Recently, I came home to find the latest issue of The Economist in my mailbox. As it turns out, this issue was the special “World in 2012” edition, which focuses exclusively on trends to expect in the coming year. As I flipped through the articles profiling different political, economic and cultural trends by country and global region, I stopped on one detailing what’s to come in the energy industry. I found it interesting, and thought you might too. As such, here are the findings from The Economist (and my associated musings…):
- Global energy consumption will grow by 3% in 2012, actually a bit faster than 2011. (Hmm. Does that mean increased economic activity and/or population growth? It likely has to do with the BRIC countries. See trend #4.)
- Growth in oil supply will outpace demand because of the recovery of Libyan production and expanding Iraqi output. (Libyan politics turned upside down in 2011, so I wonder how the reconstruction of their state will impact their role in OPEC.)
- Benchmark Brent crude will average $90/barrel, down from $110 in 2011. (Summit’s energy risk management team has a take on this one.)
- China and India remain keen on coal, so the consumption of coal will be above petroleum products in the global energy mix. (Despite the greenhouse gas emissions that result from coal, it remains one of the most cost-competitive fuels and, as such, will stick around.)
- Natural gas will continue its climb in supply, given continued emphasis on shale gas exploration. Moreover, the location of the biggest shale reserves – China, U.S., Argentina, Mexico and South Africa top the list – promises to upset the traditional geopolitics of energy supply. (Oh, how different the world of natural gas consulting would be if the natural gas market were global, like crude.)
- China’s nuclear program will resume with force. While China put the construction of its nuclear reactors on hold in 2011 because of Japan’s nuclear crisis, work will resume in 2012. According to The Economist, developers are looking to meet the government’s plan to bring 70 gigawatts of nuclear capacity to China by 2020, a seven-fold increase from 2012. (Yet another way in which The Middle Kingdom differs from Germany.)
Anything else you’d add to the list?