World energy consumption is projected to increase by 58 percent from 2001 to 2025 in the International Energy Outlook 2003 (IEO2003) reference case. As in past editions, the IEO2003 continues to show robust growth in energy consumption among the developing nations, especially Asia, where energy demand is expected to more than double over the forecast period.

Expectations for growth in Central and South America have been lowered substantially since last year in light of political and economic problems in the region that have led to lower mid-term projections for development and energy demand.

The IEO2003 reference case expects world oil prices to remain high and volatile throughout 2003; subsequently, prices are expected to return to the mid-term price trajectory anticipated in last year's outlook. World oil prices are projected to reach $27 per barrel in 2001 dollars ($48 per barrel in nominal dollars) at the end of the projection period.

Outlook for World Energy Demand
World oil consumption is projected to grow 1.8 percent annually over the projection period, from 77 million barrels per day in 2001 to 119 million barrels per day in 2025. OPEC producers are expected to be the major beneficiaries of increased demand, but increased supply is also expected from non-OPEC producers, especially from offshore resources in the Caspian Basin, Latin America, and deepwater West Africa.

World Share of Energy Consumption by Energy Source, 1970-2025

Source: Energy Information Administration.

Oil is expected to remain the world's foremost source of primary energy through 2025, its share of world energy dropping slightly, from 39 percent in 2001 to 38 percent in 2025.

The fastest growing source of primary energy is projected to be natural gas; consumption of natural gas is projected to surpass coal use (on a Btu basis) by 2005 and nearly double over the forecast period.

Much of the growth is in response to demand for natural gas to fuel new gas turbine power plants because of its environmental and economic advantages, as well as the expectation that the relatively immature gas markets of emerging countries will develop quickly in the coming years.

World coal use will account for a shrinking share of world energy consumption even though coal use is expected to grow 1.5 percent per year through 2025.

The IEO2003 projects a drop in the nuclear share of electricity, from 19 percent of the world's total electricity supply in 2001 to 12 percent by 2025 as older plants are retired. Some future capacity additions are expected in China, India, Japan, and South Korea. Consumption of hydroelectricity and other renewable resources is projected to increase only moderately, at an average annual rate of 1.9 percent per year between 2001 and 2025. Renewable energy sources are not expected to be competitive with fossil fuels in the mid-term.

Carbon Dioxide Emissions
World carbon dioxide emissions are projected to rise from 6.5 billion metric tons carbon equivalent in 2001 to 10.4 billion metric tons in 2025. Much of this increase is expected in the developing world, accompanying the large increases in fossil fuel use projected for the region's emerging economies.

Energy Intensity
In the IEO2003 forecast, energy intensity--the ratio of energy consumption to gross domestic product (GDP)--in the industrialized countries is expected to improve (decrease) by 1.3 percent per year between 2001 and 2025. Energy intensity is expected to decline more rapidly in the developing countries, by 1.7 percent per year on average, as a result of improving standards of living that accompany economic expansion. In Eastern Europe and the Former Soviet Union (EE/FSU), energy intensity is expected to improve by 2.1 percent per year on average, but will still be five times as high as in the industrialized world.

Carbon Intensity
World carbon intensity is projected to decline from 202 metric tons per million 1997 dollars of GDP in 2001 to 154 metric tons per million 1997 dollars of GDP in 2025. The most rapid rates of improvement are projected for the EE/FSU, through the replacement of inefficient equipment and the use of natural gas for new electricity generation capacity instead of oil or coal, and in China and India along with rapid economic growth.

International Energy Outlook 2003, DOE/EIA-0484(2003); 261 pages, 86 tables, 87 figures.

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File last modified: May 30, 2003