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U.S. ENERGY INFORMATION ADMINISTRATION EIA Projects Strong Long-Term Growth in Asian Energy Demand Despite Recent Economic Downturn.The Kyoto Protocol Could Alter Expected Growth in Emissions in the Industrialized World, but Worldwide Emission Levels Continue to Rise.
Worldwide energy consumption is expected to grow 75 percent between 1995 and 2020 according to the latest International Energy Outlook 1998 (IEO98), released today by the Energy Information Administration (EIA). Asia enjoys robust long-term growth, in spite of the region's currency crisis which started in mid-1997 and continues into 1998. Indeed, IEO98 expects that the Asian economic recession will not be protracted and the outlook for long-term energy use is virtually the same as projected in last year's report. By 2020, energy use in developing Asia (including China and India, but excluding Japan, Australia, and New Zealand), surpasses that of all North America by more than 36 percent. In contrast, total energy use in developing Asia is presently 33 percent below that of North America. Although the economic downturn in Southeast Asia has lowered expectations for near-term growth in the region, the IEO98 still projects that almost half of the world's future increment in energy demand will be in developing Asia (Figure 1). Strong economic growth in Asia results in improved standards of living which, in turn, will mean increased use of energy for a variety of residential and commercial purposes and for personal transportation. The countries most affected by the crisis include South Korea, Indonesia, Thailand, and Malaysia, which currently account for just under 20 percent of the energy use in developing Asia. In the developing countries, income per capita is expected to more than double between 1995 and 2020. While this increase is impressive, the developing world will still--on a per capita basis-- consume less than one-fifth the energy of the industrialized world. As personal income levels have risen, the demand for personal automobiles has become an important component of consumer demand resulting in higher use of petroleum products for transportation. The potential market for developing Asia is enormous. At the end of 1997, there were an estimated 6.6 motor vehicles per thousand persons in China, as compared with 720 in the United States, 520 in Japan, and 130 in South Korea. In addition to the Asian recession, the potential consequences of the Kyoto Climate Change Protocol represent another development that may have a substantial impact on future world energy use. The Kyoto Protocol could profoundly affect energy growth in the industrialized world. To achieve emissions targets set in the Protocol, industrialized countries may need to scale back energy demand projected for 2010 by as much as 40 to 60 quadrillion Btu equivalent to between 20 and 30 million barrels of oil per day. The expectation is that fuel-switching opportunities, emissions trading, and other offsets would moderate actual patterns of adjustment. However, many countries will need to initiate innovative energy policies to attain the Protocol objectives. In any case, even if the Annex I countries that are parties to the Kyoto Protocol were able to achieve the proposed target reductions, worldwide emissions levels would continue to rise by 32 percent between 1990 and 2010 (Figure 2). Under any conditions, substantial uncertainty accompanies the development of a long-term scenario for world energy supply and demand. However, several occurrences in 1997 make an assessment of energy markets even more difficult than usual. In addition to the potential impact of the Kyoto Protocol and the economic recession in Southeast Asia, developments in the world oil market have been particularly unusual. Recent world oil prices have been especially weak with prices currently running at a ten year low, OPEC has increased oil production quotas for its members, and the United Nations has increased the amount of oil Iraq is allowed to export. Other report highlights include:
Copies of IEO98 are available from the U.S. Government Printing Office or through EIA's National Energy Information Center, Room 1F-048, Forrestal Building, Washington, DC 20585, 202/586-8800. The report is also available on EIA's Web Site at http://www.eia.doe.gov/oiaf/ieo98/ home.html. The World Energy Projection System, the model used to generate the projections that appear in IEO98, will be available in May 1998, on EIA's Internet Web Site: http://www.eia.doe.gov. The figures referenced above may be viewed along with this press release on EIA's Web Site or can be requested from the EIA's Press Contact.
EIA Program Contact: Mary J. Hutzler, 202/586-2222 EIA-98-09 Contact:
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