Tom LoBianco, Associate Editor, Platts Inside Energy and Jeff Barber, Chief Editor, Real Time News

World energy consumption will increase 49% in the next 25 years, driven by rapidly developing countries such as China and India, according to the Energy Information Administration. EIA, the statistical arm of the Energy Department, said in its “International Energy Outlook 2010” report, unveiled on May 25 of this year, that hydroelectric and wind power would be the two fastest-growing sources of world energy supply through 2035.
But coal, oil and other fossil fuels will still provide more than 75% of total global demand in the period, EIA said. “Renewables are the fastest-growing source of energy, but they start from a relatively low base,” said Howard Gruenspecht, EIA’s deputy administrator, in unveiling the report at the Center for Strategic and International Studies in Washington.
Developing nations that are not members of the Organization of the Economic Cooperation and Development, or OECD, will account for 87% of the increased energy consumption out to 2035, EIA reported (Figure 1).
EIA estimated that oil prices, which are now hovering around $70 per barrel, would average $133/b by 2035.
But EIA cautioned that prices could soar as high as $210/b or drop to as low as $51/b depending on certain supply and demand factors, as well as efforts to develop ethanol and other non-petroleum biofuels. EIA forecast a similarly wide range of oil prices last year.
The global recession has broadly dampened demand and production of all energy sources in the last two years, but EIA sees both demand and consumption jumping back up to pre-recession levels by 2035.
EIA’s forecasts assume the US will not enact any major changes to US energy policy, such as passing the controversial energy and climate-change bill currently pending in the US Senate.
The forecasts also ignore President Barack Obama’s decree that the US will not approve any new offshore oil and natural drilling until authorities determine the cause of the massive oil spill in the Gulf of Mexico.
Much of the strong forecasted growth in renewables was based on existing policies, passed by the federal government and the states, mandating renewable energy use, Gruenspecht said.
Plans to mandate renewable energy use at the federal level have generally stalled, although Obama and the Democratic- led Congress succeeded in writing signifi cant tax credits and federal support for renewable energy producers into the economic stimulus bill that Congress passed more than a year ago.
US “on track” to double renewables Obama has made doubling renewable energy a priority, and the nation is “on track to do that,” Energy Secretary Steven Chu said in late May.
“When President Obama took offi ce, the renewable energy excluding hydro was something on the order of a little bit less than 4%. He made a pledge to double the amount of renewables, wind and solar—primarily wind—in the next three years. We are on track to do that,” Chu said on MSNBC.