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06/23/2006

Energy Outlook

The Energy Information Administration, an agency of the U.S.
Government, just released its annual report on the world energy
and economic outlook.

Summarizing:

--Projecting from 2003 to 2030, with world economic growth
expected to be at an annual rate of 3.8 percent, total world
consumption of marketed energy will expand from 421
quadrillion British thermal units (Btu) in 2003 to 563 quadrillion
Btu in 2015 and then to 722 quadrillion Btu in 2030, or a 71-
percent increase from 2003 to 2030.

--The expected energy consumption will come from all sources.
Oil remains the dominant energy source over the projection
period, but its share of total world energy consumption declines
from 38 percent in 2003 to 33 percent in 2030, “Largely in
response to higher world oil prices in this year’s outlook, which
dampen oil demand in the mid-term.”

--Worldwide oil consumption rises from 80 million barrels per
day in 2003 (and 85 million today) to 98 million barrels per day
in 2015 and then to 118 million barrels per day in 2030. [Where
the 100, let alone 118 mmbd is going to come from is anyone’s
guess.]

--On natural gas, the International Energy Outlook report has
projected that natural gas would be “the fastest growing energy
source in the mid-term; however, higher natural gas prices in
IEO2006 make coal more cost-competitive, especially in the
electric power sector, and as a result natural gas use and coal use
increase at similar rates. Natural gas rises by an average 2.4
percent per year over the 2003 to 2030 period and coal use by an
average of 2.5 percent per year.”

--“The industrial sector remains the most important end-use
consumer for natural gas worldwide, accounting for 52 percent
of the total growth in natural gas use in the projections; however,
natural gas also remains an important energy source in the
electric power sector.”

--“In this year’s outlook for coal, nearly all regions of the world
show some increase in coal use, except for Japan. In Japan, the
electricity sector continues to be dominated by natural gas and
nuclear power generation. In addition, with its population
growing more slowly, Japan’s electricity demand is likely to
grow slowly, so that new coal-fired capacity additions are
unlikely to be needed.”

[I, for one, never think enough about population trends when
mulling over the energy topic.]

--The largest increases in coal use worldwide are projected for
China and India, where coal supplies are plentiful. [We covered
this last week as well.]

--As for economic growth, the projected growth of 3.8 percent
annually from 2003 to 2030 is higher than the past 30 years
because most of the countries expected to see more rapid growth
are developing nations “that have undertaken significant reforms
over the past several years. Improved macroeconomic policies,
trade liberalization, more flexible exchange rate regimes, and
lower fiscal deficits have lowered their national inflation rates,
reduced uncertainty, and improved their overall investment
climates. More microeconomic structural reforms, such as
privatization and regulatory reform, have also played key roles.
In general, such reforms have resulted in growth rates that are
above historical trends in most of these economies over the past
5 to 10 years.”

Source: Energy Information Administration; eia.doe.gov

Next week, a closer look at India’s economy and the problems
with its educational system.

Brian Trumbore



AddThis Feed Button

 

-06/23/2006-      
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Wall Street History

06/23/2006

Energy Outlook

The Energy Information Administration, an agency of the U.S.
Government, just released its annual report on the world energy
and economic outlook.

Summarizing:

--Projecting from 2003 to 2030, with world economic growth
expected to be at an annual rate of 3.8 percent, total world
consumption of marketed energy will expand from 421
quadrillion British thermal units (Btu) in 2003 to 563 quadrillion
Btu in 2015 and then to 722 quadrillion Btu in 2030, or a 71-
percent increase from 2003 to 2030.

--The expected energy consumption will come from all sources.
Oil remains the dominant energy source over the projection
period, but its share of total world energy consumption declines
from 38 percent in 2003 to 33 percent in 2030, “Largely in
response to higher world oil prices in this year’s outlook, which
dampen oil demand in the mid-term.”

--Worldwide oil consumption rises from 80 million barrels per
day in 2003 (and 85 million today) to 98 million barrels per day
in 2015 and then to 118 million barrels per day in 2030. [Where
the 100, let alone 118 mmbd is going to come from is anyone’s
guess.]

--On natural gas, the International Energy Outlook report has
projected that natural gas would be “the fastest growing energy
source in the mid-term; however, higher natural gas prices in
IEO2006 make coal more cost-competitive, especially in the
electric power sector, and as a result natural gas use and coal use
increase at similar rates. Natural gas rises by an average 2.4
percent per year over the 2003 to 2030 period and coal use by an
average of 2.5 percent per year.”

--“The industrial sector remains the most important end-use
consumer for natural gas worldwide, accounting for 52 percent
of the total growth in natural gas use in the projections; however,
natural gas also remains an important energy source in the
electric power sector.”

--“In this year’s outlook for coal, nearly all regions of the world
show some increase in coal use, except for Japan. In Japan, the
electricity sector continues to be dominated by natural gas and
nuclear power generation. In addition, with its population
growing more slowly, Japan’s electricity demand is likely to
grow slowly, so that new coal-fired capacity additions are
unlikely to be needed.”

[I, for one, never think enough about population trends when
mulling over the energy topic.]

--The largest increases in coal use worldwide are projected for
China and India, where coal supplies are plentiful. [We covered
this last week as well.]

--As for economic growth, the projected growth of 3.8 percent
annually from 2003 to 2030 is higher than the past 30 years
because most of the countries expected to see more rapid growth
are developing nations “that have undertaken significant reforms
over the past several years. Improved macroeconomic policies,
trade liberalization, more flexible exchange rate regimes, and
lower fiscal deficits have lowered their national inflation rates,
reduced uncertainty, and improved their overall investment
climates. More microeconomic structural reforms, such as
privatization and regulatory reform, have also played key roles.
In general, such reforms have resulted in growth rates that are
above historical trends in most of these economies over the past
5 to 10 years.”

Source: Energy Information Administration; eia.doe.gov

Next week, a closer look at India’s economy and the problems
with its educational system.

Brian Trumbore