Contributed by Robert Lyman @ July 2016

For those who believe the theory that humans are causing catastrophic global warming, a central tenet is that the world is quickly moving away from the use of fossil fuels (oil, natural gas, and coal) and, within a few decades, will be completely converted to non-nuclear renewable energy sources. Global energy markets indeed are undergoing major transformations, but are they really changing in the way environmentalists claim? To find out, I checked the most recent reports from the two most authoritative sources of data and analysis on world energy supply and demand, the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA).


The trends in energy supply and demand are closely related to the changes occurring in the world economy. Since 2000, the world economy has experienced a period of modest growth, followed by the financial crisis and economic recession starting in 2008, and a period of uncertain recovery during which the member countries of the Organization for Economic Cooperation and Development (OECD) have experienced slow growth rates while several developing countries, notably in Asia, have experienced quite rapid growth rates. Environmentalists’ concerns have increasingly shaped the policies of governments, so that many OECD countries have embarked on programs to replace fossil-fuel-based electricity generation by wind, solar and biomass energy generation and some countries have shut down nuclear power plants in reaction to the tsunami that disabled the Fukushima nuclear plant in Japan.

These developments have coincided with major changes in energy markets. Technological advances made possible the widespread development of new oil and natural gas supplies in non-OPEC areas, especially in the United States; in their efforts to regain market share, OPEC countries over-supplied the petroleum liquids markets and drove prices down to levels that, while welcome for consumers, threatened the viability of new higher-cost production. The general decline in economic activity reduced demand for all energy sources. At the same time, government policies promoted increased energy intensity and used regulations or ratepayer and taxpayer-funded subsidies to increase the use of more expensive renewable energy sources to back out coal-fired power generation.  In 2015, the prices of oil, natural gas and coal all declined significantly.

In December 2015 at the COP21 Conference of the Parties to the Climate Change Convention in Paris, several countries committed to introduce action plans with a goal of limiting the increase in average global temperatures. Subsequently, some governments stated that this entailed virtually eliminating the use of fossil fuels by 2050.

Given these developments, are global energy consumers following the environmentalist script? Let us examine the most recent trends.



World oil demand grew from 89 million barrels per day (mmb/d) in the first quarter of 2011 to 96 mmb/d in the second quarter of 2016. Both EIA and IEA expect 2016 oil demand to grow by 1.4 mmb/d. The IEA foresees a further growth of 1.3 mmb/d in 2017, while EIA foresees a 1.5 mmb/d increase. Most of this growth is taking place in non-OECD countries.

OPEC crude oil production averaged 31.8 mmb/d in 2015, an increase of 0.8 mmb/d over 2014. Another 0.8 mmb/d increase is expected in 2016. The increases are coming from Iraq, Iran and Saudi Arabia.

Non-OPEC production appears likely to fall by 0.9 mmb/d in 2016, before staging a modest recovery in 2017.

Oil supply is not constrained by resource limitations, but by demand and competition from lower-cost OPEC sources of supply.


Natural Gas

World demand for natural gas grew for most of the post-2000 period at the rate of 2.2% per year. Since 2012, growth has slowed to 1.0% per year. The IEA projects total demand to increase at a faster rate of 1.5% per year to 2021, and to reach 3.9 trillion cubic metres per year then.

Within the United States, gas prices are unlikely to fall much further from the very low level of 2015. This largely exhausts the potential for economically motivated switching from coal to gas for electricity generation. Thus, increases in gas-fired generation from 2015 levels will probably be limited to the need to replace some of the coal-fired capacity that retires.

In China, gas demand growth averaged 15% per year between 2009 and 2014, but slowed to 4% in 2015. This is due to lower economic activity. Over the longer term, natural gas demand is expected to grow sharply (in the range if 9% annually) if the Chinese carry though with their announced intentions to reduce coal consumption for air quality reasons.

The IEA projects that gas demand in India will grow at 6% per year into the early 2020’s.

The IEA foresees a period of global gas oversupply extending into the early 2020’s. This is largely due to the expansion of global LNG export capacity, forecast to be 45% between 2015 and 2021, 90% of which will originate from the United States and Australia. A substantial amount of capital has already been allocated for these projects; the investment decisions have been made.



Coal remains the second-largest energy source used worldwide – behind only petroleum liquids – and, according to the EIA, this will remain the case until at least 2030.

The EIA projects world coal consumption to increase from 2012 to 2040 at an average rate of 0.6% per year, from 153 quadrillion BTU in 2012 to 169 quadrillion BTU in2020 and 180 quadrillion BTU in 2040. Ninety per cent or more of this increase will occur in the non-OECD countries.

Over the period to 2040, EIA projects that China, the United States and India will represent 70% of world coal use. India’s coal use will surpass that of the United States somewhere around 2030.

This does not take account of the possible effects of the Obama Administration’s proposed “Clean Power Plan”, which would significantly reduce coal-fired electricity generation. Early in 2016, the U.S. Supreme Court issued a “stay” on the enforcement of the Clean Power Plan regulations until the courts have dealt with the many lawsuits against them. Even if this plan were to proceed, however, it would only reduce U.S. coal consumption by 3 quadrillion BTU in 2040, so that global coal-related energy use would only rise to 177 quadrillion BTU instead of 180 quadrillion BTU.



According to the most authoritative energy forecasting organizations in the world, the demand for oil, natural gas and coal will continue to increase beyond the end of their projection periods. These projections are based upon realistic assessments of the likely changes in the global energy marketplace as a result of current government policies, including those intended to reduce greenhouse gas emissions through subsidies, mandates and regulations.

There is a profound difference between the future as projected by these experts and those prescribed by advocates of dramatic and costly actions to reduce GHG emissions. The latter demand a virtual 100% reduction in fossil fuel use by 2050; the former foresee continuing increases in emissions driven largely by the aspirations of people in the developing countries for a higher standard of living and greater energy security. Whom do you believe?



U.S. Energy Information Administration, Short-Term Energy Outlook, July 12, 2016.

International Energy Agency, Oil Market Report, July 13, 2016.

International Energy Agency, Medium-Term Gas Market Report, 2016.

U.S. Energy Information Administration, International Energy Outlook, 2016, Chapter 4. Coal, May 11, 2016.


  1. renewableguy

    No doubt the carbon dioxide emissions have been going up during the whole industrial revolution from all the various sources humans have been active in. But a new situation is taking place in the United States in which power utilities are no longer the largest polluting source, but the transportation system now is. Utilities are turning the emissions curve down.

    Power plants are no longer America’s biggest climate problem. Transportation is.

    Here’s an important energy milestone: For the first time since 1979, America’s cars, trucks, and airplanes emit more carbon dioxide than its power plants do. The chart below comes from Sam Ori, executive director of the Energy Policy Institute at the University of Chicago:

    • Robert Lyman

      renewable guy, As usual your comments ignore the facts in the blog post on which you claim to comment. It matters not at all which sector is the highest source of greenhouse gas emissions, whether in the United States or in other countries. What matters is that, globally, the consumption of fossil fuels continues to rise inexorably because that is what people are freely choosing to do. Nothing that governments in Canada or the United States or Europe do to regulate, tax and otherwise try to control consumers will make any difference to that fact. There is a complete disconnect between the “problem” of alleged human-induced catastrophic global warming and your proposed solution of forcing people to use less hydrocarbons here.

      • renewableguy

        It is cheaper for now to continue using fossil fuels. I agree. That is the main driver of why the continued expansion of fossil fuel use.

        Just the same, there is 1/2 watt per meter squared less energy leaving the earth’s atmosphere and than is arriving from the sun. That is simply due to human ghg’s. Electric car market is due to explode soon with electric utilities decreasing their carbon footprint.

        We are in transition now. The 196 countries signed the Paris Climate Accord to agree to reduce ghg emissions. Some people may not like this, and that is to be expected. But the majority of the world is going to change.

  2. Robert Lyman

    The August, 2016 Energy Information Administration version of its Short Term Energy Outlook confirmed the oil market projections made in the July 2016 version. It included a graph showing the trends in world liquid fuels consumption over the period 2007 to the present and beyond to the end of 2017. Interestingly, consumption only declined (from 87 to 85 million barrels per day) during the 2007 to 2009 period immediately following the world financial crisis. Since 2009, consumption has risen to 95 million barrels per day and is projected to rise to over 97 million barrels per day on average in 2017, the end of the short term projection period. Consumption growth is occurring almost entirely in non-OECD countries. Globally, there is no evidence of any reduction in oil-related emissions that would demonstrate any move to align with the COP21 emission reduction objectives. See the EIA report here:

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