Navigant forecasts global road transportation energy consumption to increase 25% by 2035; 84% from conventional fuels

28 July 2014

In a new report (Transportation Forecast: Global Fuel Consumption), Navigant Research forecasts total road transportation energy consumption will grow from 81.1 quadrillion Btu in 2014 to 101.7 quadrillion Btu in 2035—an increase of 25.4%. Approximately 84% of that will be provided by conventional fuels. The United States is currently the largest consumer of energy in the road transportation sector, with nearly 23.1 quadrillion Btu projected to be consumed in 2014.

Navigant also projects that investments in alternative fuel and fuel efficiency improvements will reduce annual energy consumption in the United States year-over-year. Most developed countries in Western Europe and parts of Asia Pacific will also exhibit similar decreases in energy consumption. In contrast, energy consumption will grow in developing regions, particularly in Eastern Europe, Asia Pacific, Latin America, and the Middle East & Africa. Brazil, Russia, India, and China (the BRIC nations) will represent the largest increases, as the percentage of global road transportation energy consumed by these nations is forecast to grow from 20% in 2014 to 36% in 2035.

 Annual road transportation sector energy consumption by fuel type, world markets: 2015-2035. Source: Navigant Research. Click to enlarge.

Conventional fuels (e.g., gasoline and diesel) represent the bulk of energy consumption throughout the forecast period. However, Navigant foresees that the consumption of gasoline will slowly decrease as alternatives and diesel become more popular in light-duty vehicle (LDV) segments.

The alternative fuels market share will grow from roughly 7.4% of global consumption in 2014 to more than 16.4% by 2035. Biofuels will represent the largest portion of alternative fuels market penetration, representing over 8.4% of global road transportation sector consumption by 2035. Electricity and hydrogen will together account for less than 0.5% of total energy consumption by 2035. The relatively marginal use of these fuels is a function of the significant energy efficiency gains of electric and hydrogen-powered vehicles over conventional ICE-powered vehicles.

Markets for both vehicles and fuels have gradually begun to respond to these government programs, and alternative fuels are beginning to have an impact on global oil demand. The shape and form of road transportation alternative fuels markets vary greatly by region, largely influenced by government regulations, local resources, infrastructure, and fuel prices. For instance, markets for liquefied petroleum gas (LPG) are particularly strong in Eastern Europe, Turkey, and South Korea, but relatively small elsewhere. Similarly, ethanol has done well in the United States and Brazil, but expansion into other countries has been slow. As such, no one alternative fuel has been pinpointed as a globally preferred solution.

The most impactful fuel savings strategy is likely to come from fuel efficiency improvements in the conventional vehicle platform and the internal combustion engine (ICE). To meet the increased fuel economy requirements for new vehicles, automakers have made major investments in engine downsizing, vehicle lightweighting, and vehicle electrification. Fuel efficiency improvements are relatively easily integrated into mass-market vehicles. Relatively modest incremental fuel economy improvements of 2 mpg to 3 mpg per vehicle can have significant impacts on global oil demand.

—“Transportation Forecast: Global Fuel Consumption”

The fuels forecast builds on previous reports that assess the markets for LDVs and medium- and heavy-duty vehicles (MHDVs).

The problems have been inefficient ICEVs and cheap fossil liquid fuels.

Both of the above can be solved with 100 mpg ICEVs and $10+/gal liquid fuel. The hundred of$BB from progressive increased fuel taxes could support the switch form ICEVs to BEVs/FCEVs during the next 40 years or so.

0Of course a progressive carbon tax (up to $110/ton) would have to be proportionally applied on every KW produced from CPPs and NGPPs This is a 'business as usual prediction. It ignores the likely move to electricity powered personal transportation. "Electricity and hydrogen will together account for less than 0.5% of total energy consumption by 2035." We seem to be on route to sub$30k, 200 mile range EVs prior to 2020. Production volume alone should force those prices into the mid $20k range which would mean a massive market shift away from ICEVs well before 2030. In the US about 50% of all driving is done with cars five years old or newer. US cars, alone, should create far more than a 0.5% energy shift. As much as I like EVs, the sales rate is 0.3% which might go up to 1% in a decade. This is why I recommend synthetic and bio synthetic liquid hydrocarbon fuels. No oil used, cleaner, reduces OPEC's power by using domestic resources. We have more than 1 billion road vehicles in the world that have engines. It is unlikely to convert many of those to electric in the next 20 years...this should be obvious. SJC, do you understand exponential growth? It seems you extrapolate linearly, just like all forecasters do. They just don't get the concept of exponential growth. Global sales of plugin vehicles was 0.3% in 2013, double that of 2012. 2014 will also see strong growth, with Volkswagen entering the game. Plugin vehicles will be 1% of sales in a few years, say 2017 or 2018, beating the Navigant forecast by almost 2 decades. How can they be so blind? They just stare at their computer screen, filled with Excel spreadsheets and their 'models' and forget to look out the window to see what is happing in the real world. Ivory tower syndrome at its finest. This study is projecting modest growth in petroleum consumption year over year; it affirms my prediction that the price of oil will collapse soon. Can't tell when but its coming. @nordic: Lundburg says that US gas prices at the pump dropped$.10 over the past two weeks because of refiners chasing sales, while oil prices remain high. That suggests to me that we are starting to use less oil -- maybe due to BEV's but more likely due to more efficient ICEV's. No data to support that yet, but a possible indicator.

Arne,

I understand exponential growth, that still does not get us 100 million EVs in the world by 2035. Look at hybrids, the sales have grown but not taken over in 15 years. I said EVs being 1% of sales in 10 years, NOT PHEV.

The idea is we will use alternatives, but not enough to affect the oil industry. Oil will be more difficult to get, cost more and might not be available in the quantities we want in some cases.

Synthetic fuels use coal, natural gas and biomass, they can even use sequestered CO2 and wind/solar/geothermal created hydrogen. These are domestic resources, OPEC, Russia, nor anyone else can dictate.

"At issue is a tanker, the United Kalavrvta, that arrived off the coast of Texas over the weekend. The vessel is carrying about 1 million barrels of crude oil from the Kurdistan region of Iraq. Authorities in Baghdad say that oil, worth over \$100 million, is being sold without the permission of the Iraqi government."

http://www.cbsnews.com/news/iraq-challenges-shipment-of-kurdistan-oil-to-texas/

We may see more of this in the coming years from ISIS, the Kurds, some groups in Russia or elsewhere. I don't want to pin this nation's future to that kind of uncertainty.

Agree with Bob Wallace.  Tesla alone will soon have the capacity to make half a million or more EV battery packs per year.  Half a million EVs is 3% of the US LDV market, from just one company.

Then there's the PHEV market.  I'm proof that you can drive for weeks without burning gasoline if charging is readily available.  If the average PHEV gets at 10 kWh battery pack, one Gigafactory could supply 5 million vehicles per year—roughly a third of US LDV sales.  Knock off 70-80% of that fuel consumption and you make a significant dent in petroleum sales.

We are at the leading edge of a wave.

Agree, SJC. SYNTHETIC fuels from waste biomass and renewable H2 must be pushed in parallel with the push for EV's. Cannot put all eggs in one basket.

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