Consumption of liquid fuels—petroleum, mainly—will stabilize or even fall a bit over the coming quarter century in the places that have long used the lion’s share, like the United States, Europe and Japan. But with large increases in China, India and the Middle East, global consumption will rise even more than previously thought, U.S. energy forecasters said on Tuesday.
In its latest gaze into the future, the U.S. Energy Information Administration ratcheted down projected consumption in countries with mature economies just slightly while boosting the forecast for countries with developing economies by 9 percent. As a result, Asia and the Middle East are expected to account for 85 percent of the increase as liquid fuels consumption rises to 119 million barrels per day in 2040, up 38 percent from 2010. The earlier EIA forecast had global consumption at 115 million barrels per day in 2040.
As it happened, the EIA report was released the same day the World Meteorological Organization said that “CO2 levels increased more between 2012 and 2013 than during any other years since 1984.”
The EIA said expectations for future economic growth dictated its hike in forecast overall consumption and its increasingly diverging regional projections.
“The fastest economic growth is projected for the non-OECD region, with GDP increasing by an average of 4.6% per year from 2010 to 2040,” the report said. “In contrast, GDP in the OECD region rises by only 2.1% per year over the same period.”
The United States now consumes about 18.4 million barrels of liquid fuels per day, one-fifth of the world total, well ahead of the nearest country, China, at 11.1 million barrels per day. The U.S. figure represents a decline from the 20.7 million barrels the country gobbled up every day in 2005, and after a slight increase over the coming five years, the EIA sees daily U.S. consumption sliding back down to 18.4 million barrels by 2040.
A similar story has been and is expected to continue unfolding in Europe and Japan, who together about match U.S. consumption.
“After a long period of sustained high oil prices, improvements in conservation and efficiency have reduced or slowed the growth of liquid fuels use among mature oil consumers,” the EIA said in the report, International Energy Outlook 2014:World Petroleum and Other Liquid Fuels.
But China, India and the Middle East are a different matter entirely. There the trend lines point only upward, with behemoth China and its ever-surging economy leading the way.
In 2005, the country used 6.7 million barrels of liquid fuels per day. That figure has already risen to 11.1 million, and with continued increases China will pass the United States as the world’s biggest consumer of liquid fuels by 2035, according to the EIA forecast. In 2040, China will consume 20 million barrels per day.
“As China’s economy moves from dependence on energy intensive industrial manufacturing to services, the transportation sector becomes the most significant source of growth in liquid fuels use,” the EIA said. Efficiency improvements that OECD countries will take advantage of will be available in non-OECD countries, the report noted, “but the sheer scale of growth in demand for transportation services in relatively underdeveloped transportation networks overwhelms the advantages of those improvements.”
As of 2010, crude and its close cousin lease condensate (tight oil, shale oil, extra-heavy oil, and bitumen) made up 86 percent of what the EIA calls liquid fuels. That proportion will drop to about 82 percent by 2040, mostly as byproducts of natural gas production are used more.
What of biofuels? Linda Doman, lead analyst on the report, said that waning policy support has led the EIA to dial back its growth projections for plant-based fuels. Production will rise from 1.3 million to 3 million barrels per day, but that will still represent just 2.5 percent of all liquid fuels. Meanwhile, coal-to-liquid and gas-to-liquid fuels will grow at a much faster rate, increasing from a mere 0.3 million barrels per day in 2010 to 1.4 million in 2040.
“Over the years we’ve had higher biofuels, because there were a lot more policies suggesting there would be more,” Doman said in an interview. “But some countries have backed away from those policies, especially in Europe.”