EIA Reports

U.S. DEPARTMENT OF ENERGY
WASHINGTON DC 20585

FOR IMMEDIATE RELEASE
May 6, 1997

The newly emerging Asian economies (including China and India, but excluding the developed countries of Australia, Japan, and New Zealand) contribute 45 percent of the projected increase in world energy consumption between 1995 and 2015 (Figure 1) . Industrial sector growth, which motivates Asia's strong economic performance, is a driving force. Developing Asia accounts for 53 percent of energy demand outside the industrialized world in 2015. Energy consumption in developing Asia exceeds U.S. consumption by 9 percent in 2005, and by 44 percent in 2015 when it surpasses consumption in all of North America.

These projections are subject to much uncertainty especially in China, where energy demand in the transportation sector may undergo considerable change. In the IEO97 reference case, oil demand in developing Asia grows at an annual rate of 4 percent between 1995 and 2015; in China it increases by nearly 5 percent annually. If developments in China's transportation sector follow those already seen in Thailand and South Korea where double-digit growth rates in automobile ownership are expected to continue throughout the 1990s the growth projected in IEO97 could be drastically underestimated.

If world energy consumption reaches the levels projected in the IEO97 reference case, carbon emissions will rise to 9.7 billion metric tons by the end of the forecast period 61 percent higher than in 1990. By 2000, carbon emissions in the non-industrialized world surpass those in the industrialized nations and represent about two-thirds of the total increase in emissions worldwide. The sizable increase in emissions from developing countries is partially a result of their continued heavy reliance on coal (Figure 2) .

Forecast highlights include:

The transitional economies of Eastern Europe and the former Soviet Union (EE/FSU) also represent a major source of uncertainty in the forecast. The IEO97 projects EE/FSU energy growth at 1.8 percent annually over the next two decades, much slower than the 4.2 percent growth rate projected for developing Asia. Countries within the FSU are expected to return to positive economic growth in the late 1990s.

Natural gas is the fastest growing primary energy source over the forecast period (by more than 3 percent annually), gaining share relative to oil and coal (Figure 3) . By 2015, gas demand should surpass coal consumption on a worldwide basis, as resource availability, cost, and environmental considerations all favor its use in industrial applications and electricity generation. Worldwide, natural gas consumption reaches nearly 145 trillion cubic feet by 2015 (85 percent more than in 1995), with the highest regional growth rates seen in the developing countries. In developing Asia gas demand increases by almost 8 percent annually.

World oil prices reach $21 per barrel (in constant 1995 dollars) by 2015 in the IEO97 reference case despite a 51-percent increase in projected oil demand. Relatively stable long-term trends in oil prices are expected because of growing investment opportunities in resource rich producing areas, increased understanding of the world's oil resource base, and improved methods of oil recovery. As a result, large future oil supply increments should be available at relatively stable development and production costs. While oil prices at the end of 1996 were actually higher than those projected for 2015, it is generally believed that higher prices will not continue in the long-term, although short-term issues can often introduce high levels of volatility in energy markets.

Net electricity consumption increases to almost 20 trillion kilowatthours by 2015, a 75-percent increase from the 1995 level of 11.4 trillion kilowatthours. To meet electricity demand projected for 2015, an equivalent of more than 5,000 300-megawatt electric power plants will have to be built. Dramatic structural changes are occurring in electric power industries around the world. In the industrialized world, restructuring of electricity markets is seen as a way to enhance competition, bringing market forces to bear for the benefit of consumers. In the developing world, privatization is seen as a way to attract foreign capital for investment in the energy infrastructure while preserving public capital for other important projects.

The IEO97 is available from the U.S. Government Printing Office or through EIA's National Energy Information Center, Room 1F-048, Forrestal Building, Washington, DC 20585, 202/586-8800. The report and the figures referenced above are available electronically on EIA's Internet Web Site: http://www.eia.doe.gov. Press copies are available from EIA's Press Contact.

EIA Program Contact: Mary J. Hutzler, 202/586-2222

EIA Press Contact: Thomas Welch, 202/586-1178

EIA-97-13

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