BackIndia to be second largest coal consumer by 2025
US will become world?s largest oil producer by 2020, and become a net exporter by 2030, says IEA
Premium(IEA projects that oil production from Iraq will reach around 6 mb/d by 2020 and 8 mb/d by 2035, making it a key supplier to Asia and earning around $5 trillion in revenue from oil exports by then.)
India, China and West Asian nations will account for 60% of the world’s energy demand by 2035, when the price of imported crude oil will be $215 a barrel in nominal terms, the International Energy Agency (IEA) projected in its World Energy Outlook 2012 report.
By 2025, India will also be the world’s second largest consumer of coal after China, playing a major role in international energy pricing, it said.
“Growth in oil consumption in emerging economies, particularly for transport in China, India and the Middle East, more than outweighs reduced demand in the OECD (Organization of Petroleum Exporting Countries), pushing oil use steadily higher in the New Policies Scenario," the world’s premier energy monitor said in its report. “Oil demand reaches 99.7 mb/d (million barrels per day) in 2035, up from 87.4 mb/d in 2011, and the average IEA crude oil import price rises to $125/barrel (in year-2011 dollars) in 2035 (over $215/barrel in nominal terms)."
The average price of crude oil in the Indian energy basket on 9 November was $106.09.
The US will become the world’s largest oil producer by around 2020, overtaking Saudi Arabia and becoming a net oil exporter by 2030, IEA added.
“This accelerates the switch in direction of international oil trade towards Asia, putting a focus on the security of the strategic routes that bring Middle East oil to Asian markets," the report said.
Signalling a resurgence of OPEC’s importance on the global energy stage and the projected importance of war-ravaged Iraq, IEA said, “Output from OPEC countries rises, particularly after 2020, bringing the OPEC share in global production from its current 42% up towards 50% by 2035.
IEA projects that oil production from Iraq will reach around 6 mb/d by 2020 and 8 mb/d by 2035, making it a key supplier to Asia and earning around $5 trillion in revenue from oil exports by then.
“India will and can be one of the beneficiaries of oil imports from Iraq and play an important role in Iraq’s infrastructure development," said Fatih Birol, IEA chief economist, in a phone interview from Paris.
On the importance of the world’s two major economies for the global coal market, IEA said, “The policy decisions carrying the most weight for the global coal balance will be taken in Beijing and New Delhi—China and India account for almost three-quarters of projected non-OECD coal demand growth (OECD coal use declines)."
This comes in the backdrop of India’s coal shortage with the state-owned Coal India Ltd (CIL) having mined only 431 million tonnes (mt) in 2010-11 against a target of 461.5 mt. Coal demand in India is expected to grow from 649 mt per annum (mtpa) now to 730 mtpa in 2016-17. The availability of local coal is estimated at 550 mt in 2016-17. India’s demand for imported coal is growing and stands at an annual 137 mt.
To maintain its relevance, IEA wants India and China to become its members, as the share of OECD countries in world’s energy demand will come down from the present levels of two-third of the world’s demand to one-third by 2035.
“The relevance of IEA will be challenged if we are not able to find co-operation or even partners in terms of members of IEA. The centre of gravity of global energy system is shifting to (the) East. It is the ultimate call for China and India to become a part of our organization. Our ultimate goal is to have them as members," said Birol.
IEA has been trying to get large energy consuming nations, including India, China and Russia, which are not OECD members, to act in concert to counter supply disruptions.
Mint on 19 October reported on IEA’s keenness to have India, , the world’s fourth-largest energy-consuming nation, as a member.
India’s entry into IEA is likely to boost global energy security and increase the Paris-based agency’s international leverage in its dealings with the OPEC, and comes after China indicated its intention to enter the 28-member IEA grouping. However, to become a member, India will have to meet the eligibility criteria, including maintaining emergency oil reserves equivalent to at least 90 days of net imports and the membership of OECD.
With concerns being raised on energy initiatives affecting water availability, IEA also projected an increase in water consumption by 85% by 2035. “Water needs for energy production are set to grow at twice the rate of energy demand…We estimate that water withdrawals for energy production in 2010 were 583 billion cubic metres (bcm). Of that, water consumption—the volume withdrawn but not returned to its source—was 66 bcm," it said.
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