World energy forecast tips coal, gas exports to increase

World energy forecast tips coal, gas exports to increase

AUSTRALIA’S booming energy export levels are likely to continue for 24 years as world demand for gas, coal, uranium and oil continue to be pushed skyward by China.

In its World Energy Outlook for 2006, the International Energy Agency is predicting energy demand to increase by 53 per cent by 2030, a growth rate of 1.6 per cent a year. Despite concerns about greenhouse emissions, fossil fuels are expected to continue to dominate energy production. By 2030 fossil fuels will actually increase their representation from 80 per cent to 81 per cent of the world energy market.

Surprisingly, given recent concerns about oil shortages, average oil prices are expected to be $US55 a barrel in 2030 in constant dollars, the IEA estimates. Oil imports for OECD countries are expected to rise from 56 per cent to 75 per cent of total consumption.

ABN Amro Morgans oil analyst Michael Knox said the estimate did not surprise him. Canada’s massive tar sands deposits, which hold more oil than remaining Saudi Arabian reserves, were “economically viable at a price above $US55 per barrel”, he said. As a result, the long-term price was likely to be in the $US50-$US60 range.

The coal industry is expected to continue its recent strong growth. The IEA said global coal demand would be 59 per cent higher in 2030. “Australia is expected to extend its lead as the world’s biggest exporter of coking coal and along with Indonesia ”¦ dominate steaming coal trade.” Total coal demand would be 8.8 billion tonnes in 2030 on current projections, the report said.

Gas demand will outstrip coal at an average of 2 per cent a year until 2030. Liquefied natural gas exports will rise from 14.8 per cent of traded gas now to 20.1 per cent in 2030. A spokesman for Woodside Energy said the company expected to spend billions on new developments to help meet the demand.

The report highlighted the extraordinary and growing influence of China in world energy markets. China’s projected growth will account for 30 per cent of the growth in energy demand and is heavily slanted to coal. China and India alone will account for 57 per cent of world coal consumption in 2030, compared with 43 per cent now.

As a result, the agency takes a bleak view of the environmental outlook, with emissions expected to rise by 55 per cent on a business-as-usual basis and 39 per cent if significant energy efficiency measures are taken, especially in land transport, power generation and building and manufacturing. That strategy would bring economic benefits of $2 for every $1 spent, the IEA said.

Renewable energy will increase at 6.6 per cent a year under the business-as-usual model and 8.2 per cent under the greener scenario. But it is expected to make up only between 6.7 per cent and 9.4 per cent of total power generation by 2030.

Biofuels will increase their role, providing 4 per cent of transport fuel demand energy in 2030, compared with 1 per cent now. Environmental and economic factors will limit biofuels growth and one estimate quoted by the IEA says that for a mid-range expansion of the industry, 20 per cent of the world’s farmland would have to be devoted to energy crops.

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