global economics and energy

It is evident over time that the amount and type of energy used around the world are closely linked to economic progress. A realistic assessment of future energy use therefore requires recognizing that a growing global population will continue to advance economically and seek better living standards.

Global economic output, as measured by Gross Domestic Product (GDP), rose on average nearly 3 percent per year from 1980 to 2005. Worldwide GDP is expected to increase by approximately the same rate to 2030, led by rapidly expanding economies of developing countries.

While the global economy grew since 1980, the world also became more energy efficient. This gain in efficiency is illustrated by a significant decline in “energy intensity” — a measure that reflects global energy demand divided by global GDP. For perspective, in 1980, it took over 2.5 barrels of oil equivalent (BOE) energy to generate $1000 of economic output. Over the past 25 years, gains in efficiency helped lower energy intensity by about 1.0 percent per year. From 2005 to 2030, the rate of improvement is likely to increase to about 1.6 percent per year on average reflecting advances in development and deployment of new technologies. As a result, energy intensity in 2030 will be almost 50 percent below the level of 1980.

Global energy demand from all sources — expressed in million barrels per day of oil equivalent (MBDOE) — is expected to increase 1.3 percent per year on average from 2005 to 2030. This rate is considerably slower than the growth experienced from 1980-2005, reflecting strong improvements in energy efficiency. Still, global demand in 2030 is likely to reach nearly 325 MBDOE.