Preface

The International Energy Outlook 2011 (IEO2011) presents an assessment by the U.S. Energy Information Administration (EIA) of the outlook for international energy markets through 2035. U.S. projections appearing in IEO2011 are consistent with those published in EIA's Annual Energy Outlook 2011 (AEO2011) in April 2011. IEO2011 is provided as a service to energy managers and analysts, both in government and in the private sector. The projections are published pursuant to the Department of Energy Organization Act of 1977 (Public Law 95-91), Section 205(c).

The IEO2011 consumption projections are divided according to Organization for Economic Cooperation and Development members (OECD)¹ and non-members (non-OECD). OECD members are divided into three basic country groupings: OECD Americas (United States, Canada, and Mexico/Chile), OECD Europe, and OECD Asia (Japan, South Korea, and Australia/New Zealand). Non-OECD countries are divided into five separate regional subgroups: non-OECD Europe and Eurasia (which includes Russia); non-OECD Asia (which includes China and India); Middle East; Africa; and Central and South America (which includes Brazil). In some instances, the IEO2011 production models have different regional aggregations to reflect important production sources (for example, Middle East OPEC is a key region in the projections for liquids production). Complete regional definitions are listed in Appendix M.

IEO2011 focuses exclusively on marketed energy. Non-marketed energy sources, which continue to play an important role in some developing countries, are not included in the estimates. The IEO2011 projections are based on U.S. and foreign government laws in effect as of the start of 2011. The potential impacts of pending or proposed legislation, regulations, and standards are not reflected in the projections, nor are the impacts of legislation for which the implementing mechanisms have not yet been announced.

The report begins with a review of world trends in energy demand and the major macroeconomic assumptions used in deriving the IEO2011 projections, along with the major sources of uncertainty in the projections. The projections extend through 2035. The demand projections and macroeconomic outlook are discussed in Chapter 1, "World Energy Demand and Economic Outlook."

In addition to Reference case projections, IEO2011 includes several scenario cases that are used to estimate the impacts of oil prices and demand on global liquid fuel markets. The impact of alternative supply conditions on the projections is illustrated by the Traditional High and Traditional Low Oil Price cases. In addition, the impact of high and low non-OECD demand (where most of the uncertainty with respect to future energy markets lies) on world liquids markets is captured in the High Price and Low Price cases. All four cases are discussed in Chapter 2, "Liquid Fuels." The discussion in Chapter 2 includes regional projections of liquids consumption and production (primarily petroleum).

Chapters 3 and 4 review regional projections for natural gas and coal energy consumption and production, along with reviews of the current status of each fuel on a worldwide basis. Chapter 5 discusses the projections for world electricity markets—including nuclear power, hydropower, and other commercial renewable energy resources—and presents projections of world installed generating capacity. Chapter 6 provides a discussion of industrial sector energy use. Chapter 7 includes a detailed look at the world's transportation energy use. Finally, Chapter 8 discusses the outlook for global energy-related carbon dioxide emissions.

Objectives of the IEO2011 projections

The projections in IEO2011 are not statements of what will happen, but what might happen given the specific assumptions and methodologies used for any particular scenario. The Reference case projection is a business-as-usual trend estimate, given known technology and technological and demographic trends. EIA explores the impacts of alternative assumptions in other scenarios with different macroeconomic growth rates and world oil prices. The IEO2011 cases generally assume that current laws and regulations are maintained throughout the projections. Thus, the projections provide policy-neutral baselines that can be used to analyze international energy markets.

While energy markets are complex, energy models are simplified representations of energy production and consumption, regulations, and producer and consumer behavior. Projections are highly dependent on the data, methodologies, model structures, and assumptions used in their development. Behavioral characteristics are indicative of real-world tendencies, rather than representations of specific outcomes.

Energy market projections are subject to much uncertainty. Many of the events that shape energy markets are random and cannot be anticipated. In addition, future developments in technologies, demographics, and resources cannot be foreseen with certainty. Key uncertainties in the IEO2011 projections are addressed through alternative cases.

EIA has endeavored to make these projections as objective, reliable, and useful as possible. They should, however, serve as an adjunct to, not a substitute for, a complete and focused analysis of public policy initiatives.