Energy supply

• Oil remains the largest source of primary energy, as it is essential for commercial transportation and chemicals.
• Natural gas demand rises, largely to help meet increasing needs for electricity and lower-emission industrial heat.
• Most lower-emission energy sources, including nuclear, wind/solar, and biofuels, increase at the fastest pace.
• Coal is still prominent in some non-OECD countries, although global consumption appears to have peaked in 2014.

• The energy mix will vary by sector to meet rising demand while addressing environmental impacts.
• Oil remains essential for transportation, as growing commercial transportation still relies on liquid fuels to meet more than 80% of demand.
• With a drive for cleaner and more efficient operations, the industrial sector relies primarily on electricity and natural gas for growth. Industrial oil demand grows as a feedstock for chemicals, asphalt, lubricants and other specialty products.
• Electricity demand rises in all end-use sectors. The mix of fuel supply to generate electricity shifts to lower-emission sources.

• Global liquids demand growth is concentrated in developing nations. Asia Pacific will account for about two-thirds of global growth by 2050.
• Efficiency gains and fuel switching in Europe reduce liquids demand by 35% from 2021 to 2050, led by a reduction of 80% in light-duty vehicle liquids demand.
• Chemicals and commercial transportation account for almost all of the liquids demand growth, with chemicals expected to double from 2021 to 2050 and commercial transportation to increase by 40%.

Liquids

Liquids are projected to remain the world’s leading energy source in 2050, even as demand growth slows beyond 2025.

Commercial transportation and chemicals – sectors where liquid fuels are favored for their high energy density and distinctive chemical properties – drive liquids demand growth. Overall, demand for liquids is expected to rise by about 15 million barrels per day by 2050. Almost all the growth will come from the emerging markets of Asia, Africa, the Middle East and Latin America.

New investments in oil production – and in technologies to improve recoverability, enhance efficiency and reduce cost – are needed to offset natural production decline and meet rising demand. Much of the growth in liquids production is expected to be from sources of supply that have been unlocked by technology advances in the past two decades: North American tight oil and the natural gas liquids associated with unconventional oil and gas production, and deepwater projects offshore Brazil and Guyana, for example.

Continued investment in conventional crude and condensate will also be needed. The Middle East and Russia/Caspian remain significant oil producers.

• The natural decline rate of existing oil production is 7% per year. Significant investment is needed to offset this decline and meet the projected demand growth.
• In 2021, conventional crude and condensate made up about two-thirds of the liquid supply. By 2050, new investment is expected to have diversified oil supply such that only about half of liquids will come from these conventional sources.
• Tight oil is also rich in natural gas liquids, so tight oil growth brings significant new supplies of NGLs.
• Biofuels more than quadruple, with increasing demand for lower-emission liquid fuels and technology advancements that reduce costs and land use.
• North America tight oil and associated NGLs production increases by about a third from 2021 to 2030. This significant growth solidifies North America as a net exporter of liquids.
• The Middle East continues to invest in conventional oil production to maintain their role as leading exporters, which account for about 70% of their production in 2050.
• Asia Pacific remains the largest and fastest-growing region for liquids demand, and increasingly relies on imports.
• Biofuels production grows across all continents to about 9 million barrels per day of oil equivalent in 2050 to address emissions from hard-to-abate end use.

Natural gas

Natural gas plays a vital role in satisfying the energy needs of consumers worldwide while helping to mitigate the risks of climate change.

Choosing natural gas as a lower-carbon alternative to coal improves air quality and reduces carbon intensity.

Natural gas is abundant and versatile. It is a reliable and flexible fuel for electricity generation and a lower-carbon industrial fuel. It’s also convenient for home use.

Natural gas resources are geographically and geologically diverse. North America’s unconventional gas resources are produced by applying horizontal drilling and hydraulic fracturing technologies. The Middle East and Africa are expected to tap large conventional natural gas resources. Natural gas production is expected to grow in every region except Europe and Russian Caspian.

Natural gas trade is a critical link between resource-rich regions and demand centers in Asia Pacific and Europe. New liquefied natural gas export projects are expected to diversify the market and meet about 50% of the growth in natural gas demand to 2050.

• Natural gas is well suited for homes, businesses and electric utilities seeking versatile, lower carbon energy.
• Abundant and convenient, on an absolute basis natural gas grows more than any other single source of primary energy during the Outlook period.
• About half of the growth in natural gas demand is for electricity generation, and 40% is for industrial use.
• Residential users rely on natural gas for heating and cooking.
• Increased penetration of natural gas-fueled buses and trucks can help urban areas manage air quality.

• Natural gas rises in prominence as a cleaner-burning alternative to coal over the Outlook period.
• In China and other developing nations in the Asia Pacific region, natural gas demand doubles from 2021 to 2050. Coal still plays a significant role in the region.
• Coal demand grows by a third in developing Asia Pacific countries outside China, partially offsetting major strides to reduce the use of coal in developed countries and China.
• Outside of Asia Pacific, many developing countries are expected to leverage domestic natural gas supplies to meet rising electricity demand and fuel industrial growth.
• In 2050, coal is expected to meet about 13% of global energy demand and produce 26% of energy-related CO₂ emissions.
• With the same boiler efficiency, burning natural gas to produce heat emits about 40% less CO₂ than burning coal.
• Choosing flexible, highly efficient gas-fired electricity generation to replace older, inefficient coal plants can reduce CO₂ emissions by up to 60% while producing fewer air pollutants.
• Every 1% of global primary energy shifted from coal to natural gas can reduce energy-related CO₂ emissions by almost 1% in 2050.

• North America’s abundant unconventional natural gas is expected to feed new LNG projects and meet growing local demand.
• Africa’s natural gas production could drive economic growth and prosperity, as demand and exports are poised to accelerate, led by Mozambique, Nigeria, Algeria and Egypt.
• The Middle East is expected to continue investing in LNG export projects, more than doubling their export capacity by 2050.
• Europe is likely to continue to rely on natural gas trade to meet consumer demand as local production declines.
• In 2021, Asia Pacific’s LNG imports were larger than all other regions’ combined; around 2030, the region’s total natural gas demand will likely surpass North America’s; and in 2050, LNG trade is expected to meet about half of Asia Pacific’s natural gas demand.

• In 2021, LNG trade met about 10% of global natural gas demand. By 2050, LNG trade will meet nearly 20% of the world’s natural gas needs.
• Asia Pacific absorbs about 90% of the growth in LNG from 2021 to 2050, helping the region to reduce its carbon intensity while sustaining economic growth.
• China’s ‘war on smog’ and ‘blue-sky’ policies have led to measurable improvements in urban air quality while boosting demand for LNG imports.
• India and other Asia Pacific importers are expected to look to LNG to supplement domestic natural gas production, often leveraging existing natural gas infrastructure.
• Europe is expected to tap competitive LNG to diversify its natural gas import portfolio.
• In 2021, about 70% of LNG exports originated in Asia Pacific, the Middle East or Africa.
• North America’s LNG exports are projected to grow as low-cost unconventional gas production prompts investment.
• East Africa, Qatar and Russia projects are expected to expand and diversify LNG exports.
• The LNG market is expected to remain highly competitive due to abundant natural gas resources and many aspiring exporters.
• The diversity and reliability of LNG supplies, combined with the flexibility to ship it where it is needed, make LNG a favorable choice for nations needing dependable, lower-emission energy sources to foster economic growth.

• With oil and natural gas a key part of the future energy mix across all of the assessed 2°C scenarios and the IEA NZE scenario, it is important to consider the investments needed to meet society’s demand.
• Without continued investment to sustain existing fields and develop new ones, the supply of oil and natural gas declines. The estimated natural decline rate is 7% per year and 5% for natural gas.
• As shown in the charts, these decline rates create a significant need for continuous investment just to sustain 2021 production levels. The natural rate of decline for oil and gas far exceed the range of demand projections out to 2050. Ceasing to invest in either oil or gas could cause supplies to fall well short of demand, both for the near term and in the broad range of scenarios.