TORONTO: This is the reporting season at the Energy Information Agency (EIA) in Washington. Adam Sieminski and his team with Linda Doman and colleagues taking the lead are attempting to unravel the future energy world.

Endeavouring to look through their crystal ball, the EIA released its International Energy Outlook (IEO) 2016 – though did concede: “the projections in IEO2016 are not statements of what will happen, but what might happen given the specific assumptions and methodologies used for any particular scenario.”

The fossil fuel era is not over – yet.

The IEO2016 is pointing to rising levels of energy demand over the next three decades. Rapid economic growth in China, Indonesia, India, Brazil and other emerging Asian countries will drive global energy consumption, by 48 per cent between 2012 and 2040. As per the projections, the total global energy consumption is set to rise from 549 quadrillions Btu in 2012 to 815 quadrillion Btu in 2040. The unveiled document continues to assert that most of this growth will occur in countries outside of the Organisation for Economic Cooperation and Develop­ment (OCED), particularly in Asia. While US markets and policy will continue to be critical benchmarks for global energy, the United States will not be among the fastest-growing energy markets going forward, the EIA conceded.

In fact, by 2040, nearly two-thirds of all of the world’s energy use will be in developing countries outside the 34-member OECD. Among non-OECD members, Asian countries such as China, India, and Indonesia will account for 55pc of all new energy use through 2040, the analysis insisted. The growing Asian economies would account for more than half of the world’s total increase in energy consumption over the 2012 to 2040 projection period.

And fossil fuel would continue to dominate, still accounting for 78pc of global energy use in 2040, even as the growth in non-fossil fuels is to exceed that of oil, coal and gas. Consumption of oil and other forms of liquid petroleum will fall – but rather modestly over the next 24 years – from 33pc of total marketed energy consumption in 2012 to 30pc of the portfolio in 2040. With oil prices rising in the long term, many energy users would adopt more energy-efficient technologies and switch away from liquid fuels when feasible, the IEO2016 asserted.

And despite all the discussions about battery driven cars overtaking the transportation sector, the IEO2016 asserts that oil will also continue to be a primary fuel for the transport sector, as well as a key fuel for industrial uses in emerging countries. “Even in the aftermath of Paris, I think that our numbers suggest that growth and need for petroleum in transportation and industry is still going to be pretty strong,” Sieminski said while rolling out the data at the Centre for Strategic and International Studies. “Those numbers could come down over time, but it’s still really hard to compete with the energy density that’s in oil.”

And a week later, after unveiling the IEO2016, the EIA also released a preliminary report of its under compilation Annual Energy Outlook – on the U.S. domestic energy sector. The AEO asserts that the US crude production will not rise above the 2015 levels in the next decade despite a projected significant rebound in oil prices. The agency is set to release its full set of annual projections on 7 July.

The AEO says the US crude output is expected to decline to 8.84 million barrels per day this year and 8.55m bpd in 2017, rebound to 9.38m bpd in 2020 and then increase slowly to 9.43m bpd in 2025. The overall crude output growth rate is projected to increase after 2025, lifting the estimated production to 11.26m bpd in 2040. US oil demand in the meantime is projected to increase by an average of 0.7pc between 2016 and 2020, touching 20.11m bpd in 2020 from 19.42m bpd in 2015.

As far as the pricings are concerned, the outlook projects the West Texas Intermediate (WTI) at $36.91 per barrel this year and $48.08 per barrel in 2017, with the subsequent increase to $71.12 per barrel in 2020 and $85.41 per barrel in 2025, all in 2015 dollars. That compares with $48.67 per barrel in 2015. Brent is to average $36.84 per barrel this year and $48.08 per barrel next year, increasing to $77 per barrel in 2020. After 2020, the prices would continue to rise, the report indicated.

Global energy trends are beginning to take shape, providing some food for thought to the planners in Islamabad!

Published in Dawn, May 22nd, 2016