What Drives Demand?
As the following figures illustrate, worldwide energy demand has doubled over the last thirty years. This change in energy demand has largely be driven by countries outside of the OECD, especially large developing nations, but moderate levels of growth among OECD countries (often referred to as “developed” economies) have also contributed. Factors responsible for this dynamic include:
- In "developed" countries tougher fuel efficiency (e.g. CAFÉ) standards, slower population growth, and a shift in energy requirements from energy intensive industries to service industries have tempered demand.
- In "developing" countries rapid population and Gross Domestic Product (GDP) growth and industrial expansion have led to increased overall energy demand.
Regional Shares of Actual Total Energy Consumption* (1973 and 2005)
Regional Shares Of Actual Total Energy Consumption* (1973 and 2005)
|
1973 |
2005 |
| OECD |
60.5% |
48.7% |
| Middle East |
0.9% |
4.2% |
| Former USSR |
12.5% |
7.9% |
| Non-OECD Europe |
1.5% |
0.9% |
| China |
7.9% |
14.2% |
| Asia (exludes China) |
6.4% |
11.3% |
| Latin America |
3.7% |
5.0% |
| Africa |
4.1% |
5.6% |
| World Marine Bunkers |
2.5% |
2.2% |
| Total Mtoe |
4,700 |
7.912 |
Energy consumption falls into three broad categories: energy for power generation, energy for heat and energy for transportation. The following chart outlines the major types of energy used in the world economy.
Major Energy Used Within the World Economy
| Sector of the Economy |
Main Types of Energy Used |
Share of Energy Used (2006) |
| Transportation |
Gasoline (petroleum) for cars, motorcycles and light trucks
Diesel (petroleum) for heavier trucks, buses and trains
Jet fuel (petroleum) for airplanes
|
39% |
| Industry & Manufacturing |
Natural gas for boiler fuel and process heat
Electricity for power
Coal for boiler fuel
|
35% |
| Residential Buildings |
Natural gas for space heating
Electricity for lighting, appliances, refrigeration and some types of heating and cooling
|
15% |
| Commercial Buildings |
Electricity for lighting
Natural gas for space heating
|
11% |
Today, consumers (versus industrial users) are responsible for a majority of global energy demand; the largest consumer uses of energy include road transportation, residential heating and lighting, and commercial building (such as office space) heating and cooling.
Consumer demand is greatest in the United States, currently the world’s largest overall energy consumer, although consumption continues to grow at a substantial pace in China, India and other rapidly developing economies. In terms of industrial users, China’s large and growing industrial base requires substantial energy that is predominantly supplied by coal.
Energy intensity – the ratio of energy used to GDP – is a measure that indicates the total energy being used to support economic and social activity. While the United States is the largest consumer of energy, it is not the most energy intense economy. When thinking about how to temper energy demand while supporting ongoing GDP growth, it will be necessary to look towards countries that have found ways to use energy less intensely – that is, more efficiently – to fuel their economic growth. For example, as a result of Japan’s strict government energy efficiency standards (its gas- and coal-fired power plants are 70 percent more energy productive than Russian ones), the country is able to support its economy with relatively lower energy consumption. Changes in energy intensity could have dramatic impacts on energy consumption among developing countries.