World Energy Outlook 2006

Impact of Higher Energy Prices on Demand
Energy Demand Trends since Prices Started Rising
Global primary energy demand 6 grew rapidly between 2000 and 2004,
averaging 2.7% per year (Table 11.2). 7 Demand grew by only 1.3% on average
in the 1990s. Demand grew about six times faster in non-OECD countries
than in the OECD. In developing Asia it grew faster than in any other major
world region. In most regions, demand growth slowed in 2001 and then
accelerated in 2002 and 2003, with the 4.6% increase in global energy demand
in 2004 representing the fastest rate since 1976. Much of the growth came
from China and other developing countries. Partial data suggest that energy
demand growth may have slowed in 2005, partly in response to higher prices.
Global oil demand has grown on average more slowly than energy demand in total
since 2000. The cumulative increase in global oil use between 2000 and 2004 was
8%, compared to 11% for energy demand as a whole. On average, oil demand
grew by 1.8% per year in the five years to 2005, the same rate as during the second
half of the 1990s (Figure 11.8). Developing Asian countries accounted for 46% of
the total increase in oil demand between 2000 and 2005, with 29% coming from
China alone. China and North America together contributed more than half of the
exceptional increase of more than 3 mb/d, or 4%, in 2004 – the fastest rate of
increase since 1977. Other non-OECD regions have contributed most of the rest
of the increase in oil demand since 2000, especially in 2004 and 2005.
Other fuels have followed markedly different trends. Globally, primary demand
for gas has grown strongly, averaging 2.4% per year since 2000. It surged in
2003, by almost 100 billion cubic metres – despite weaker North American
demand – and continued to grow strongly in 2004 and 2005, contributing to
the overall strength of energy prices (Figure 11.9). North American gas demand
fluctuated between 2000 and 2005. European demand grew without pause, but
at varying rates. Demand in non-OECD regions, including developing Asia,
grew steadily at an average rate of more than 4% between 2000 and 2005. On
average, non-OECD regions accounted for more than 80% of the total increase
in global gas demand between 2000 and 2005.
World coal use has followed a more erratic path. It rose strongly in the three
years to 2004, driven mainly by a surge in demand for power generation in
China and the rest of developing Asia. World demand surged by 7% in 2003
and 9% in 2004. In 2001, coal use fell slightly. Chinese coal demand grew by
about 20% in both 2003 and 2004. World electricity consumption grew at just
over 3% per year over 2000-2004.
6. Demand and consumption are used interchangeably throughout this chapter and the rest of the
Outlook.
7. We do not have a complete picture of energy demand beyond 2004 because of data gaps. Preliminary
data on aggregate demand in some large countries are available for 2005, notably for oil and gas.
282 World Energy Outlook 2006 - FOCUS ON KEY TOPICS
© OECD/IEA, 2007