Energy News Monitoring

The U.S. Energy Information Administration (EIA) released International Energy Outlook 2018 (IEO-2018), which examines the impact of different macroeconomic factors on the energy markets in non-OECD regions, in particular in three heavily populated parts of the world: China, India and Africa. The rapid economic development of these regions has significant implications on the global market, not least on the USA as one of the major players in the energy export industry.

According to the IEO-2018, in the next 2 decades global energy demand is going to increase for all fuels except coal, which is forecast to stay relatively equal, falling  or rising only slightly each year. By 2040 global energy consumption is projected to reach 739 quadrillion Btu, with non-OECD countries accounting for 65% and the largest increase in energy use being projected for Asia.
China has the greatest impact on the global energy market. According to the report, China’s GDP is predicted to increase 5.7% a year, with the US rising from $54 trillion to $73 trillion PPP by 2040, which is twice the GDP of the USA. This will definitely increase energy consumption too; however, “the magnitude and rate depends on how quickly China transitions to a more service-oriented, personal consumption-based economy”, says the report. By 2040, the country will remain the world's leader in producing energy-intensive goods.

India, the 4th biggest energy consumer, is projected to become the most populated country by 2040 and to take third position in energy use, overtaking Russia. Despite the fact that India has one of the fastest growing economies and its GDP is predicted to grow about 7.1% a year and exceed that of the United States by 2040, the country’s energy consumption is going to remain lower than in the USA or China in the next two decades. This is mostly due to the fact that India’s economy is primarily service-oriented and not goods-oriented as in China.

Africa, the 8th largest regional energy consumer (23 quadrillion Btu) has great potential for fast economic growth that will lead to the progressive development of the manufacturing sector and an increase in its industrial energy use. African GDP is assumed to increase from US $14 trillion to $18 trillion PPP by 2040, which is somewhat more than one-third of China’s GDP. Even so, energy consumption in Africa will not reach the level of other major economies in 2040.
China, India, and Africa together accounted for 32% of global energy consumption in 2015. IEO-2018 has predicted these regions will account for 36% of global energy use in 2040.