[GGP] Energy Over the Next 20 Years: It’s Not All About the US
Thanks to the “shale revolution,” the US is well on its way to becoming the world’s top oil and gas producer and a major exporter of both products. As such, the country does and will continue to influence global energy markets by providing greater predictability and security of supply. Due to increased use of natural gas and renewables, the US has also been a leader in reducing CO2 emissions in its electricity sector. However, as important as these accomplishments are, the US will only play second fiddle to the developing world, especially Asia, which will shape energy demand for the foreseeable future.
This brief explores the challenges current energy demand trends pose for policymakers around the globe in trying to meet two—often contradictory—goals: 1) raising the economic prospects for billions in the less economically developed world, which implies an increase in demand for energy (the most affordable and accessible of which today comes from fossil fuels); and 2) decreasing the use of fossil fuels as part of a global climate change effort.
We examine the trends in energy demand patterns that have been highlighted by three 2018 energy outlooks prepared by the US Energy Information Administration (EIA), the International Energy Agency (IEA), and BP. Despite differences in assumptions,1 all outlooks see the developing world and its policies, economies, and energy consumption patterns as the leading driver affecting future global energy use. The outlooks also agree that fossil fuels—coal, oil, and natural gas—will play a significant role in driving economic growth in the developing world through 2040.
We focus on general trends in fossil energy demand that can be derived from the “business as usual” scenarios in each outlook. As such, our analysis seeks to offer insights and uses these scenarios as a benchmark for assessments of any other scenario under consideration.
Anna Mikulska, Ph.D., Nonresident Fellow in Energy Studies
Michael D. Maher, Ph.D., Senior Program Advisor, Center for Energy Studies
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