China, India to Drive World’s Growing Energy Use

July 25, 2013 RYAN TRACY ​ Enlarge ImageEnergy Department’s report Based on current government policies and a model that assumed continued growth in the world-wide economy, the report found that fueling that prosperity will take mostly traditional fossil fuels like oil, coal and natural gas. Those fuels will account for 80% of world energy use through 2040, the report projects. Consumption of natural gas is expected to grow faster than that of oil or coal, with the industrial and electric power sectors leading a shift toward burning more gas, which is being unlocked across the globe thanks to new extraction technologies. At the same time, the report predicts that renewable energy will be the fastest-growing source of the world’s electricity generation, driven by a huge increase in capacity of hydroelectric dams and wind farms. Fadel Gheit , an energy analyst for Oppenheimer & Co., cautioned that “projections are suicidal,” particularly in the energy sector, where technological advances have upended predictions. “Nobody had predicted five years ago that the U.S. would be self-sufficient in natural gas,” Mr. Gheit said. “Now we have gas that we don’t know what to do with.” While the U.S. has led the charge in producing more gas, the Energy Department projects it will have competition. The report says Russia will keep pace with the U.S. in boosting output, particularly in the Russian Arctic, and that China and Canada will increase production as well. By 2040, the U.S. and Russia are each expected to increase annual natural-gas production by about 12 trillion cubic feet from 2010 levels, according to the report. Much of the new production may be steered to meet growing demand in other countries. Russia is planning to transport more gas to China, while more than a dozen firms have proposed export facilities to ship gas from the U.S. to Europe and Asia. Separately, the Energy Department report predicts the world will be producing 116 million barrels of liquid fuel, which is mostly crude oil, in 2040. That is a much less aggressive estimate than an earlier projection in 2007 for 118 million barrels in 2030. “The difference between those two [projections] has more to do with demand than it does with supply,” Mr. Sieminski said. Fuel-efficiency standards, he said, are helping to tamp down demand in some places. In the U.S., regulations adopted by the Obama administration are expected to lower demand for gasoline by 1.5 million barrels per day by 2030. The Energy Department report says that trend could expand to other counties amid high oil prices, which are expected to rise to $163 per barrel world-wide in 2040 from $105 in 2013. That increase could drive consumers to use less or seek alternatives. “The greatest potential for altering the growth path of energy use is in the transportation sector,” the report says. Burning more fossil fuels will increase the amount of carbon dioxide produced world-wide: The report projects that emissions of carbon dioxide, the most common greenhouse gas that scientists have linked to climate change, will increase 46% by 2040. Andrew Steer, president of the World Resources Institute, a think tank that focuses on climate policy, said that result “would be an exceedingly bad outcome for the environmental health of the world,” but it would also mean “we’re not using resources more efficiently, so we’re not benefiting economically from the huge gains that all analysis demonstrates that energy efficiency [provides].” The amount of electricity generated from nuclear power is also expected to more than double from 2010 to 2040. The report says that uncertainty around atomic power has grown since the 2011 nuclear meltdown in Japan, but predicts China, India, Russia and South Korea will move ahead with new nuclear plants. The world will also use more oil and coal in the coming decades, the report projects, though the growth rates are projected to be slower that other energy sources: an average of 1.1% per year for liquid transportation fuels including oil, and 1.3% per year for coal. That compares to projected annual growth rates of 1.7% for natural gas and about 2.5% per year for renewable energy and nuclear power. Taylor Scott International