Analytical Center’s experts Alexander Golyashev and Anna Lobanova took part in the 11th Annual International Congress Oil Terminal 2016. ‘The IMF predicts that in the medium term, global economic growth will pick up pace as a result of growth in the developing countries (particularly in India, the ASEAN, the Middle East, and Latin America), where average economic growth rate is projected to exceed 5% starting from 2020. At the same time, a lot of the key economies of the world are expected to slow down: economic growth in China is projected to drop from 6.9% in 2015 to 5.8% in 2021, in the EU it will go down from 2.3% to 1.7%, and in the US - from 2.6% to 1.6%,’ Alexander Golyashev said during his presentation entitled Current Trends and Prospects of the Global Energy Markets and Russian Exports of Energy Resources: Are We to Expect Growth in Global Demand?
The expert talked about the Energy Development Forecast for the World and Russia 2016, which predicts that natural gas consumption will grow at the fastest rate compared to all other types of fuel through 2040. As a result, the global market shares of fossil fuels will equalize, oil, natural gas and coal each making up roughly a fourth of the global energy consumption. The use of renewable energy sources, such as solar, wind, geothermal, etc., will increase at the fastest pace (more than threefold), and these will account for the remaining fourth of the global demand for energy. On the whole, global energy consumption will see the highest degree of diversification in recorded history in terms of types of fuel.
Energy consumption in various regions will also become more diversified in the forecast period. The largest increase in energy consumption in OECD countries will happen in renewables and natural gas. In Southern and Central America, the CIS and the Middle East it will be mostly natural gas. African Countries will see the most notable increase in the consumption of bioenergy and petroleum products. The emerging Asian markets are expected to see increase in the consumption of all energy resources, first of all coal, with nuclear power growing by far at the fastest pace (more than fivefold) in that region.
Mr. Golyashev believes that demand for liquid fuels will also grow. As production of traditional oil is scaled back – and it is expected to peak before 2020 and then go down again – the role of non-traditional sources, such as shale oil, high viscosity oil and tar sands, will grow, with their total share reaching 15% of total production by 2040 against just 9% in 2015. There will also be an increase in the supply of gas condensate in the total supply of liquid fuels: its share is expected to go up from 17% in 2015 to 20% by 2040.
In terms of regional differences, the largest increase in the production of traditional oil will be seen in the Middle East, while the US will remain the main supplier of shale oil. North America turning into a net exporter of oil does not mean it will stop importing oil, which is due to the fact that oil refineries in the US are designed to process heavy imported oils.
Anna Lobanova made a presentation entitled Competition between Fuels in Asia: Specific Features, Structure and Export Prospects for Russian Traders. In her opinion, a number of fundamental changes are taking place: the global economy is slowing down as are the economies of the traditional leaders, first of all China, while the share of Asia in the global economy is increasing; the crisis continues in Brazil, Russia and South Africa, and the price of oil has fallen significantly in the past three years. According to the expert, governments are increasingly prioritizing environment and energy security, which means they are making more and more deliberate efforts to reduce their dependency on hydrocarbons and boost energy efficiency and alternative energy sources.
Asia is already a key driver of the growing demand for energy and this trend will continue, according to Ms. Lobanova. The largest increase in the demand for all kinds of fuel is expected in the emerging Asian markets, and the largest increase in the export of Russian energy has to do with new opportunities to sell energy resources to Asia. The share of energy exports to Asia-Pacific is going to increase from 15% in 2015 to 30-40% in 2040.