DOE/EIA-0484(2016) I May 2016

International Energy Outlook 2016

~ Independent Statistics & Ana[ysis

e~ ~ a~ 1 U.S. ~~ergy. Information Administration

ContactsThe International Energy Outlook 2016 was prepared by the U.S. Energy Information Administration (EIA) under the direction of John Conti, Assistant Administrator for Energy Analysis (john.conti@eia.gov, 202-586-2222); Paul Holtberg, Team Leader, Analysis Integration Team (paul.holtberg@eia.gov, 202-586-1284); Jim Diefenderfer, Director, Office of Electricity, Coal, Nuclear, and Renewables Analysis (jim.diefenderfer@eia.gov, 202-586-2432); Angelina LaRose, Director, Office of Integrated and International Energy Analysis (angelina.larose@eia.gov, 202-586-6135); John Conti, Acting Director, Office of Petroleum, Natural Gas, and Biofuels Analysis (john.conti@eia.gov, 202-586-2222); James T. Turnure, Director, Office of Energy Consumption and Efficiency Analysis (james.turnure@eia.gov, 202-586-1762); and Lynn Westfall, Director, Office of Energy Markets and Financial Analysis (lynn.westfall@eia.gov, 202-586-3811). Specific questions about the report should be referred to the following analysts:

World energy demand and economic outlook ..................................... Linda E. Doman (linda.doman@eia.gov, 202-586-1041) Macroeconomic assumptions .............. Vipin Arora (vipin.arora@eia.gov, 202-586-1048) Liquid fuels ......................................................... Laura E. Singer (laura.singer@eia.gov, 202-586-4787)Natural gas ......................................................... Victoria Zaretskaya (victoria.zaretskaya@eia.gov, 202-287-5501)Coal ...................................................................... Ayaka Jones (ayaka.jones@eia.gov, 202-586-0998) Electricity ............................................................ Thaddeus Huetteman (thaddeus.hutteman@eia.gov, 202-586-7238)Renewable energy ................................... Michelle Bowman (michelle.bowman@eia.gov, 202-586-0526)Nuclear power .......................................... Nancy Slater-Thompson (nancy.slater-thompson@eia.gov, 202-586-9322)Buildings sector ................................................ Behjat Hojjati (behjat.hojjati@eia.gov, 202-586-1068)

David Peterson (david.peterson@eia.gov, 202-586-5084)Industrial sector ................................................ Peter Gross (peter.gross@eia.gov, 202-586-8822)

Paul Otis (paul.otis@eia.gov, 202-586-2306)Transportation sector ..................................... Melissa Lynes (melissa.lynes@eia.gov, 202-586-5192)Energy-related carbon dioxide emissions .............................. Perry Lindstrom (perry.lindstrom@eia.gov, 202-586-0934)

The following also contributed to the production of the IEO2016 report: Greg Adams, Faouzi Aloulou, Lori Aniti, Erin Boedecker, William Brown, Nicholas Chase, Michael Cole, Troy Cook, David Daniels, Mindi Farber-DeAnda, Craig Federhen, Michael Ford, Adrian Geagla, Patricia Hutchins, Scott Jell, Slade Johnson, Jeff Jones, Ari Kahan, Diane Kearney, Augustine Kwon, Danielle Lowenthal-Savy, David Manowitz, Nilay Manzagol, John Maples, Cara Marcy, Laura Martin, Fred Mayes, Michael L. Mellish, Michael Morris, Brian T. Murphy, Chris Namovicz, Kelly Perl, Chetha Phang, John Powell, Anthony Radich, Elizabeth Sendich, Charles L. Smith, Kay Smith, John Staub, and Peggy Wells.

Electronic access and related reportsIEO2016, including text, forecast tables, and graphics, will be available on the EIA Home Page (www.eia.gov/ieo) by June 30, 2016, including text, forecast tables, and graphics. To download the entire publication in Portable Document Format (PDF), go to www.eia.gov/forecasts/ieo/pdf/0484(2016).pdf.For ordering information and questions on other energy statistics available from EIA, please contact EIAs Office of Communications. Addresses and telephone numbers are as follows: Office of Communications, EI-40

U.S. Energy Information Administration Forrestal Building Washington, DC 20585

Telephone: 202-586-8800 E-mail: infoctr@eia.gov 24-hour automated information line Website: www.eia.gov FAX: 202-586-0114

mailto:john.conti@eia.govmailto:paul.holtberg@eia.govmailto:jim.diefenderfer@eia.govmailto:angelina.larose@eia.govmailto:john.conti@eia.govmailto:james.turnure@eia.govmailto:lynn.westfall@eia.govmailto:linda.doman@eia.govmailto:vipin.arora@eia.govmailto:laura.singer@eia.govmailto:victoria.zaretskaya@eia.govmailto:ayaka.jones@eia.govmailto:thaddeus.hutteman@eia.govmailto:michelle.bowman@eia.govmailto:nancy.slater-thompson@eia.govmailto:behjat.hojjati@eia.govmailto:david.peterson@eia.govmailto:peter.gross@eia.govmailto:paul.otis@eia.govmailto:melissa.lynes@eia.govmailto:perry.lindstrom@eia.govwww.eia.gov/ieowww.eia.gov/forecasts/ieo/pdf/0484(2016).pdfmailto:infoctr@eia.govwww.eia.gov

International Energy Outlook 2016

With Projections to 2040

May 2016

U.S. Energy Information AdministrationOffice of Energy Analysis

U.S. Department of EnergyWashington, DC 20585

This report was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy. By law, EIAs data, analyses, and forecasts are independent of approval by any other officer or employee of the United States Government. The views in this report therefore should not be construed as representing those of the Department of Energy or other federal agencies.

This publication is on the Web at:www.eia.gov/forecasts/ieo

www.eia.gov/forecasts/ieo

U.S. Energy Information Administration | International Energy Outlook 2016ii

PrefaceThe International Energy Outlook 2016 (IEO2016) presents an assessment by the U.S. Energy Information Administration (EIA) of the outlook for international energy markets through 2040. U.S. projections appearing in IEO2016 are consistent with those published in EIAs Annual Energy Outlook 2015 (AEO2015). IEO2016 is provided as a service to energy managers and analysts, both in government and in the private sector. The projections are used by international agencies, federal and state governments, trade associations, and other planners and decisionmakers. They are published pursuant to the Department of Energy Organization Act of 1977 (Public Law 95-91), Section 205(c).The IEO2016 energy consumption projections are divided according to Organization for Economic Cooperation and Development members (OECD)1 and nonmembers (non-OECD). OECD members are divided into three basic country groupings: OECD Americas (United States, Canada, and Mexico/Chile), OECD Europe, and OECD Asia (Japan, South Korea, and Australia/New Zealand). Non-OECD countries are divided into five separate regional subgroups: non-OECD Europe and Eurasia (which includes Russia); non-OECD Asia (which includes China and India); Middle East; Africa; and non-OECD Americas (which includes Brazil). In some instances, the IEO2016 energy production models have different regional aggregations to reflect important production sources (for example, Middle East OPEC is a key region in the projections for liquids production). Complete regional definitions are listed in Appendix M.IEO2016 focuses exclusively on marketed energy. Nonmarketed energy sources,2 which continue to play an important role in some developing countries, are not included in the estimates. The IEO2016 projections are based on existing U.S. and foreign government laws and regulations. In general, IEO2016 reflects the effects of current policiesoften stated through regulationswithin the projections. EIA analysts attempt to interpret the likely effects of announced country targets when the implementation of those targets will require new policies that have not been formulated or announced.

The report begins with a review of world trends in energy demand and the major macroeconomic assumptions used in deriving the IEO2016 projections, along with the major sources of uncertainty in the projections, which extend through 2040. In addition to the Reference case projections, High Economic Growth and Low Economic Growth cases were developed to consider the effects of higher and lower growth paths for economic activity than are assumed in the Reference case. IEO2016 also includes a High Oil Price case and, alternatively, a Low Oil Price case. The resulting projectionsand the uncertainty associated with international energy projections in generalare discussed in Chapter 1, World energy demand and economic outlook.Projections for energy consumption and production by fuelpetroleum and other liquid fuels, natural gas, and coalare presented in Chapters 2, 3, and 4, along with reviews of the current status of each fuel on a worldwide basis. Chapter 5 discusses the projections for world electricity marketsincluding nuclear power, hydropower, and other marketed renewable energy resourcesand presents projections of world installed generating capacity. Chapter 6 presents a discussion of energy used in the buildings sector (residential and commercial). Chapter 7 provides a discussion of industrial sector energy use. Chapter 8 includes a detailed look at the worlds transportation energy use. Finally, Chapter 9 discusses the outlook for global energy-related carbon dioxide emissions.

1 OECD includes all members of the organization as of January 1, 2016, in all the time series included in this report. Israel, which became a member in 2010, is included in OECD Europe for statistical reporting purposes.

2 Nonmarketed energy sources include selected energy consumption data for which the energy is not bought or sold, either directly or indirectly, as an input to marketed energyparticularly, traditional fuels such as fuelwood, charcoal, agricultural waste, and animal dung used for cooking and water heating. EIA does not estimate or project total consumption of nonmarketed energy.

Objectives of the IEO2016 projectionsThe projections in IEO2016 are not statements of what will happen, but what might happen given the specific assumptions and methodologies used for any particular scenario. The Reference case projection is a business-as-usual trend estimate, given known technology and technological and demographic trends. EIA explores the effects of alternative assumptions in other scenarios with different macroeconomic growth rates and world oil prices. The IEO2016 cases generally assume that current laws and regulations are maintained throughout the projections. Thus, the projections provide policy-neutral baselines that can be used to analyze international energy markets.While energy markets are complex, energy models are simplified representations of energy production and consumption, regulations, and producer and consumer behavior. Projections are highly dependent on the data, methodologies, model structures, and assumptions used in their development. Behavioral characteristics are indicative of real-world tendencies, rather than representations of specific outcomes.Energy market projections are subject to much uncertainty. Many of the events that shape energy markets are random and cannot be anticipated. In addition, future developments in technologies, demographics, and resources cannot be foreseen with certainty. Key uncertainties in the IEO2016 projections are addressed through alternative cases.EIA has endeavored to make these projections as objective, reliable, and useful as possible. They are intended to serve as an adjunct to, not a substitute for, a complete and focused analysis of public policy initiatives.

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Appendix A contains summary tables for the IEO2016 Reference case projections of world energy consumption, GDP, energy consumption by fuel, carbon dioxide emissions, and regional population growth. Summary tables of projections for the High and Low Economic Growth cases are provided in Appendixes B and C, respectively; and projections for the High and Low Oil Price cases are provided in Appendixes D and E, respectively. Reference case projections for delivered energy consumption by end-use sector and region are presented in Appendix F. Appendix G contains summary tables of projections for world petroleum and other liquids production in the three IEO2016 oil price cases. Appendix H contains summary tables of Reference case projections for installed electric power capacity by fuel and regional electricity generation. Appendix I contains summary tables for projections of world natural gas production in the Reference case. Appendix J includes tables of population, per capita economic output, energy intensity of the economy, and carbon intensity of energy. In Appendix K, a set of comparisons of projections from the International Energy Agencys World Energy Outlook 2015 with the IEO2016 projections is presented. Comparisons of the IEO2016 and IEO2013 projections are also presented in Appendix K. Appendix L describes the models used to generate the IEO2016 projections. Appendix M defines the regional designations included in the report.

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ContentsExecutive Summary ......................................................................................................................................................................................... 1

World energy markets by fuel type ......................................................................................................................................................... 1Liquid fuels .......................................................................................................................................................................................... 2Natural gas .......................................................................................................................................................................................... 2Coal ..................................................................................................................................................................................................... 3Electricity ............................................................................................................................................................................................. 4

World delivered energy use by sector.................................................................................................................................................... 4Residential and commercial buildings .............................................................................................................................................. 4Industrial .............................................................................................................................................................................................. 5Transportation ..................................................................................................................................................................................... 5

World carbon dioxide emissions ............................................................................................................................................................. 5

World energy demand and economic outlook ............................................................................................................................................ 7Overview .................................................................................................................................................................................................. 7EIAs handling of non-U.S. policies in the International Energy Outlook............................................................................................. 7Outlook for world energy consumption by source ................................................................................................................................. 9Delivered energy consumption by end-use sector ................................................................................................................................ 11

Buildings sector .................................................................................................................................................................................. 11EIAs handling of discrepancies in international energy data ............................................................................................................... 12

Industrial sector .................................................................................................................................................................................. 12Transportation sector ......................................................................................................................................................................... 13

World economic outlook .......................................................................................................................................................................... 13OECD economies ............................................................................................................................................................................... 13Non-OECD economies....................................................................................................................................................................... 15

Alternative cases in IEO2016 ................................................................................................................................................................. 16Alternative economic growth cases .................................................................................................................................................. 16Alternative oil price cases .................................................................................................................................................................. 17

Petroleum and other liquid fuels ................................................................................................................................................................... 19Overview .................................................................................................................................................................................................. 19Shale oil and tight gas: Recent developments outside North America ............................................................................................... 21IEO2016 Reference case ........................................................................................................................................................................ 22

World petroleum and other liquid fuels consumption....................................................................................................................... 22Effects of regulation on world demand for residual fuel oil .................................................................................................................. 23

OECD ............................................................................................................................................................................................. 24Non-OECD ..................................................................................................................................................................................... 25

Industrial CO2 emissions and petroleum coke use in refineries.......................................................................................................... 25World petroleum and other liquid fuels supplies .............................................................................................................................. 27

OPEC crude oil and lease condensate supply............................................................................................................................ 27Non-OPEC crude and lease condensate supply ........................................................................................................................ 28Other liquids supply ....................................................................................................................................................................... 28

Irans return to the international oil market ............................................................................................................................................ 29Foreign investment in Algerias hydrocarbon development ................................................................................................................. 30Update on Mexicos petroleum sector reforms ...................................................................................................................................... 32New biofuels from hydroprocessed esters and fatty acids ................................................................................................................... 33Low Oil Price case ................................................................................................................................................................................... 34High Oil Price case .................................................................................................................................................................................. 34Reserves .................................................................................................................................................................................................. 35

Natural gas ........................................................................................................................................................................................................ 37Overview .................................................................................................................................................................................................. 37OECD natural gas consumption ............................................................................................................................................................. 38

OECD Americas .................................................................................................................................................................................. 38OECD Europe ..................................................................................................................................................................................... 39OECD Asia .......................................................................................................................................................................................... 39

Natural gas prices in Asia ....................................................................................................................................................................... 40Non-OECD natural gas consumption..................................................................................................................................................... 41

Non-OECD Europe and Eurasia ....................................................................................................................................................... 41Non-OECD Asia .................................................................................................................................................................................. 41Middle East ......................................................................................................................................................................................... 42Africa .................................................................................................................................................................................................... 42Non-OECD Americas ......................................................................................................................................................................... 42

World natural gas production .................................................................................................................................................................. 43OECD production ............................................................................................................................................................................... 44

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Contents (continued)OECD Americas ............................................................................................................................................................................ 44OECD Europe ................................................................................................................................................................................ 44OECD Asia ..................................................................................................................................................................................... 44

Non-OECD production ....................................................................................................................................................................... 45Middle East .................................................................................................................................................................................... 45Non-OECD Europe and Eurasia .................................................................................................................................................. 45Africa .............................................................................................................................................................................................. 46Non-OECD Asia ............................................................................................................................................................................. 46

Shale gas development in China: Government investment and decreasing well costs .................................................................... 47Non-OECD Americas .................................................................................................................................................................... 49

World natural gas trade ........................................................................................................................................................................... 49Global LNG trade and supply ................................................................................................................................................................. 49

OECD natural gas trade ..................................................................................................................................................................... 51Liquefied natural gas: Growing use of floating storage and regasification units ................................................................................ 51

OECD Americas ............................................................................................................................................................................ 52U.S. natural gas exports to Mexico ........................................................................................................................................................ 53

OECD Europe ................................................................................................................................................................................ 53OECD Asia ..................................................................................................................................................................................... 53

Non-OECD natural gas trade ............................................................................................................................................................ 54Non-OECD Europe and Eurasia .................................................................................................................................................. 54Middle East .................................................................................................................................................................................... 54

Potential for increased natural gas exports from Iran following the end of international sanctions .................................................. 55Africa .............................................................................................................................................................................................. 56Non-OECD Asia ............................................................................................................................................................................. 57Non-OECD Americas .................................................................................................................................................................... 58

World natural gas reserves ..................................................................................................................................................................... 58

Coal .................................................................................................................................................................................................................... 61Overview .................................................................................................................................................................................................. 61World coal consumption .......................................................................................................................................................................... 62

OECD coal consumption .................................................................................................................................................................... 62OECD Americas ............................................................................................................................................................................ 63OECD Europe ................................................................................................................................................................................ 63OECD Asia ..................................................................................................................................................................................... 63

Non-OECD coal consumption ........................................................................................................................................................... 64Non-OECD Asia ............................................................................................................................................................................. 64

Structural transformations in Chinas energy economy ........................................................................................................................ 64Non-OECD Europe and Eurasia .................................................................................................................................................. 68Africa .............................................................................................................................................................................................. 68

World coal production .............................................................................................................................................................................. 68Indias coal supply chain: Challenges and reforms ............................................................................................................................... 68

Coal production challenges ............................................................................................................................................................... 69Private sector coal development in transition................................................................................................................................... 70Permitting issues and environmental complications ........................................................................................................................ 71Rail infrastructure issues .................................................................................................................................................................... 71Land acquisition challenges .............................................................................................................................................................. 72

World coal trade ....................................................................................................................................................................................... 72Imports ................................................................................................................................................................................................. 72Exports ................................................................................................................................................................................................ 75

Recent developments in world coal trade.............................................................................................................................................. 75Coal imports ........................................................................................................................................................................................ 76Coal exports ........................................................................................................................................................................................ 77Uncertainties in future prospects for international coal trade.......................................................................................................... 77World coal reserves ............................................................................................................................................................................ 78

Electricity ........................................................................................................................................................................................................... 81Overview .................................................................................................................................................................................................. 81Electricity generation by source ............................................................................................................................................................. 83

Coal ..................................................................................................................................................................................................... 83Natural gas .......................................................................................................................................................................................... 84Petroleum and other liquid fuels ........................................................................................................................................................ 84Renewable resources ........................................................................................................................................................................ 84

World production of solar photovoltaic modules ................................................................................................................................... 85

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Contents (continued)Plans for hydroelectric generation capacity additions in Southeast Asia ............................................................................................ 86World markets for wood pellets .............................................................................................................................................................. 87

Nuclear power ..................................................................................................................................................................................... 89Variability in electricity generation capacity factors by region and fuel ............................................................................................... 89Regional electricity markets in non-OECD Asia .................................................................................................................................... 91

China ................................................................................................................................................................................................... 91India ..................................................................................................................................................................................................... 93

Electricity transmission and distribution system losses in India .......................................................................................................... 93Vietnam ............................................................................................................................................................................................... 96

Economic transition ....................................................................................................................................................................... 97Future electricity generation ......................................................................................................................................................... 98Challenges ..................................................................................................................................................................................... 98

Buildings sector energy consumption .......................................................................................................................................................... 101Overview .................................................................................................................................................................................................. 101Residential sector .................................................................................................................................................................................... 101

OECD residential energy consumption ............................................................................................................................................ 101OECD Americas ............................................................................................................................................................................ 101OECD Europe ................................................................................................................................................................................ 102OECD Asia ..................................................................................................................................................................................... 102

Non-OECD residential energy consumption .................................................................................................................................... 102Non-OECD Asia ............................................................................................................................................................................. 103

Effects of urbanization on energy demand and greenhouse gas emissions in China ....................................................................... 103Chinas policies to increase energy efficiency in buildings .................................................................................................................. 105

Non-OECD Europe and Eurasia .................................................................................................................................................. 106Other non-OECD ........................................................................................................................................................................... 106

Commercial sector ................................................................................................................................................................................... 107OECD commercial energy consumption .......................................................................................................................................... 107

OECD Americas ............................................................................................................................................................................ 108OECD Europe ................................................................................................................................................................................ 109OECD Asia ..................................................................................................................................................................................... 109

Non-OECD commercial energy consumption .................................................................................................................................. 109Non-OECD Asia ............................................................................................................................................................................. 110Other non-OECD ........................................................................................................................................................................... 110

Electricity demand for space cooling in India ........................................................................................................................................ 111

Industrial sector energy consumption .......................................................................................................................................................... 113Overview .................................................................................................................................................................................................. 113Regional gross output and industrial energy consumption .................................................................................................................. 114Energy-intensive industries ..................................................................................................................................................................... 117Regional focus: OECD Europe and non-OECD Asia ........................................................................................................................... 118

OECD Europe ..................................................................................................................................................................................... 119Non-OECD Asia ....................................................................................................................................................................................... 119

China ................................................................................................................................................................................................... 119Steel energy demand growth in China ........................................................................................................................................ 119

Steel and aluminum recycling in China .................................................................................................................................................. 120Chemicals industry growth and coal consumption ..................................................................................................................... 121

Urbanization and industrial energy demand in China ........................................................................................................................... 122Other non-OECD Asia ............................................................................................................................................................................. 123Role of electricity in changing patterns of non-OECD Asia industrial energy use .............................................................................. 124

Transportation sector energy consumption ................................................................................................................................................ 127Overview .................................................................................................................................................................................................. 127Transportation sector energy consumption by fuel ............................................................................................................................... 127OECD transportation sector energy consumption ................................................................................................................................ 128Motor vehicle fuel economy and emissions standards by country ...................................................................................................... 128Non-OECD transportation sector energy consumption ........................................................................................................................ 129

Non-OECD Asia .................................................................................................................................................................................. 129Other non-OECD ................................................................................................................................................................................ 129

Transportation sector energy consumption by mode ........................................................................................................................... 129World transportation energy use for passenger travel ......................................................................................................................... 131World stocks of passenger jet aircraft .................................................................................................................................................... 132Transportation sector travel demand ..................................................................................................................................................... 133Variations in air passenger travel by region and income level ............................................................................................................. 135

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Contents (continued)Energy-related CO2 emissions ...................................................................................................................................................................... 139

Overview .................................................................................................................................................................................................. 139Policies to limit CO2 emissions in the United States and China.......................................................................................................... 140CO2 emissions by fuel ............................................................................................................................................................................ 141Uncertainties in projecting European Union emissions reductions ..................................................................................................... 142CO2 emissions by region ........................................................................................................................................................................ 143U.S. Clean Power Plan Rule................................................................................................................................................................... 144IEO2016 factors influencing trends in energy-related CO2 emissions ............................................................................................... 145The Kaya decomposition of emissions trends ....................................................................................................................................... 146

AppendixesA. Reference case projections................................................................................................................................................................ 161B. High Economic Growth case projections .......................................................................................................................................... 179C. Low Economic Growth case projections ........................................................................................................................................... 183D. High Oil Price case projections .......................................................................................................................................................... 187E. Low Oil Price case projections ........................................................................................................................................................... 193F. Reference case projections by end-use sector and country grouping ............................................................................................ 199G. Projections of petroleum and other liquids production in three cases............................................................................................ 221H. Reference case projections for electricity capacity and generation by fuel ................................................................................... 233I. Reference case projections for natural gas production ..................................................................................................................... 257J. Kaya Identity factor projections .......................................................................................................................................................... 263K. Comparisons with International Energy Agency and IEO2013 projections .................................................................................... 269L. Models used to generate the IEO2016 projections .......................................................................................................................... 273M. Regional definitions ............................................................................................................................................................................ 275

TablesWorld energy demand and economic outlook ............................................................................................................................................ 7

Table 1-1. World energy consumption by country grouping, 201240 ................................................................................................ 7Table 1-2. World gross domestic product by country grouping, 201240 .......................................................................................... 14

Petroleum and other liquid fuels ................................................................................................................................................................... 19Table 2-1. North Sea Brent crude oil spot prices in three cases, 201240 ......................................................................................... 20Table 2-2. World petroleum and other liquid fuels consumption by region, IEO2016 Reference case, 19902040 ....................... 24Table 2-3. Pemex bid Round One process and timeline as of December 2015................................................................................. 32

Natural gas ........................................................................................................................................................................................................ 37Table 3-1. World natural gas production by region and country in the Reference case, 201240 ................................................... 43Table 3-2. World natural gas reserves by country as of January 1, 2016 ........................................................................................... 59

Coal .................................................................................................................................................................................................................... 61Table 4-1. World coal production by region, 201240 .......................................................................................................................... 69Table 4-2. World coal flows by importing and exporting regions and coal type, Reference case, 2013, 2020, and 2040 .............. 73Table 4-3. World recoverable coal reserves as of January 1, 2012 .................................................................................................... 79

Electricity ........................................................................................................................................................................................................... 81Table 5-1. OECD and non-OECD net electricity generation by energy source, 201240 ................................................................. 82Table 5-2. OECD and non-OECD net renewable electricity generation by energy source, 201040 .............................................. 85

Buildings sector energy consumption .......................................................................................................................................................... 101Table 6-1. Annual average percent change in commercial sector delivered energy consumption by region .................................. 107

Industrial sector energy consumption .......................................................................................................................................................... 113Table 7-1. World industrial sector: major groupings and representative industries............................................................................ 113Table 7-2. World industrial sector delivered energy consumption by region and energy source, 201240 ..................................... 114Table 7-3. Average annual growth in gross output by region and sector, 201240 ........................................................................... 115

Energy-related CO2 emissions ...................................................................................................................................................................... 139Table 9-1. World energy-related carbon dioxide emissions by fuel type, 19902040 ....................................................................... 139Table 9-2. World energy-related carbon dioxide emissions by region and country in the Reference case with and without the U.S. Clean Power Plan (CPP), 19902040 ................................................................................................................ 143Table 9-3. Average annual changes in Kaya factors by region and country in the Reference case with and without the U.S. Clean Power Plan (CPP), 201240 .................................................................................................................... 147

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Tables (continued)Comparisons with International Energy Agency and IEO2013 projections ............................................................................................ 269

Table K1. Comparison of IEO2016 and IEA world energy consumption growth rates by region, 201220 ..................................... 269Table K2. Comparison of IEO2016 and IEA world energy consumption growth rates by energy source, 201220 ....................... 270Table K3. Comparison of IEO2016 and IEA world energy consumption growth rates by region, 202040 ..................................... 270Table K4. Comparison of IEO2016 and IEA world energy consumption growth rates by energy source, 202040 ....................... 271

FiguresExecutive Summary ......................................................................................................................................................................................... 1

Figure ES-1. World energy consumption by country grouping, 201240 ........................................................................................... 1Figure ES-2. Total world energy consumption by energy source, 19902040 ................................................................................... 1Figure ES-3. Petroleum and other liquid fuels production by region and type in the Reference case, 20002040 ........................ 2Figure ES-4. World increase in natural gas production, 201240 ....................................................................................................... 3Figure ES-5. Coal consumption in China, India, and the United States, 19902040 ........................................................................ 3Figure ES-6. World net electricity generation by energy source, 201240 ........................................................................................ 4Figure ES-7. World transportation sector delivered energy consumption by energy source, 201240 ........................................... 5Figure ES-8. World energy-related carbon dioxide emissions by fuel type, 19902040 ................................................................... 6

World energy demand and economic outlook ............................................................................................................................................ 7Figure 1-1. World energy consumption, 19902040 ............................................................................................................................ 7Figure 1-2. World energy consumption by region, 19902040 ............................................................................................................ 8Figure 1-3. World total gross domestic product, 19902040 ............................................................................................................... 8Figure 1-4. Non-OECD energy consumption by region, 19902040 .................................................................................................. 9Figure 1-5. World energy consumption by energy source, 19902040 .............................................................................................. 9Figure 1-6. World net electricity generation by energy source, 201240 ........................................................................................... 10Figure 1-7. World net electricity generation from renewable energy sources, 2012 and 2040 ......................................................... 11Figure 1-8. World nuclear electricity generation capacity by region, 2012 and 2040 ........................................................................ 11Figure 1-9. OECD real gross domestic product growth rates, 201240 ............................................................................................. 14Figure 1-10. Non-OECD real gross domestic product growth rates, 201240 ................................................................................... 15Figure 1-11. World energy consumption by region in three economic growth cases, 2012, 2025, and 2040 ................................. 16Figure 1-12. World energy consumption by fuel in three oil price cases, 2012, 2025, and 2040 ..................................................... 17

Petroleum and other liquid fuels ................................................................................................................................................................... 19Figure 2-1. North Sea Brent crude oil spot prices in three cases, 19902040 ................................................................................... 20Figure 2-2. World tight oil production in the IEO2016 Reference case, 2012, 2020, and 2040 ........................................................ 20Figure 2-3. EIA/ARI assessments of shale gas and tight oil resources in Argentinas Nequen Basin and

Chinas Sichuan Basin ......................................................................................................................................................... 21Figure 2-4. Liquid fuels supply and demand and North Sea Brent crude oil equilibrium prices in three cases, 2040 .................... 22Figure 2-5. World consumption of residual fuel oil, 19862012 .......................................................................................................... 23Figure 2-6. Current and proposed Marpol regulations on sulfur content of residual fuel oil, 20002027 ........................................ 23Figure 2-7. OECD and non-OECD petroleum and other liquid fuels consumption, IEO2016 Reference case, 19902040 .......... 24Figure 2-8. Non-OECD petroleum and other liquid fuels consumption by region, IEO2016 Reference case, 19902040 ............ 24Figure 2-9. Energy consumption in U.S. and China refineries by fuel type, 2012 ............................................................................. 26Figure 2-10. Petroleum and other liquid fuels production by region and type in the IEO2016 Reference case, 20002040 ........ 27Figure 2-11. OPEC crude and lease condensate production by region in the IEO2016 Reference case,

2012, 2020, and 2040 ........................................................................................................................................................ 28Figure 2-12. World other liquid fuels production by source, 2012, 2020, and 2040 .......................................................................... 28Figure 2-13. Crude oil production in Algeria, 2005-14 .......................................................................................................................... 30Figure 2-14. Natural gas production in Algeria, 2005-14 ...................................................................................................................... 30Figure 2-15. Oil and natural gas basins and pipeline infrastructure in Algeria ................................................................................... 31Figure 2-16. World production of renewable diesel fuels from hydroprocessed esters and fatty acids, 201114 .......................... 33Figure 2-17. World petroleum liquid fuels consumption in three cases, 2012 and 2040 .................................................................. 34Figure 2-18. World petroleum and other liquid fuels production in three cases, 2012 and 2040 .................................................... 35

Natural gas ........................................................................................................................................................................................................ 37Figure 3-1. World natural gas consumption, 201240 ......................................................................................................................... 37Figure 3-2. World increase in natural gas production by country grouping, 201240 ....................................................................... 37Figure 3-3. Natural gas production by type in China, Canada, and the United States, 2012 and 2040 .......................................... 38Figure 3-4. OECD Americas natural gas consumption by country, 201240 ..................................................................................... 38Figure 3-5. OECD Americas change in natural gas consumption by country and end-use sector, 201240 .................................. 38Figure 3-6. OECD Europe natural gas consumption by end-use sector, 201240 ............................................................................ 39Figure 3-7. OECD Asia natural gas consumption by country and end-use sector, 201240 ............................................................ 39Figure 3-8. World crude oil, natural gas, and liquefied natural gas prices, 201015 ......................................................................... 40Figure 3-9. Asia Pacific natural gas trade by country and contract type, 2010 and 2014 ................................................................. 40

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Figures (continued)Figure 3-10. Non-OECD Europe and Eurasia natural gas consumption, 201240 ........................................................................... 41Figure 3-11. Non-OECD Asia natural gas consumption by region, 201240 ..................................................................................... 41Figure 3-12. Middle East natural gas consumption by end-use sector, 201240 .............................................................................. 42Figure 3-13. Africa natural gas consumption by end-use sector, 201240 ......................................................................................... 42Figure 3-14. Non-OECD Americas natural gas consumption by end-use sector, 201240 .............................................................. 43Figure 3-15. OECD natural gas production by country and region, 201240 .................................................................................... 44Figure 3-16. OECD Europe natural gas production, 201240 ............................................................................................................. 44Figure 3-17. Middle East natural gas production by country, 201240 ............................................................................................... 45Figure 3-18. Non-OECD Europe and Eurasia natural gas production, 201240 ............................................................................... 45Figure 3-19. Africa natural gas production by region, 201240 ........................................................................................................... 46Figure 3-20. Non-OECD Asia natural gas production by source, 201240 ........................................................................................ 46Figure 3-21. China natural gas production by type, 201240 .............................................................................................................. 46Figure 3-22. Cost of drilling a shale gas well in the Sichuan Basin, 2013 and 2015 ......................................................................... 47Figure 3-23. Cost components of shale gas well development in the Sichuan Basin, 2015 ............................................................. 47Figure 3-24. EIA/ARI assessment of shale gas and tight oil resources in Chinas Sichuan Basin ................................................... 48Figure 3-25. Non-OECD Americas natural gas production, 201240 ................................................................................................. 49Figure 3-26. Global LNG trade by contract type, 2010 and 2014 ........................................................................................................ 50Figure 3-27. Global LNG capacity additions by country, 201519 ...................................................................................................... 51Figure 3-28. Floating LNG regasification share of total world regasification capacity, 200616 ...................................................... 52Figure 3-29. Floating LNG regasification capacity by region, 200616 .............................................................................................. 52Figure 3-30. OECD Americas net natural gas trade, 201240 ............................................................................................................ 52Figure 3-31. OECD Asia net natural gas trade, 201240..................................................................................................................... 53Figure 3-32. Non-OECD Europe and Eurasia net natural gas trade, 201240 .................................................................................. 54Figure 3-33. Middle East net natural gas trade, 201240 .................................................................................................................... 54Figure 3-34. Africa net natural gas trade, 201240 .............................................................................................................................. 56Figure 3-35. Non-OECD Asia net natural gas trade, 201240 ............................................................................................................ 57Figure 3-36. Non-OECD Americas net natural gas trade, 201240 .................................................................................................... 58Figure 3-37. World proved natural gas reserves by region, 19802016 ............................................................................................. 58Figure 3-38. World proved natural gas reserves by region as of January 1, 2016 ............................................................................ 59

Coal .................................................................................................................................................................................................................... 61Figure 4-1. World coal consumption by region, 19802040 ................................................................................................................ 61Figure 4-2. Coal consumption in China, the United States, and India, 19902040 ........................................................................... 61Figure 4-3. Coal share of world energy consumption by sector, 2012, 2020, and 2040 ................................................................... 62Figure 4-4. World coal production, 201240 ........................................................................................................................................ 62Figure 4-5. OECD coal consumption by region, 1980, 2012, 2020, and 2040 ................................................................................... 63Figure 4-6. Non-OECD coal consumption by region, 1980, 2012, 2020, and 2040 .......................................................................... 64Figure 4-7. China coal consumption and net imports, 20002014 ...................................................................................................... 64Figure 4-8. China coal prices, 200414 ................................................................................................................................................. 65Figure 4-9. Economic composition of gross domestic product in China and developed economies by sector, 19702014 .......... 65Figure 4-10. Annual changes in production from Chinas coal-intensive industries, 200314 .......................................................... 66Figure 4-11. Coal consumption in the United States and China and in Chinas electric power and industrial sectors,

2012, 2020, and 2040 ........................................................................................................................................................ 67Figure 4-12. Coal share of Chinas energy consumption by sector, 2012, 2020, and 2040.............................................................. 67Figure 4-13. Indias domestic coal consumption, production, and production targets by fiscal year, 200420 ............................... 70Figure 4-14. Indias coal production and coal-fired electricity generation capacity by state, FY201314 ....................................... 72Figure 4-15. World coal imports by major importing region, 19952040 ............................................................................................ 73Figure 4-16. World coal trade by coal type, 19952014....................................................................................................................... 76Figure 4-17. Annual changes in total world coal trade, 19952014 .................................................................................................... 76Figure 4-18. World coal trade by importing and exporting regions, 2008 and 2013 .......................................................................... 76Figure 4-19. Average annual steam coal export prices by country of origin, 19902014.................................................................. 78Figure 4-20. Average annual coking coal export prices by country of origin, 19902014 ................................................................. 78

Electricity ........................................................................................................................................................................................................... 81Figure 5-1. OECD and non-OECD net electricity generation, 19902040 ......................................................................................... 81Figure 5-2. Growth in world electricity generation and GDP, 200540 ............................................................................................... 81Figure 5-3. World net electricity generation by fuel, 201240 ............................................................................................................. 83Figure 5-4. World net electricity generation from renewable power by fuel, 201240 ...................................................................... 84Figure 5-5. World solar photovoltaic manufacturing production and capability, 200613 ................................................................. 86Figure 5-6. World installed solar photovoltaic capacity by country, 200612, and projected total installed capacity in 2020 ........ 86Figure 5-7. Hydroelectric generating capacity in Southeast Asia, 2012, and planned additions, 201220, by country ................. 87Figure 5-8. Top five destinations for wood pellets exported from Canada and the United States, 201214 ................................... 88Figure 5-9. Average annual capacity factors for electricity generators by IEO region and energy source, 200812 ..................... 89

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Figures (continued)Figure 5-10. Non-OECD Asia electricity generation fuel mix by region, 2012 and 2040 ................................................................... 91Figure 5-11. China renewable electricity generation capacity in the IEO2016 Reference case, 201520, and aggregate

government targets for solar, wind, and hydropower electricity generation capacity ................................................... 92Figure 5-12. China electricity generation by fuel source, 201240 ..................................................................................................... 93Figure 5-13. India electricity generation by fuel source, 201240 ....................................................................................................... 93Figure 5-14. World electricity transmission and distribution losses by selected countries and regions, 2001 and 2013 ............... 94Figure 5-15. Aggregated technical and commercial losses of Indian utilities that sell directly to consumers, 200313 ................. 95Figure 5-16. Installed electricity generation capacity in Vietnam, 2014 .............................................................................................. 96Figure 5-17. Electricity demand in Vietnam, 201030 .......................................................................................................................... 97Figure 5-18. Vietnam electricity generation capacity by fuel, 201530 ............................................................................................... 98Figure 5-19. Vietnam projected electricity generation capacity by fuel, 2030 .................................................................................... 99

Buildings sector energy consumption .......................................................................................................................................................... 101Figure 6-1. Average annual change in OECD residential sector energy consumption, 201240 ..................................................... 101Figure 6-2. Average annual change in OECD residential sector energy consumption per capita, 201240 ................................... 102Figure 6-3. Residential sector energy consumption in selected OECD regions by energy source, 2012 and 2040 ...................... 102Figure 6-4. Average annual change in non-OECD residential sector energy consumption, 201240 ............................................. 103Figure 6-5. Average annual change in non-OECD residential sector energy consumption per capita, 201240 ........................... 103Figure 6-6. Residential energy consumption and urban population growth in China, 19902012 .................................................. 104Figure 6-7. Chinas residential sector energy consumption per capita and per thousand dollars of GDP, 19902012 .................. 104Figure 6-8. Residential sector energy consumption in selected non-OECD regions by energy source, 2012 and 2040 ............... 104Figure 6-9. Buildings energy consumption in China, 19982012 ........................................................................................................ 105Figure 6-10. World commercial sector delivered energy consumption by energy source, 201240 ................................................ 107Figure 6-11. OECD commercial sector delivered energy consumption by energy source, 201240 ............................................... 108Figure 6-12. Average annual change in OECD GDP per capita, 201240 ......................................................................................... 108Figure 6-13. Average annual change in OECD commercial sector energy consumption, 201240 ................................................ 108Figure 6-14. Ratio of OECD commercial sector energy consumption to industrial sector energy consumption by region,

2012 and 2040 ................................................................................................................................................................... 109Figure 6-15. Average annual change in non-OECD commercial sector energy consumption, 201240 ......................................... 110Figure 6-16. Average annual change in non-OECD GDP per capita, 201240 ................................................................................. 110Figure 6-17. Non-OECD commercial sector delivered energy consumption by energy source, 201240 ...................................... 110Figure 6-18. Estimated cooling degree days per year and populations in selected Indian and U.S. cities, 2011 ........................... 111

Industrial sector energy consumption .......................................................................................................................................................... 113Figure 7-1. Global gross output by industrial subsector, 2012 and 2040............................................................................................ 114Figure 7-2. OECD industrial sector delivered energy consumption by energy source, 201240 ..................................................... 116Figure 7-3. Non-OECD industrial sector delivered energy consumption by energy source, 201240 ............................................. 116Figure 7-4. Energy-intensive industry shares of total OECD industrial sector energy consumption, 2012 and 2040 .................... 117Figure 7-5. Energy-intensive industry shares of total non-OECD industrial sector energy consumption, 2012 and 2040 ............. 117Figure 7-6. OECD Europe industrial sector delivered energy consumption by energy source, 201240 ........................................ 119Figure 7-7. Steel and aluminum production from primary and secondary sources in China and the United States, 2012 ............ 121Figure 7-8. Coal and electricity consumption in Chinas steel industry, 201240 .............................................................................. 121Figure 7-9. Industrial energy consumption and urban population growth in China, 19902012 ...................................................... 122Figure 7-10. Comparisons of energy use per capita and per dollar of gross domestic product in China and the OECD,

19902012 .......................................................................................................................................................................... 123Figure 7-11. Fuel and feedstock consumption in Chinas bulk chemicals industry, 201240 ........................................................... 123Figure 7-12. Non-OECD Asia (excluding China and India) industrial sector delivered energy consumption

by energy source, 201240 ............................................................................................................................................... 123Figure 7-13. Electricity shares of industrial sector energy demand in China, the Philippines and the OECD, 19752012 ........... 124Figure 7-14. Industrial sector electricity demand in China by industry type, 19712012 .................................................................. 125Figure 7-15. Industrial sector electricity demand in the Philippines by industry type, 19712012 ................................................... 125

Transportation sector energy consumption ................................................................................................................................................ 127Figure 8-1. Delivered transportation energy consumption by country grouping, 201240 ................................................................ 127Figure 8-2. World transportation sector delivered energy consumption by energy source, 201040 .............................................. 127Figure 8-3. Annual average growth in delivered transportation energy consumption by OECD region, 201240 .......................... 128Figure 8-4. Average annual growth in delivered transportation energy consumption by non-OECD region, 201240 .................. 129Figure 8-5. World transportation sector delivered energy consumption by passenger modes, 2012 and 2040 ............................. 130Figure 8-6. World transportation sector delivered energy consumption by freight modes, 2012 and 2040..................................... 130Figure 8-7. Change in OECD and non-OECD delivered transportation energy consumption by passenger mode, 201240 ....... 130Figure 8-8. World transportation energy consumption by mode, 2012 ............................................................................................... 131Figure 8-9. Transportation energy consumption by mode in selected countries and regions, 2012 ................................................ 131Figure 8-10. World passenger jet aircraft stocks by region and type, 2013 ....................................................................................... 132Figure 8-11. Gross domestic product and aircraft stock per capita by region, 2013 .......................................................................... 133

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Figure 8-12. Change in OECD and non-OECD delivered transportation energy consumption by freight mode, 201240 ............ 133Figure 8-13. GDP per capita in selected regions and countries, 201240 ......................................................................................... 133Figure 8-14. Passenger travel per capita in selected regions and countries, 201240 ..................................................................... 134Figure 8-15. Light-duty vehicles per thousand people in selected regions and countries, 201240 ................................................ 134Figure 8-16. OECD and non-OECD passenger travel by selected travel modes, 201240 ............................................................. 134Figure 8-17. World air passenger travel by region, 2013 ..................................................................................................................... 135Figure 8-18. World domestic and international air passenger travel by region, 2013 ....................................................................... 136Figure 8-19. OECD and non-OECD gross domestic product per capita and air passenger travel per capita by region, 2013 ..... 136Figure 8-20. OECD and non-OECD industrial gross output per capita, excluding service industries, 201240 ............................. 137Figure 8-21. OECD and non-OECD freight movement per capita by truck, rail, and domestic marine vessels, 201040............. 137

Energy-related CO2 emissions ...................................................................................................................................................................... 139Figure 9-1. OECD and non-OECD energy-related carbon dioxide emissions, 19902040 .............................................................. 139Figure 9-2. Carbon dioxide emissions from energy consumption in the United States and China, 19902012 ............................. 140Figure 9-3. World energy-related carbon dioxide emissions by fuel type, 19902040 ...................................................................... 141Figure 9-4. OECD and non-OECD energy-related carbon dioxide emissions by fuel type, 19902040 .......................................... 141Figure 9-5. Average annual growth of energy-related carbon dioxide emissions in OECD economies

with and without the U.S. Clean Power Plan (CPP), 201240 ......................................................................................... 144Figure 9-6. Average annual growth of energy-related carbon dioxide emissions in non-OECD economies, 201240 .................. 144Figure 9-7. Increases in carbon dioxide emissions by fuel type in non-OECD regions with the highest absolute

emissions growth, 201240................................................................................................................................................. 144Figure 9-8. U.S. electricity generation by primary fuel in the AEO2015 Reference case, 19902040,

and incremental energy savings in the AEO2015 Base Policy case, 19902040 .......................................................... 145Figure 9-9. OECD and non-OECD carbon intensity of energy supply, 19902040 ........................................................................... 148Figure 9-11. OECD and non-OECD carbon intensity of economic output, 19902040 ..................................................................... 148Figure 9-10. OECD and non-OECD energy intensity, 19902040 ...................................................................................................... 148

Regional definitions ................................................................................................................................