Projections point to strong growth in world energy use

Washington, D.C.

Worldwide energy consumption grows by 60 percent over the next two decades, according to the reference case projection released recently by the Energy Information Administration (EIA) in its annual forecast of international energy demand.

The International Energy Outlook 2002 (IEO2002) expects much of the growth to occur in the developing world, with the regions of developing Asia (including China, India, and South Korea) and Central and South America leading the way as their consuming patterns increasingly resemble those of the industrialized world

Energy markets were influenced by a host of developments in 2001. High world oil prices persisted from 2000 into the first half of 2001 and then weakened substantially in the third quarter of the year. The markets also were affected by the global economic slowdown, led by a mild economic turndown in the United States and the aftermath of the terrorist attacks on the United States on Sept. 11, 2001.

Report highlights include:

“- Natural gas remains the fastest growing component of primary world energy consumption. Over the IEO2002 forecast period, gas use is projected to nearly double in the reference case, reaching 162 trillion cubic feet in 2020. The natural gas share of total energy consumption is projected to increase from 23 percent in 1999 to 28 percent in 2020, and natural gas is expected to account for the largest increment in electricity generation (accounting for 43 percent of the total additional energy used for electricity generation). Much of the projected growth in natural gas consumption is in response to rising demand for natural gas to fuel efficient new gas turbine power plants.

“- Carbon intensity, the amount of carbon dioxide emitted per dollar of gross domestic product (GDP), is projected to improve throughout the world over the next two decades, although total carbon dioxide emissions are projected to increase by 62 percent between 1999 and 2020. The most rapid improvements in carbon intensity are, for the most part, projected for the transitional economies of Eastern Europe and the former Soviet Union (EE/FSU). In the FSU, economic recovery from the upheavals resulting from the dissolution of the Soviet Union is expected to continue throughout the forecast. The FSU nations are also expected to replace old and inefficient capital stock and increasingly use less carbon-intensive natural gas for electricity generation and other end uses in place of more carbon-intensive oil and coal. China and India are also expected to see fairly rapid improvements in carbon intensity over the projection period, primarily as a result of large increases in economic growth. Both China and India are expected to continue their heavy dependence on fossil fuels, especially coal, but their combined annual GDP growth is projected to average 6.6 percent, compared with an expected 4.4 percent annual increase in fossil fuel use from 1999 to 2020.

“- Although past editions of the Outlook have projected sharp drops in nuclear generating capacity at the end of the forecast horizon, extensions of operating licenses (or the equivalent) for nuclear power plants among the industrialized countries dampens the rate of decline in this year

IEO2002 is available on EIA’s Web Site at http://www.eia.doe.gov/oiaf/ieo/index.html.

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