While industry and policymakers debate the best forms of energy to invest in, world demand for all of it continues to grow, according to a report released this month from the U.S. Energy Information Administration.
The Administration's International Energy Outlook 2013 found that world energy use is likely to jump 56 percent through 2040, with almost half of that increase coming from the growing economies of China and India.
“This will have a profound effect on the development of world energy markets,” EIA Administrator Adam Sieminski said.
The report shows a strong growth in renewable forms of energy, but finds that fossil fuels will continue to dominate global energy use for the foreseeable future.
“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 support almost 80 percent of world energy use through 2040,” the report stated.
World use of oil and other liquid fuels is expected to grow to 115 million barrels a day in 2040, up from 87 million barrels per day in 2010.
The boost in demand is likely to fuel continued growth in the oil patch in Oklahoma and throughout North America.
To meet the projected demand, oil production must increase by 28.3 million barrels per day by 2040.
The report projected that about 60 percent of the new production will come from non-OPEC nations.
Almost two-thirds of the demand growth for oil is expected to come from the transportation sector as the demand for cars balloons, especially in China and India. Most of those cars will run on diesel or gasoline.
“Although advances in non-liquids-based transportation technologies are anticipated, they are not enough to offset the rising demand for transportation services worldwide,” the report stated.
To meet that rapidly increasing demand, prices are likely to grow respectively. The report estimates that oil will cost $163 a barrel in inflation-adjusted dollars in 2040.
Like any 30-year projection, the report includes several caveats. One such variable has to do with conservation. The report points out that policy changes and high energy costs could slow the demand growth.
“High sustained oil prices can affect consumer demand for liquid fuels, encouraging the use of less energy or alternative forms of energy, but also encouraging more efficient use of energy,” the report stated.
It found natural gas to be the fastest-growing fossil fuel in the mix, adding 1.7 percent per year and pushing natural gas demand to 185 trillion cubic feet in 2040, up 64 percent from 113 trillion cubic feet in 2010.
The report also found that with increased use of fossil fuels, global carbon dioxide emissions also would increase, adding 46 percent to 45 billion metric tons in 2040.