outlook predicts that consumption of energy from renewable sources will be the fastest growing energy sector, reaching 15% of the world energy use by 2035 compared to 10% in 2008. But fossil fuels will still be the world's dominant source, accounting for about 78% of the world's energy use in 2035, the report said.
The EIA said it expects oil prices to remain high, reaching $125 per barrel in 2035, but added that consumption of oil will still grow during that period.
The EIA also said, however, that petroleum prices are "very sensitive to both supply and demand conditions" and that prices could fall to $50 per barrel or approach $200 per barrel, depending in part of the rate of economic growth in developing countries.
The report released Monday projects changes in world energy markets between 2008 and 2035. It doesn't take into account the potential impacts of policy changes that have not yet been implemented.
One area that will be particularly sensitive to policy actions: competition between coal, natural gas, and renewable sources to meet electricity demand, said Howard Gruenspecht, the acting EIA administrator, during a speech at the Center for Strategic and International Studies.
The report projects, absent policy changes, tremendous growth in coal consumption by China and to a lesser extent India and other developing countries. That growth is a key driver of a projected increase in worldwide carbon dioxide emissions, which EIA predicted would jump about 43% between 2008 and 2035. China's carbon emissions were somewhat higher than those of the U.S. in 2008, but are projected to be "more than twice as high" as U.S. emissions by 2035, Gruenspecht said.
Natural gas consumption was projected to grow at a faster rate than any other type of fossil fuel, thanks in part to increased supply from the U.S. and elsewhere. Consumption will grow from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035, the report predicted.
Use of nuclear power increases slightly in the EIA projections, but "the full extent of the withdrawal of government support for nuclear power is uncertain" in the wake of the Fukushima Daiichi crisis in Japan, Gruenspecht said.
Gruenspecht said that due to budget cuts impacting the EIA, the outlook report might not be released next year. "That's a little bit of question mark in the present resource environment."
Copyright (c) 2011 Dow Jones & Company, Inc.
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