Appendix I. Comparisons With International Energy Agency and IEO2008 Projections
Comparisons with IEA’s World Energy Outlook 2008
The International Energy Agency (IEA) in its World Energy Outlook 2008 provides projections that can be compared with those in IEO2009. In both
reports the latest historical year of data upon which the projections are
based is 2006, and both projection horizons extend to 2030. Two time periods
were chosen for purposes of comparison—2006 to 2015 and 2015 to 2030.
Before turning to a discussion of similarities and differences between
the IEO2009 and IEA projections, the divergent aims of the two publications
should be recognized. IEO2009 is most directly comparable with the World
Energy Outlook 2008’s “Part A, Global Energy Trends to 2030.” In contrast
to the World Energy Outlook 2008, which presents a single reference case
scenario, IEO2009 presents alternative scenarios reflecting high and low
economic growth assumptions and high and low oil price assumptions. Economic
growth and oil prices, the latter of which can be affected significantly
by above-the-ground factors as well as the physical availability of petroleum
resources, are two major sources of uncertainly in all energy projections,
as is readily shown by a review of past projections.
EIA believes that a full understanding of energy trends under current laws
and policies requires consideration of the uncertainties. For example,
in the IEO2009 reference case, projected demand for liquid fuels in 2030
is 106.6 barrels per day, or 100.7 barrel per day if biofuels are excluded
to provide a figure directly comparable with the 106.4 barrels per day
of traditional (non-biofuel) liquids in 2030 in the IEA reference case,
which has a world price trajectory similar to that in the IEO2009 reference
case. In the IEO2009 low oil price case, however, in which oil remains
at $50 per barrel through 2030, projected world demand for traditional
liquids in 2030 is significantly higher, at 115.4 million barrels per day;
and in the high oil price case, in which oil prices rise steadily to $200
per barrel (2007 dollars) in 2030, world demand for traditional liquids
in 2030 is only 82.8 million barrels per day.
EIA encourages users of its projections to consider how key energy market
and economic uncertainties, as well as policy decisions, can affect future
energy demand. As shown in IEO2009, alternative oil price scenarios also
have significant impacts on the projected composition of liquids supply,
because they affect the mix between unconventional and conventional oil
sources and the composition of the unconventional component of supply.
Most of the comparisons in this appendix focus on comparisons of projections
for energy demand in the IEO2009 reference case and the IEA’s World Energy
Outlook 2008; however, there is one noteworthy difference in views regarding
the natural gas market in North America, especially the United States.
IEA projects much stronger growth in U.S. natural gas prices (with the
average U.S. imported price of natural gas reaching $16.13 per million
Btu in 2007 dollars in 2030), as well as declining domestic production
and flat demand. IEO2009 also expects U.S. natural gas prices to rise,
but at a much more modest rate, with the average imported price reaching
$8.88 per million Btu in 2030. The IEO2009 analysis of prospects for North
American natural gas, based on work in EIA’s Annual Energy Outlook 2009,
reflects a much brighter outlook for production of unconventional natural
gas, particularly from gas shale, than is assumed by IEA. In EIA’s reference
case projection, the United States becomes virtually self-sufficient in
natural gas supply, at a price much lower than that assumed necessary to
attract significant amounts of liquefied natural gas (LNG) to the United
States in the IEA reference scenario.
In the projection period from the present to 2015, the IEA reference scenario
reflects growth that more closely resembles the IEO2009 high economic growth
case than its reference case. The IEA reference scenario projects an increase
in world energy consumption that averages 2.1 percent per year, as compared
with 2.0 percent per year in the IEO2009 high economic growth. In the IEO2009 reference case, world energy use increases by an average of 1.7 percent
per year (Table I1).
The slower projected near-term growth in the IEO2009 reference case may
reflect, in part, the different release dates for IEO2009 and the World
Energy Outlook 2008. The IEO2009 projections were prepared when preliminary
assessments of the global recession were becoming available (specifically
reflected in the near-term GDP estimates in IHS Global Insight’s November
2008 release), whereas the World Energy Outlook 2008 was released in November
2008, and its projections were formulated several months in advance of
the release. Thus, the IEA report may not have incorporated expectations
based on the impact of the growing global recession.
On a regional basis, both outlooks project much slower growth in energy
demand among the OECD nations than among the non-OECD nations. The IEO2009 reference case, however, projects slower growth in each of the OECD regions
than do the IEA projections. The largest difference among the OECD projections
is for the United States, with IEA projecting an 0.7-percent average yearly
increase and the IEO2009 reference case projecting an average of 0.4 percent
per year.
There is wider variation between the IEA and IEO2009 reports in their projections
for the non-OECD regions. For the non-OECD as a whole, the IEA projections
again resemble those in the IEO2009 high economic growth case rather than
the IEO2009 reference case. On a regional basis, IEA projects non-OECD
growth rates that exceed the IEO2009 projections for non-OECD Europe and
Eurasia, China, India, and the Middle East. For each of those regions and
countries, IEA projects higher growth rates than those in the IEO2009 high
economic growth case.
For two non-OECD regions—other Asia (non-OECD Asia, excluding China and
India) and Africa—IEA projects much slower growth in energy demand to 2015
than does the IEO2009 reference case. For other non-OECD Asia, IEA’s projected
2.1-percent average annual growth rate for energy consumption is lower
than the projection of 3.1 percent per year in the IEO2009 reference case.
In fact, the IEA growth rate falls below the rate in the IEO2009 low economic
growth case. Similarly, IEA projects only a 1.8-percent annual increase
in Africa’s energy use to 2015, compared with 2.3 percent per year in the IEO2009 reference case. Again, the IEA projected growth rate falls below
that in the IEO2009 low growth case.
In the later years of the projections, the differences between the IEO2009 and IEA narrow substantially, with worldwide energy demand growing by 1.4
percent per year between 2015 and 2030 in the IEO2009 reference case and
1.3 percent per year in the IEA projection (Table I2). There remain, however,
some substantial regional differences between the outlooks. For the OECD
region, the largest difference is between the projections for OECD Europe.
The IEA projections for annual growth in OECD Europe’s energy consumption
from 2015 to 2030 are considerably lower than those for 2006 to 2015, and
they are substantially lower than those in the IEO2009 reference case.
In the IEA projections, OECD Europe’s energy use grows by 0.1 percent per
year from 2015 to 2030, which compares with 0.5 percent per year in the IEO2009 reference case and is lower than the projected rate in the IEO2009 low economic growth case.
For the non-OECD region, the greatest differences between the two outlooks
are for non-OECD Asia (China, India, and other non-OECD Asia) and the Middle
East. For China and other non-OECD Asia, IEA anticipates that energy demand
growth will slow to 2.0 percent per year and 1.5 percent per year, respectively,
for the final 15 years of the outlook, whereas the IEO2009 reference case
shows China maintaining a 2.6-percent annual growth rate in energy demand
and other non-OECD Asia a 2.7-percent average growth rate from 2015 to
2030. For both China and other non-OECD Asia, the IEA projections for energy
use are below those in the IEO2009 low economic growth case.
In contrast, for India and the Middle East, the IEA projections for energy
demand growth from 2015 to 2030 are much higher than those in the IEO2009 reference case. The IEA reference scenario projects energy demand growth
in India averaging 3.4 percent per year from 2015 to 2030, whereas the IEO2009 reference case projects an average of 2.3 percent per year. For
the Middle East, IEA expects energy demand to grow by 2.8 percent per year
from 2015 to 2030, as compared with 1.5 percent per year in the IEO2009 reference case. For both India and the Middle East, the IEA projections
exceed those in the IEO2009 high economic growth case.
The projections vary not only with respect to levels of total world energy
demand but also with respect to the mix of primary energy inputs. In the
2006 to 2015 period, IEA expects faster growth in the use of liquids and
coal and slower growth in the use of nuclear and renewable energy sources
than does IEO2009 (Table I3). World liquids consumption in the IEO2009 reference case increases by 0.7 percent per year from 2006 to 2015, compared
with 1.3 percent per year in the IEA reference scenario. The IEO2009 projections
incorporate near-term projections for liquids consumption from EIA’s February
2009 Short-Term Energy Outlook, in which growth rates remain low or decline
through 2010. Again, IEA does not include revisions to near-term economic
and demand expectations that may have been made after November 2008.
The IEA projection for worldwide growth in coal consumption from 2006 to
2015 is bullish in comparison with the IEO2009 projection for all parts
of the world. For China, IEA projects average annual growth of 5.1 percent
in coal demand from 2006 to 2015, compared with 4.8 percent per year in
the IEO2009 reference case. Similarly, India’s coal use grows by 3.9 percent
per year in the IEA reference scenario from 2006 to 2015, compared with
2.2 percent per year in the IEO2009 reference case. For OECD Europe, IEA
projects increases in coal averaging 0.4 percent per year, compared with
a decline of 0.4 percent per year in the IEO2009 reference case from 2006
to 2015.
Differences between the projections for consumption of renewables may be
explained by the fact that IEA includes an estimate for traditional, nonmarketed
biomass in its renewable energy projections, whereas the IEO2009 projections
do not attempt to estimate the use of nonmarketed renewable fuels (which,
in fact, is not likely to expand significantly, because developing countries
tend to move away from traditional fuels to commercial fuels as their energy
infrastructures and standards of living increase). On the other hand, consumption
of traditional fuels in some developing countries is estimated to be quite
large, with effects on total renewable energy use that would tend to mask
any growth in the consumption of energy from marketed, commercial renewable
sources—particularly, wind and other nonhydroelectric renewables.
Differences between the IEA and IEO2009 projections for nuclear energy
are explained in large part by differing expectations for the OECD region,
which account for 85 percent of the world’s total nuclear power use. Although
IEA projects more rapid growth for nuclear power in the OECD Asia region
than is projected in the IEO2009 reference case, it also projects a decline
in OECD Europe. In contrast, in the IEO2009 reference case, nuclear power
use in OECD Europe remains flat through 2015. Because OECD Europe consumes
more than twice as much nuclear electricity as OECD Asia, the decline projected
by IEA for OECD Europe offsets the projected increases for other OECD and
non-OECD regions (including OECD Asia, Non-OECD Europe and Eurasia, and
China) that are larger than those in the IEO2009 reference case.
For the period from 2015 to 2030, the IEO2009 reference case and IEA projections
are largely in agreement, except for nuclear power and renewable energy
sources, for which the IEA growth projections fall significantly below
those in the IEO2009 low economic growth case (Table I4). In the IEA projection,
the average annual growth rate for world nuclear electricity consumption
slows from 1.3 percent in the 2006-2015 period to 0.7 percent in the 2015-2030
period. IEO2009 projects average increases of 1.6 percent per year from
2006 to 2015 and from 2015 to 2030. The IEA reference scenario projects
slower growth for renewable energy use in the later years, decreasing from
2.3 percent per year in the 2006-2015 period to 1.8 percent per year from
2015 to 2030. The IEO2009 reference case also expects the rate of growth
for renewable energy consumption to be slower from 2015 to 2030 than from
2006 to 2015. In the IEO2009 reference case, renewable energy use increases
by 4.5 percent per year from 2006 to 2015 and by 2.1 percent per year from
2015 to 2030.
Comparisons With IEO2008
The IEO2009 outlook for total energy consumption in 2015 is largely the
same as the outlook published in IEO2008. In IEO2009, total marketed energy
consumption in 2015 is projected to be 552 quadrillion Btu, as compared
with 563 quadrillion Btu in IEO2008 (Table I5). There are some relatively
modest regional differences between the two IEOs, centered mostly in North
America. In IEO2009, total energy consumption for the OECD countries in
2015 is about 8 quadrillion Btu lower than was projected in IEO2008. More
than one-half (6 quadrillion Btu) of the difference is attributed to lower
demand in North America, with 4 quadrillion Btu of that difference attributed
to the United States, largely because the economic recession dampens demand
for energy in the near term.
For the non-OECD countries, the differences between the projections for
2015 in IEO2009 and IEO2008 are also modest. In IEO2009, non-OECD energy
use in 2015 is 5 quadrillion Btu (about 1 percent) lower than in the IEO2008 projection. Lower growth in energy demand projected for non-OECD Europe
and Eurasia and non-OECD Asia (excluding China) is offset in part by higher
demand in China and the Middle East. Again, lower economic growth projected
for the near term in non-OECD Europe and non-OECD Asia excluding China,
in view of the recent economic downturn, largely explains the slower projection
for growth in non-OECD energy demand in IEO2009 compared with IEO2008.
The near-term differences between the IEO2009 and IEO2008 projections continue
through to 2030. The IEO2009 reference case projection for total energy
use worldwide in 2030 is 7 quadrillion Btu (about 1 percent) lower than
the IEO2008 projection. Again, the largest regional differences between
the 2030 projections are for the United States and for non-OECD Europe
and Eurasia. In the IEO2009 reference case, the lower U.S. energy demand
is attributed to a combination of higher energy prices and greater use
of more efficient appliances and vehicles in response to the requirements
of the Energy Independence and Security Act of 2007 (EISA2007) and the
Energy Improvement and Extension Act of 2008 (EIEA2008). The reference
case projection for U.S. total energy use in 2030 is 4 quadrillion Btu
(4 percent) lower in IEO2009 than was projected in IEO2008.
For non-OECD Europe and Eurasia, the projections for economic growth were
reassessed and lowered substantially in IEO2009. In IEO2008, GDP growth
in non-OECD Europe and Eurasia was projected to average 4.4 percent per
year from 2005 to 2030; in IEO2009, the average is 3.8 percent per year.
As a result of the downward adjustment in GDP growth, energy consumption
in non-OECD Europe and Eurasia in 2030 is 6 quadrillion Btu lower in IEO2009 than was projected in IEO2008.
Along with regional differences between the IEO2009 and IEO2008 projections,
there are some differences between the two projections in the mix of energy
resources consumed (Table I6). The IEO2009 projections for worldwide consumption
of liquid fuels are 11 quadrillion Btu lower in 2015 and 14 quadrillion
Btu lower in 2030 than the corresponding IEO2008 projections. The difference
can be explained largely by the higher world oil prices in IEO2009. World
oil prices in the IEO2009 reference case are 80 percent higher in 2030
than they were in the IEO2008 reference case.
There are also differences between the IEO2009 and IEO2008 projections
for consumption of the other fossil fuels: the projections for both coal
and natural gas consumption are lower in IEO2009, largely because renewable
energy use is much higher in this year’s projections. As a result, renewable
energy displaces some of the demand for coal and natural gas in the electric
power sector. A more detailed assessment of the worldwide potential for
renewable electric power generation, undertaken in preparing for IEO2009,
resulted in an increase of 13 quadrillion Btu (21 percent) in renewable
energy consumption in 2030 as compared with IEO2008. The projections for
nuclear power in IEO2009 are virtually unchanged on a Btu basis from those
in IEO2008, with nuclear power use in 2030 only 1 quadrillion Btu higher
in IEO2009 than was projected in IEO2008.
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