Global demand pumps up energy consumption

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Guest Commentary Global demand pumps up energy consumption

M. Ray Perryman World energy consumption is predicted to increase by almost 60 percent over the next couple of decades, with much of this growth occurring not in the industrialized countries, but in the developing nations.

Among the factors influencing this forecast are the economic recovery being experienced in Southeast Asia and the economic growth in portions of the former Soviet Union.

Energy demand also is anticipated to be particularly high over the next 20 years in emerging markets throughout Asia and Central and South America.

Oil provides a larger share of world energy consumption than any other energy source. Over the past few years, even with the volatility in prices, oil has remained steady with a market share of about 40 percent.

This percentage is not projected to significantly change over the next two decades. Naturally, the industrialized nations consume a greater proportion of petroleum products than the developing countries, but the gap appears to be narrowing.

In industrialized nations, most of the increase in the use of oil is expected to be in the transportation sector, primarily because alternatives are not yet economically feasible.

In the developing nations, however, oil demand is forecast to increase in practically all sectors. Of particular note is the fact that many of these emerging economies are expected to shift from non-commercial fuels, such as wood for heating and cooking, to diesel generators.

While oil use is not anticipated to see much overall percentage change in total energy use worldwide, natural gas, the fastest growing component of primary world energy consumption, will likely experience an increase of about 5 percent in market share by 2020.

Part of the reason is the growing demand for and use of natural gas in electricity generation. Natural gas is extremely efficient in helping produce electricity, and it is environmentally friendly as it emits less sulfur dioxide, carbon dioxide, and particle matter as compared to oil or coal.

Because of these factors, natural gas is attractive and is expected to be the top choice for new power generation as well as fuel for industries around the world.

In developing countries, the use of natural gas is predicted to grow at a faster pace than any other fuel category. The opening of electricity markets to competition around the United States and elsewhere is stimulating billions of dollars in investments in combined-cycle gas turbines.

Coal as a percentage of global energy use will probably drop slightly over the next couple of decades. However, the predicted increase for coal consumption in China and India, both of which have substantial fossil fuel resources, will keep the percentage of coal as a worldwide energy source hovering around 20 percent.

These two Asian countries are expected to account for about 30 percent of the aggregate increase in energy consumption among all nations over the next two decades.

Approximately 60 percent of coal consumption worldwide is for the generation of electricity. Almost all of the projected increase in the world's consumption of coal is expected to be for this purpose.

"Clean coal" technologies seem to offer notable prospects for the future, but are not yet economically practical or politically acceptable.

The future role that nuclear power will play in providing worldwide electricity is unknown. But at present, emerging economies are expected to account for much of the growth in this industry.

Most of the reactors in the industrialized world are expected to be retired during the next two decades, and very few countries are making plans to replace them.

Smaller reactors, new technology and high costs of alternate fuels may ultimately give nuclear energy another heyday.

Over this same period of time, renewable energy use will probably increase by about 53 percent.

Much of this growth will be the result of large-scale hydroelectric projects in various non-industrial nations, notably in China, India, Nepal and Malaysia.

Wind power continues to expand, but is unlikely to be a major factor on a global basis. Even so, on a worldwide scale, renewable energy will drop about 1 percent from its current 9 percent share of total global energy consumption.

Projections call for the use of electricity around the world to see a two-thirds increase by 2020. As expected, growth rates are most likely to be the greatest in developing nations.

In the industrialized world, because of slower population expansion and economic growth, electricity consumption will probably grow at a more modest rate.

Efficiency in electrical appliances and market saturation of various products (such as kitchen appliances) are also contributing factors.

This rate could change, of course, if there is a significant increase in computer usage or if enough new electronic devices are introduced and become "necessities" for those living in the industrialized nations.

Whatever happens on that front, however, no slowdown in energy demand is on the horizon.

Dr. M. Ray Perryman is president of The Perryman Group (www.perrymangroup.com).

http://houston.bcentral.com/houston/stories/2001/05/21/editorial3.html

-- Martin Thompson (mthom1927@aol.com), May 21, 2001


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