The FINANCIAL -- Statoil launches its annual outlook for global economics and energy markets – Energy Perspectives 2012.

It foresees significant progress for energy efficiency, but global energy demand is still expected to increase by more than 40 per cent towards 2040. Fossil fuels account for the majority of the increase. Even faster growth is projected for in nuclear and renewables, reflecting a steady greening of the energy mix. Statoil emphasises the uncertainty connected with any long-term outlook, but points to the connection between energy and economic growth.

"Our assessment suggests that global growth will continue at an average of 2.8 per cent per year over the coming three decades. This is close to the average of the previous 30 years, even though we expect a gradual slowdown in growth towards 2040," says Statoil chief economist Klaus Mohn.

According to the outlook, the future expansion in global energy demand will be significantly slower than for economic activity, with an average annual growth of only 1.1% (from 13 bn toe in 2010 to 18 bn toe by 2040).

"Demand will increase for all types of energy. At the same time, we expect continued progress for energy efficiency, amounting to a 40 per cent reduction in energy use per dollar of real GDP," says Mohn.Global oil demand is expected to reach a plateau by 2030:  "Following steady annual growth around 1.0 mbd, global oil demand is expected to slow down during the 2020s, before it levels out just above 100 mbd around 2030," says chief analyst Eirik Wærness. This is due to slowing economic growth, rising energy efficiency and further penetration of electricity and gas.

According to Statoil, natural gas is seen as a fuel of the future: "Global gas demand is projected to increase by 60 per cent by 2040. Positive drivers include significant new available supply at moderate costs and environmental policies," says Wærness. Natural gas is the cleanest fossil fuel, and Statoil believes that natural gas will serve as an important and cost-efficient means to meet the challenge of global warming.

In aggregate, the fossil fuel share of the global energy mix is expected to drop from 81 per cent in 2010 to 73 per cent in 2040: "In OECD Europe, renewables is expected to more than double towards 2040, and becoming the second most important fuel with a 24 per cent share of the energy mix in the region," says Wærness. This development is driven by climate and environmental policies, energy security concerns, as well as price and cost developments."Reduction in global CO2 emissions are possible if governments could agree on sufficiently tough coordinated policy measures."

Global CO2 emissions increased by an annual average of 1.8% between 1990 and 2009; totaling around 30 billion tons per year in 2009."Given the outlook for economic growth, current trends in energy and climate policies and the stickiness of energy-consuming capital equipment, energy-related CO2 emissions are projected to continue increasing until about 2030. From 2030, we expect lower energy demand growth, increased share of renewables and the effects of carbon capture and storage (CCS) to deliver lower emissions going forward," says Wærness.

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