Preface 

The International Energy Outlook 2006 (IEO2006) presents an assessment by the Energy Information Administration (EIA) of the outlook for international energy markets through 2030. U.S. projections appearing in IEO2006 are consistent with those published in EIA’s Annual Energy Outlook 2006 (AEO2006), which was prepared using the National Energy Modeling System (NEMS). IEO2006 is provided as a service to energy managers and analysts, both in government and in the private sector. The projections are used by international agencies, Federal and State governments, trade associations, and other planners and decisionmakers. They are published pursuant to the Department of Energy Organization Act of 1977 (Public Law 95-91), Section 205(c). 

IEO2006 focuses exclusively on marketed energy. Non-marketed energy sources, which continue to play an important role in some developing countries, are not included in the estimates. The IEO2006 projections are based on U.S. and foreign government laws in effect on January 1, 2006. The potential impacts of pending or proposed legislation, regulations, and standards are not reflected in the projections, nor are the impacts of legislation where the mechanisms for implementing the legislation have not yet been announced. For example, the IEO2006 reference case does not include the potential impacts of the Kyoto Protocol (which entered into force on February 16, 2005), because the treaty does not indicate the methods by which signatories will implement the Protocol. The Kyoto Protocol also does not address signatory obligations beyond 2012, making it impossible in the context of a reference case projection for EIA to assess the impacts of the Protocol through 2030, the end of the IEO2006 projection period. 

Projections in IEO2006 are displayed according to two basic regions or country groupings: members of the Organization for Economic Cooperation and Development (OECD) and nonmembers (non-OECD) (see Appendix J for complete regional definitions). The regionalization has changed since last year’s report. The OECD region includes three basic subgroups: North America (United States, Canada, and Mexico); OECD Europe; and OECD Asia (Japan, South Korea, and Australia/New Zealand). The non-OECD region is divided into five separate regional subgroups: non-OECD Europe and Eurasia, non-OECD Asia, Africa, Middle East, and Central and South America. Russia is included in non-OECD Europe and Eurasia; China and India are included in non-OECD Asia; and Brazil is included in Central and South America. 

The report begins with a review of world trends in energy demand and the major macroeconomic assumptions used in deriving the IEO2006 projections. The time frame for historical data begins with 1980 and extends to 2003, providing a 23-year historical view of energy demand. The projections extend to 2030. High economic growth and low economic growth cases were developed to depict a set of alternative growth paths for the energy forecast. The two cases consider higher and lower growth paths for regional gross domestic product (GDP) than assumed in the reference case. The resulting projections—and the uncertainty associated with international energy projections in general—are discussed in Chapter 1, “World Energy and Economic Outlook.” 

Worldwide and regional projections of end-use energy consumption in the residential, commercial, industrial, and transportation sectors are presented in Chapter 2. Projections for energy consumption by fuel—petroleum, natural gas, and coal—are presented in Chapters 3, 4, and 5, along with reviews of the current status of each fuel on a worldwide basis. Chapter 6 discusses the projections for world electricity markets—including nuclear power, hydropower, and other commercial renewable energy resources—and presents forecasts of world installed generating capacity. Finally, Chapter 7 discusses the outlook for global carbon dioxide emissions. With the entry into force of the Kyoto Protocol on February 16, 2005, this year’s outlook includes a Kyoto Protocol scenario, which is also presented in Chapter 7. 

Appendix A contains summary tables of the IEO2006 reference case projections for world energy consumption, GDP, energy consumption by fuel, carbon dioxide emissions, and regional population growth. The reference case projections of total foreign energy consumption and consumption of oil, natural gas, coal, and renewable energy were prepared using EIA’s System for the Analysis of Global Energy Markets (SAGE), as were projections of net electricity consumption, energy consumed by fuel and region and by end-use sector, and carbon dioxide emissions. In addition, the NEMS Coal Export Submodule was used to derive flows in international coal trade, presented in Chapter 5. 

Summary tables of projections for the high and low economic growth cases are provided in Appendixes B and C, respectively. Appendix D contains reference case projections of delivered energy consumption by end-use sector and region. Appendix E contains summary tables of projections for world oil production capacity and oil production in the reference case and the high and low world oil price cases. The projections in Appendix E were derived from the International Energy Module of NEMS. Appendix F contains summary tables of reference case projections for installed electric power capacity by fuel, as well as regional electricity generation by fuel. Appendix G provides a summary of assumptions underlying the IEO2006 Kyoto Protocol case. Appendix H includes a set of comparisons of alternative forecasts with the IEO2006 projections, as well as comparisons of historical IEO forecasts with actual historical data. Comparisons of the IEO2006 and IEO2005 forecasts are also presented in Appendix H. Appendix I describes the SAGE model, and Appendix J defines the regional designations included in the report.