Appendix I. Comparisons With International Energy Agency and IEO2007 Projections 

Comparisons with IEA’s World Energy Outlook 2007 

The International Energy Agency (IEA) in its World Energy Outlook 2007 provides projections comparable with those in IEO2008. Because IEA releases projections only for the years 2015 and 2030, two time periods are compared here—2005 to 2015 and 2015 to 2030. 

In the 2005 to 2015 projection period, the IEA reference scenario reflects growth that more closely resembles the IEO2008 high economic growth case than its reference case. Both the IEA reference scenario and the IEO2008 high economic growth case project increases in world energy consumption that average 2.3 percent per year, compared with 2.0 percent in the IEO2008 reference case (Table I1). There are large differences between the IEA reference scenario and the IEO2008 reference case projections for both the OECD and non-OECD countries. 

Within the OECD country group, the IEA projections of growth in energy demand for the United States surpass the upper bound of the range defined by the IEO2008 low and high economic growth cases for the United States (in part because the IEA reference scenario does not incorporate provisions of the U.S. Energy Independence and Security Act of 2007 [EISA2007], which was enacted after the IEA projections were released) and for Japan. Differences in the near-term outlook for both countries also reflect different projections for world oil prices, which in 2010 are about 25 percent higher in the IEO2008 reference case than in the IEA reference scenario. 

Both outlooks project much faster growth in energy demand among the non-OECD nations than in the OECD, and both have similar projections for growth in non-OECD Europe and Eurasia. IEO2008 projects 1.6-percent average annual growth in energy use from 2005 to 2015, and IEA projects 1.7-percent annual growth. For China and the Middle East, IEA projects much faster growth than IEO2008 from 2005 to 2015. In each case, IEA’s projected growth rates are higher than those in the IEO2008 high economic growth case. On the other hand, IEA’s projected 2.9-percent average annual growth rate for energy consumption in “other non-OECD Asia” (excluding China and India) over the same period is lower than the projection of 3.3 percent per year in the IEO2008 reference case and, in fact, falls below the projected growth rate in the IEO2008 low economic growth case. Similarly, IEA projects a modest 1.8-percent annual increase in Africa’s energy use from 2005 to 2015, compared with 2.7 percent per year in the IEO2008 reference case. 

In the later years of the projections, IEO2008 and IEA generally agree, with worldwide energy demand growing by 1.4 percent per year between 2015 and 2030 in both outlooks (Table I2). Both outlooks anticipate similar regional growth over the 2015 to 2030 period. The largest regional differences between the two projections are for China, India, and the Middle East. IEA anticipates that China’s energy demand growth will slow to 2.0 percent per year for the final 15 years of the outlook, whereas the IEO2008 reference case shows China maintaining a 2.7-percent annual growth rate in energy demand through the end of the projection period. The IEA growth projection for energy use in China from 2015 to 2030 is lower than projected in the IEO2008 low economic growth case. For India, the IEA reference scenario projects 3.7-percent annual growth in energy use from 2005 to 2015 and 3.5-percent growth from 2015 to 2030, whereas IEO2008 shows the growth rate slowing to 2.4 percent per year from 2015 to 2030. 

IEA’s optimism regarding demand growth in the Middle East continues to the end of the projection period, with energy use in the region increasing by an average of 2.3 percent per year from 2015 to 2030. IEO2008, however, projects average increases of just 1.5 percent per year over the same period in the reference case. The IEA growth rate for the period is higher than projected in the IEO2008 high economic growth case. 

The projections vary not only with respect to levels of total world energy demand but also with respect to the mix of primary energy inputs. In the 2005 to 2015 period, IEA expects faster growth in fossil fuel use and slower growth in the use of non-fossil fuels than does IEO2008 (Table I3). For nuclear power consumption, the growth rate projected by IEA is below the projection in the IEO2008 low economic growth case, largely as a result of different assumptions about nuclear power in China. In the IEO2008 reference case, China’s nuclear capacity additions from 2005 to 2015 are nearly double the IEA projection (15 gigawatts and 8 gigawatts net new capacity, respectively). 

The IEA projection for worldwide growth in coal consumption from 2005 to 2015 is bullish in comparison with the IEO2008 projection, especially for China and India. IEA projects average annual growth of 5.5 percent in China’s coal demand from 2005 to 2015, compared with 4.4 percent per year in the IEO2008 reference case. Similarly, India’s coal use grows by 4.7 percent per year in the IEA reference scenario from 2005 to 2015, compared with 2.9 percent per year in the IEO2008 reference case. 

For the period from 2015 to 2030, IEO2008 and IEA are largely in agreement. The only exception is nuclear power, for which the IEA growth projection falls significantly below that in the IEO2008 low economic growth case (Table I4). In the IEA projection, the average annual growth rate for world nuclear electricity consumption slows from 1.1 percent in the 2005 to 2015 period to 0.4 percent in the 2015 to 2030 period. IEO2008 projects average increases of 1.4 percent per year from 2005 to 2015 and 1.5 percent per year from 2015 to 2030. 

Comparisons With IEO2007 

The IEO2008 outlook for total energy consumption in 2015 is largely the same as the outlook in IEO2007. In IEO2008, total marketed energy consumption in 2015 is projected to be 563 quadrillion Btu, as compared with 559 quadrillion Btu in IEO2007 (Table I5). There are, however, some regional differences between the two IEOs. In IEO2008, total energy consumption for the OECD countries in 2015 is about 5 quadrillion Btu lower than was projected in IEO2007. Most (3 quadrillion Btu) of the difference is attributed to lower demand in the United States. The explanation for the lower U.S. consumption is twofold—the projection for average annual GDP growth from 2005 to 2015 is 0.3 percentage points lower in IEO2008 than was projected in IEO2007, and the IEO2008 reference case reflects the impact of EISA2007, especially with respect to efficiency gains in the building sector. 

For the non-OECD countries, the largest differences between the projections for 2015 in IEO2008 and IEO2007 involve China. In IEO2008, China’s projected total energy use in 2015 is 7 quadrillion Btu higher than projected in IEO2007. IEO2008 assumes more rapid economic growth for China between 2005 and 2015 than was assumed in IEO2007—8.4 percent per year versus 7.8 percent per year—because China’s economic growth has continued to grow more strongly than anticipated in the IEO2007 projection. Whereas IEO2007 expected GDP growth to average 10.5 percent in 2006 and then fall gradually through 2010, revisions to the short-term projections in IEO2008 include increases in China’s GDP to 11.1 percent in 2006 and 11.5 percent in 2007, before it begins to slow from 2008 through 2010. 

The near-term differences between the IEO2008 and IEO2007 projections are carried through to 2030. The IEO2008 reference case projection for total energy use worldwide in 2030 is 7 quadrillion Btu (about 1 percent) lower than the IEO2007 projection. Again, the largest regional differences between the 2030 projections are for the United States and China. In the IEO2008 reference case, U.S. GDP is projected to increase at an average rate of 2.4 percent per year from 2015 to 2030, 0.5 percentage points lower than the GDP growth rate projected for the United States in IEO2007. In addition, the impacts of the EISA2007 legislation are fully realized in the 2030 projection, including increases in the corporate average fuel efficiency standards for U.S. motor vehicles that reduce demand for liquids in the long-term projection. The reference case projection for U.S. total energy use in 2030 is 13 quadrillion Btu (10 percent) lower in IEO2008 than was projected in IEO2007. For China, total projected energy consumption in 2030 is 10 quadrillion Btu higher in IEO2008 than it was in IEO2007, largely because the large short-term increments in energy use carry over into the long-term projection. 

Along with regional differences between the IEO2008 and IEO2007 projections, there are some differences between the two projections in the mix of energy resources expected to be consumed (Table I6). The IEO2008 projections for worldwide consumption of liquid fuels and other petroleum are 3 quadrillion Btu lower in 2015 and 10 quadrillion Btu lower in 2030 than in IEO2007. The difference can be explained by the higher world oil prices in IEO2008 and also by the large downward revision in U.S. liquids demand. In 2030, U.S. liquids consumption is 16 percent lower in IEO2008 than it was in IEO2007 because of the combination of slower projected economic growth, higher world oil prices, and the impacts of EISA2007. 

There are also differences between the IEO2008 and IEO2007 projections for consumption of the other fossil fuels: coal consumption is higher in IEO2008 and natural gas consumption lower. The increase in coal use is attributable largely to higher projected demand in China, based on the strong increase in its consumption during the historical base year (2005). China’s coal consumption increased by 13 percent from 2004 to 2005, and as a result, even though its coal use is projected to grow at approximately the same rate as in last year’s outlook, coal consumption in China in 2030 is about 9 percent (8 quadrillion Btu) higher than in the IEO2007 projection. For natural gas demand, nearly two-thirds of the decrease in IEO2008 from IEO2007 can be attributed to lower demand in the United States. Higher natural gas prices and the absence of legislation that would limit the expansion of coal-fired generation mean that coal is more competitive economically for electricity generation in the United States, so that coal displaces natural gas use in the later years of the IEO2008 projection. 

The projections for nuclear power in IEO2008 are largely unchanged on a Btu basis from those in IEO2007. In 2030, total net nuclear power generation worldwide on a kilowatthour basis is actually 4 percent higher in IEO2008 than in IEO2007, but the difference is masked by a revision in the conversion factors used to convert kilowatthours to Btu. For renewables, the IEO2008 demand projection for 2030 is more than 10 percent higher than the IEO2007 projection. The increase is a result of higher fossil fuel prices and additional government policies aimed at expanding renewable energy use.