Beltway Journal: EIA’s International Energy Outlook 2018

Global energy and electricity markets and their geopolitical and environmental implications, in this day and age, have grown to be a central tenet within the domestic and international political dialogue. Why? Because as the world’s population grows, so does their demand for electricity – especially in a time where the day to day functioning our global economy is absolutely reliant on electricity. But this is merely a self-evident observation.

These facts, while pretty much universally true, alter depending on where you are in the world. For instance, the energy and electricity case is different in China, India or Africa – three rapidly evolving regional economies – as compared to say the United States or Russia.

And that’s precisely why the U.S. Energy Information Administration (EIA) has paid particularly close attention to these three regions in their supplement to the International Energy Outlook 2018 (IEO2017), called the International Energy Outlook 2018 (IEO2018), which was released earlier today.

Hosted by the CSIS Energy & National Security Program, the Administrator of the EIA, Dr. Linda Capuano, today presented the report’s key findings and fielded questions regarding their implications. Though unlike many other think-tank panels, today’s discussion was really a “reevaluation” of the EIA’s previously collected data and its related forecast model from the IEO2017. Though, this reevaluation was solicited by the economic uncertainty, and therefore the regional energy and electricity uncertainty, of Africa, India and China.

The model’s dominant variable was the current and projected GDP of the areas in question, and it was primarily on this premise that the following key observations were made in the report, which you can find here.

But what I found more interesting, and more important for the purpose of the Beltway Journal, was the opinions of the panelists.

Africa: Compared to the other two regions, the African continent accounts for a much smaller share of total global energy consumption. The relatively weak manufacturing sector accounts for lower levels of industrial energy use, not to mention Africa’s less developed infrastructure. Though what stuck with me was the plain delivery of the projections by Dr. Todd Moss, a senior fellow at the Center for Global Development. According to him, “there is no such thing as a rich country that doesn’t consume a lot of electricity per capita,” and that it’s difficult to increase a nation’s per-capita wealth without increasing a nation’s per-capita electricity access and consumption.

China: In sum, the report’s China analysis emphasized the unpredictability of the nation’s rate of transition from a mostly manufacturing-based economy to a service-based economy, since industry end-use accounts for a great deal of its energy consumption. Though Mr. Edward Chow, a senior fellow in the Energy & National Security Program at CSIS, downplayed the importance of this metric. Rather, he was interested in the origin and source to electrify China’s economy in the future. Alluding to problems with overconsumption of carbon-heavy fuels, Mr. Chow hopes that China may be able to transition to natural gas and renewables more quickly – though exactly how that may be achieved has yet to be seen.

India: In India, as is the case in China, the industrial sector accounts for the largest share of energy-consuming end-use in the country. What is more interesting is that unlike in China or Africa, the report concluded that a scenario where India’s economy grows as a result of expanded exports would lead to the greatest increase in energy consumption. Dr. Anvita Arora, though, emphasized the importance of the Indian government’s ability to play a more central and effective role in the growth of India’s economy, which is historically informal. How can this be accomplished? One idea offered was the acceleration of India’s adoption of new and clean technologies in all industry sectors.