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Despite current recession-driven contractions in energy demand and pricing, a new report by the International Energy Agency (IEA) forecasts that the long-term energy scenario is one of steady growth. The report expects that world oil demand will rise to 106 million bbl/day by 2030, an increase of 24% from 2007’s 84 million bbl/day. Meeting overall energy demand will require more than US$26 trillion. While the power sector will account for $13.6 trillion (52%), most of the rest, according to the report, will go to oil and gas, mostly for exploration and development.

The IEA says that the entire projected increase in world oil demand will come from non-OECD countries, with 80% coming from China, India and the Middle East.

IEA forecasts unrelenting demand for energy

Global demand for natural gas will grow even more quickly than for oil. Its share in total energy demand will rise by 1.8% to 22%, driven mainly by power generation.

However, renewables appear to be the star of the story. According to the IEA, renewables use will overtake gas as the second-largest source of electricity (after coal) soon after 2010. Average rate of growth for these emerging energy sources is 7.2%.

IEA’s forecast is based on an average crude oil import price of $100/bbl in 2007 dollars for 2008-2015, and more than $120 in 2030.

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