Energy Outlook

Oil

Oil is expected to be the slowest growing of the major fuels to 2035, with demand growing at an average of just 0.8% a year. Nonetheless, this will still result in demand for oil and other liquid fuels being nearly 19 million barrels a day higher in 2035 than 2012. All the net demand growth is expected to come from outside the OECD – demand growth from China, India and the Middle East will together account for almost all of net demand growth.

Growth in the supply of oil and other liquids (including biofuels) to 2035 is expected to come mainly from the Americas and Middle East. More than half of the growth will come from non-OPEC sources, with rising production from US tight oil, Canadian oil sands, Brazilian deepwater and biofuels more than offsetting mature declines elsewhere. Increasing production from new tight oil resources is expected to result in the US overtaking Saudi Arabia to become the world’s largest producer of liquids in 2014. US oil imports are expected to fall nearly 75% between 2012 and 2035.

OPEC’s share of the oil market is expected to fall early in the period, reflecting growing non-OPEC production together with slowing demand growth due to high prices and increasingly efficient transport technologies. OPEC market share is expected to rebound somewhat after 2020.

Gas

Natural gas is expected to be the fastest growing of the fossil fuels – with demand rising at an average of 1.9% a year. Non-OECD countries are expected to generate 78% of demand growth. Industry and power generation account for the largest increments to demand by sector. LNG exports are expected to grow more than twice as fast as gas consumption, at an average of 3.9% per year, and accounting for 26% of the growth in global gas supply to 2035.

Shale gas supplies are expected to meet 46% of the growth in gas demand and account for 21% of world gas and 68% of US gas production by 2035. North American shale gas production growth is expected to slow after 2020 and production from other regions to increase, but in 2035 North America is still expected to account for 71% of world shale gas production.

Coal

After oil, coal is expected to be the slowest growing major fuel, with demand rising on average 1.1% a year to 2035. Over the period, growth flattens to just 0.6% a year after 2020. Nearly all (87%) of the net growth in demand to 2035 is expected to come from just China and India, whose combined share of global coal consumption will rise from 58% in 2012 to 64% in 2035.

Other

Nuclear energy output is expected to rise to 2035 at around 1.9% a year. China, India and Russia will together account for 96% of the global growth in nuclear power, while nuclear output in the US and EU declines due to expected plant closures.

The growth in hydroelectric power is expected to moderate to 1.8% a year to 2035, with nearly half of the growth coming from China, India and Brazil.

Renewables are expected to continue to be the fastest growing class of energy, gaining market share from a small base as they rise at an average of 6.4% a year to 2035. Renewables’ share of global electricity production is expected to grow from 5% to 14% by 2035. While the OECD economies have led in renewables growth, renewables in the non-OECD are catching up and are expected to account for 45% of the total by 2035. Including biofuels, renewables are expected to have a higher share of primary energy than nuclear by 2025.