Alternative Economic Growth cases
Expectations for the future rates of economic growth are a major source of uncertainty in theIEO2010projections.
To illustrate the uncertainties associated with economic growth trends, IEO2010 includes a High Economic Growth case and a Low Economic Growth case in addi-tion to the Reference case. The two alternative growth cases use different assumptions about future economic growth paths, while maintaining the same relationships between changes in GDP and changes in energy con-sumption that are used in the Reference case. The alter-native growth cases maintain the oil price path of the IEO2010Reference case.
In the High Economic Growth case, 0.5 percentage point is added to the annual growth rate assumed for each country or country grouping in the Reference case. In the Low Economic Growth case, 0.5 percentage point is sub-tracted from the Reference case annual growth rates.
The IEO2010Reference case shows total world energy consumption reaching 739 quadrillion Btu in 2035—281 quadrillion Btu in OECD countries and 458 quadrillion Btu in non-OECD countries. In the High Growth case, world energy use in 2035 totals 810 quadrillion Btu—71 quadrillion Btu (about 35 million barrels oil equivalent per day) higher than in the Reference case. In the Low Growth case, total world energy use in 2035 is 60 qua-drillion Btu (30 million barrels oil equivalent per day) lower than in the Reference case. Thus, the projections for 2035 in the High and Low Economic Growth cases span a range of uncertainty equal to 134 quadrillion Btu (Figure 22).
Alternative Oil Price cases
Assumptions about world oil prices are another impor-tant factor that underscores the considerable uncertainty in long-term energy market projections. The effects of different assumptions about future oil prices are illus-trated inIEO2010by two alternative oil price cases. In the High Oil Price case, world oil prices (in real 2008 dol-lars) climb from $59 per barrel in 2009 to $210 per barrel in 2035; in the Low Oil Price case, they decline to $52 per barrel in 2015 and remain approximately at that real level through 2035. In comparison, world oil prices rise to $133 per barrel in 2035 in the Reference case (Figure 23). These three oil price cases are the same as those used in EIA’sAnnual Energy Outlook 2010.
Although the difference in world oil prices between the High and Low Oil Price cases is considerable, the projec-tions for total world energy consumption in 2035 do not vary substantially among the cases. The projections for total world energy use in 2035 in the High and Low Oil Price cases are separated by 33 quadrillion Btu (Figure 24), as compared with the difference of 134 quadrillion Btu between the High and Low Economic Growth cases.
The most substantial impacts of the high and low oil price assumptions are on the mix of energy fuels con-sumed in each region—particularly, fossil fuels (Figure 25). In the High Oil Price case, total world liquids con-sumption in 2030 is about 31 quadrillion Btu lower (about 15 million barrels per day oil equivalent), coal consumption in 2035 is 7 quadrillion Btu higher, natural gas consumption is 5 quadrillion Btu higher, and renew-able energy use is 2 quadrillion Btu higher than pro-jected in the Reference case. The difference in nuclear power consumption between the two cases is small.
In theIEO2010Reference case, world oil prices begin to rise after 2009 and reach $133 per barrel by 2035. As a result, liquids consumption is curtailed in countries that
20 U.S. Energy Information Administration / International Energy Outlook 2010
1990 2000 2007 2015 2025 2035
0
Figure 22. World marketed energy consumption in three Economic Growth cases, 1990-2035 (quadrillion Btu)
1990 2000 2009 2015 2025 2035
0 Figure 23. World oil prices in three Oil Price cases, 1990-2035 (2007 dollars per barrel)
have other fuel options available—especially in the elec-tric power sector, where coal and other fuels can be sub-stituted. Worldwide use of liquids for electricity generation, which falls by 1.5 quadrillion Btu from 2007 to 2035 in the Reference case, increases by 1.7 quadrillion Btu in the Low Oil Price case, as non-OECD countries retain their oil-fired generating capacity in the lower price environment.
In the Low Oil Price case, consumers increase their use of liquids for transportation, and there is less incentive for movement away from liquids to other energy sources in sectors where fuel substitution is fairly easy to achieve (for example, electricity). Total liquids con-sumption in 2035 is 25 quadrillion Btu (12 million barrels per day) higher in the Low Oil Price case than in the Ref-erence case, reflecting increased demand in all the end-use sectors. In the Low Oil Price case, the industrial sector shows the largest increase in liquids consumption
(14 quadrillion Btu or 7 million barrels per day) in 2035 relative to the Reference case (Figure 26), followed by the transportation sector (7 quadrillion Btu or 3 million barrels per day) and the electric power sector (3 quadril-lion Btu or 2 milquadril-lion barrels per day).
References
2007 2015 2020 2025 2030 2035 0
200 400 600
800 High Oil Price Reference Low Oil Price Figure 24. World marketed energy consumption in three Oil Price cases, 2007-2035 (quadrillion Btu)
Liquids Natural
High Oil Price Reference Low Oil Price Figure 25. World marketed energy consumption by fuel in three Oil Price cases, 2035 (quadrillion Btu)
Figure 26. World liquids consumption by sector in three Oil Price cases, 2035 (million barrels per day)
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