Balancing energy demand and efficiency is becoming an increasingly critical factor in the future of the industrial sector, not to mention entire economies. Factoring in availability, versatility and affordability, which energy sources will meet most of the world’s needs in the coming years, and how much will efficiency gains curb demand growth? Examining long-term projections, IMT looks at the roles traditional and renewable energy sources will play through 2030.

Expanding prosperity for a growing world population will drive a 35 percent increase in energy demand between 2005 and 2030 — even with significant efficiency gains — according to Exxon Mobil Corporation’s latest energy outlook, released earlier this year. Rapid economic growth and expanding prosperity in developing countries that are not part of the Organization for Economic Co-operation and Development (OECD) will drive an increase in their energy demand of more than 70 percent in 2030 compared to 2005, the multinational oil and gas corporation reports.

In contrast, improvements in energy efficiency are expected to help keep energy demand in OECD countries essentially flat over the period to 2030, even though the total economic output of these nations is expected to rise by approximately 60 percent. Energy efficiency gains across all sectors of economies worldwide will curb energy demand growth by about 65 percent through 2030.

“[E]nergy efficiency — measured very broadly as energy per unit of GDP — continues to improve globally, and at an accelerating rate,” oil giant BP Plc says in its own 2030 energy outlook. “In 2010-30, this is true for the global average and for almost all of the key countries and regions.”

Rising electricity demand — and the choice of fuels used to generate that electricity — will have a major impact on the global energy landscape over the next two decades. ExxonMobil forecasts global electricity demand will rise by more than 80 percent during the 2005-2030 period. In the non-OECD countries alone, demand is expected to soar by more than 150 percent as economic and social development improve and more people gain access to electricity.

Natural gas, oil and coal will continue to meet most of the world’s needs during this period, as “no other energy sources can match their availability, versatility, affordability and scale,” the ExxonMobil report states. The fastest-growing of these fuels will be natural gas, reflecting its abundance, versatility and economic advantages as an efficient, clean-burning fuel for power generation. Natural gas is set to emerge as the second-largest energy source behind oil.

“The forecasts also show a shift toward natural gas as businesses and governments look for reliable, affordable and cleaner ways to meet energy needs,” Rex Tillerson, chairman and CEO of ExxonMobil, said in a statement. “Newly unlocked supplies of shale gas and other unconventional energy sources will be vital in meeting this demand.”

Demand for natural gas for power generation is forecast to rise by about 85 percent from 2005 to 2030, when natural gas will provide more than a quarter of the world’s electricity needs. Natural gas demand is rising in every region of the world, but growth is strongest in non-OECD countries — particularly in China, where demand in 2030 is forecast to be approximately six times what it was in 2005.

“[E]fforts to ensure reliable, affordable energy while also limiting greenhouse gas emissions will lead to polices in many countries that put a cost on carbon dioxide emissions,” according to Exxon’s outlook. “As a result, abundant supplies of natural gas will become increasingly competitive as an economic source of electric power as its use results in up to 60 percent fewer CO₂ emissions than coal in generating electricity.”

Wind, solar and biofuels are expected to grow sharply through 2030, at nearly 10 percent per year on average. However, because they are starting from a small base, their contribution by 2030 is likely to remain limited, at about 2.5 percent of total energy. BP, on the other hand, says that renewables (including biofuels) will account for 18 percent of energy growth to 2030.

“The rate at which renewables penetrate the global energy market is similar to the emergence of nuclear power in the 1970s and 1980s,” according to BP’s projections.

Nearly 80 percent of the global energy supply could be met by renewables by 2050 if backed by proper policies, a 2011 report from the United Nations indicates.

Spotlight on the U.S.
In the United States, total consumption of liquid fuels, including fossil fuels and biofuels, is expected to rise from about 18.8 million barrels per day in 2009 to 21.9 million barrels per day in 2035, according to the U.S. Energy Information Administration (EIA). Although consumption of all fuels is forecast to increase, the aggregate fossil fuel share of total energy use is expected to fall by about 5 percent over the next 25 years, from 83 percent in 2009 to 78 percent in 2035. During this time, the renewable share of total energy use is expected to increase from 8 percent 2009 to 13 percent in 2035, the EIA says in its 2011 Annual Energy Outlook.

From 2009 to 2035, the petroleum share of liquid fuel use is forecast to decline as consumption of alternative fuels increases and petroleum use remain roughly flat.

Moreover, reliance on petroleum imports as a share of total liquids consumption is projected to fall in the long term. The import share, which reached 60 percent in 2005 and 2006 before dropping to 51 percent in 2009, is expected to fall to 42 percent in 2035, the EIA says.

The decline of U.S. reliance on imported fuels would be due to increased domestic production, including biofuels, and greater fuel efficiency. Domestic shale gas resources will support increased natural gas production with moderate prices, growing almost fourfold from 2009 to 2035 when it accounts for 47 percent of total U.S. production, up considerably from the 16 percent share in 2009.

“EIA’s projections indicate strong growth in shale gas production, growing use of natural gas and renewables in electric power generation, declining reliance on imported liquid fuels, and projected slow growth in energy-related carbon dioxide emissions in the absence of new policies designed to reduce them,” according to EIA Administrator Richard Newell.

Resources

2010 The Outlook for Energy: A View to 2030
ExxonMobil Corporation, Jan. 27, 2011

…Outlook Shows Rising Global Energy Demand…
ExxonMobil Corporation, Jan. 27, 2011

BP Energy Outlook 2030
BP Plc, Jan. 19, 2011

World Energy Growth over the Next 20 Years…
BP Plc, Jan. 19, 2011

Annual Energy Outlook 2011
U.S. Energy Information Administration, April 26, 2011

EIA Examines Alternate Scenarios for the Future of U.S. Energy
U.S. Energy Information Administration, April 26, 2011

Summary for Policymakers: Special Report Renewable Energy Sources
Intergovernmental Panel on Climate Change, May 2011

Renewables Major Part of 2050 World Energy Mix: UN
by Marlowe Hood Marlowe Hood
Agence France-Presse, May 6, 2011

GWEC Projects Recovery in Global Wind Energy Market
Global Wind Energy Council, March 15, 2011

Solar Energy Market Growth
Solarbuzz, 2010

Short-Term Energy Outlook
U.S. Energy Information Administration, May 10, 2011

Economic Outlook: Energy
Kiplinger, June 3, 2011 (last updated)

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