The Key Energy Sources

The diagram below depicts the world’s marketed energy by type.

Crude oil consumption continues to rise, though its share in the world marketed energy sources is on the decline. In 2000, global crude oil consumption accounted for 39 percent of world marketed energy source at 155.9 quadrillion British Thermal Unit (Btu). By 2010, the share of crude oil in world marketed energy source is likely to fall to 36 percent or 185 quadrillion Btu.

The period depicted above shows that the overall demand for energy has grown at a CAGR of 2%. Nuclear energy has been the fastest growing segment growing at 4.6% CAGR (starting from a much smaller base), while crude oil has been the slowest growing segment growing at 1.2% CAGR(albeit from a very high base). Natural Gas and coal have grown at 2.7% CAGR and 2.1% CAGR respectively. Consequently, the share of crude oil in the energy basket has dropped from 46.6% to 36.4% over the 30-year period. It is interesting to note that the share of coal has remained virtually unchanged in the energy basket, over 30 years.

The trends suggest that while the share of crude oil will continue to decline, it will remain the most important energy source for the next few decades at least.

The following charts, based on the past data of over 30 years illustrate the trend further.

Source: OECD Factbook

The energy mix has changed significantly between 1971 and 2003. Nuclear energy, which experienced an annual average growth of 10% since 1971, increased its share of production from 0.5% to 6.4%. Renewable energy also experienced a high growth rate over the 32 years, but its share was very low in 1971, making this growth less meaningful. The share of natural gas in total production increased from 16.0% in 1971 to 21.0% in 2003, and the share of oil has fallen from 44.9% to 35.3%. The share of coal production remained at around 25%.