The U.S. Energy Information Administration (US EIA) released the latest edition of its International Energy Outlook 2017 (IEO2017) that is an assessment of outlooks for international energy markets. The IEO2017 is a compilation of long-term world energy markets, including projections for 16 world regions.
The biggest take away is that world energy use is projected to increase 28% by the year 2040. That is a rise from 2015 global energy consumption at 575,000,000,000,000,000 (quadrillion) British thermal units (Btu) to 736 quadrillion Btu in 2040. Much of the growth is driven largely by increased demands in China, India and other Asian countries.
The increased energy consumption will come from all fuel sources, with the exception of coal demand that remains basically flat. Renewables are expected to be a fast growing source, along with nuclear power, yet the world will rely primarily on fossil fuels as its principal energy source well into the future. Fossil fuels are expected to account for 77% of energy use in 2040, with natural gas rising considerably.
Natural gas is the fastest growing fossil fuel in the IEO2017 outlook. Global natural gas consumption is expected to increase 1.4% per year, due to abundant natural gas sources and rising production. In the United States we are seeing a rebound from where the industry was last year at this time, and U.S. natural gas production was projected to increase to a record 59.7 billion cubic feet per day (bcfd) in October. This is up from September and reflects the upward trend that we have been seeing for the past seven months.
Also not in the forecast of their report is a peak in global oil demand. Petroleum and other liquid fuels will remain the largest energy source throughout the next two decades, based on IEO2017 predictions. To the tune of the world using 95,000,000 barrels per day (b/d) in 2015, to 104 million b/d in 2030 and 113 million b/d in 2040. To satisfy this growing energy demand, the world needs a production increase by 16.1 million b/d from 2015 to 2040.
The United States is contributing to meet these energy needs, seen in the US EIA’s monthly drilling report, Shale production is set to rise for the 10th month in a row in October. The seven big shale plays across the states are forecasted to bring a rise in monthly production by nearly 79,000 b/d, totaling 6.1 million b/d.
On a local level, we’ve seen a modest increase in production in 2017. The latest quarterly results from the state show Ohio producers recovered 4,044,072 barrels of oil and 388 bcf of natural gas, spanning April 1, 2017 through July 31, 2017. The production results are a positive sign for our industry, as 2016 ended with the industry seeing both oil and natural gas production decrease.
The predictions from the IEO2017 are another set of data points in a larger on going discussion of what our world’s energy future needs to, and will look like. I encourage anyone interested in learning more to view the full report.