According to the World Energy Outlook 2017, an annual publication from the International Energy Agency, over the next twenty years the global energy system will be reshaped by four major forces:
Solar Photovoltaic will be the largest capacity additions, pushed by developments in China and India. Wind will become the leading source of electricity in the European Union soon after 2030.
“Solar is forging ahead in global power markets as it becomes the cheapest source of electricity generation in many places, including China and India,” said Dr Fatih Birol, the IEA’s executive director in a press release. “Electric vehicles (EVs) are in the fast lane as a result of government support and declining battery costs but it is far too early to write the obituary of oil, as growth for trucks, petrochemicals, shipping and aviation keep pushing demand higher. The US becomes the undisputed leader for oil and gas production for decades, which represents a major upheaval for international market dynamics.”
By 2040 global energy demand is estimated to be 30 percent higher – but without expected efficiency improvements, demand would be double that estimate. Oil demand will continue to rise, but growth trends will slow down. Demand for oil will not decline before 2040 even as electric-car sales rise steeply.
The United States will continue to revolutionize the shale oil and gas marketplace due to remarkably cost effective production and is expected to become the world’s largest LNG exporter and a net oil exporter by the end of the 2020s.
This will have major impacts on global oil and gas markets, triggering a major reorientation of global trade flows causing challenges to the existing major exporters. Asia will take up more than 70 percent of global oil and gas imports by 2040. A major structural shift is happening with a more flexible and globalized gas market as a result of US LNG exports.
Despite the rise in renewables and the shift to natural gas, it is not the end of oil. Global oil demand is predicted to continue to grow to 105 million barrels a day by 2040, up from 94 million barrels per day in 2016.
American GDP could also get a $1.89-trillion boost by 2035, says API study.
Data shows an ‘emerging trend’ and a ‘cause for optimism,’ says IEA boss.
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