updated 6/20/2006 11:47:45 AM ET 2006-06-20T15:47:45

Oil’s share of world energy demand will decline over the next quarter century, the Energy Department said Tuesday, as high prices spur greater use of alternatives such as coal, natural gas and renewable fuels.

“High prices do matter,” said Guy Caruso, administrator of the Energy Information Administration, a division of the Energy Department that released its annual international energy outlook.

In December, the EIA predicted worldwide oil prices would average $57 a barrel in 2030, a 35 percent increase from the long-term forecast it had made just a year earlier.

In 2003, oil accounted for 38 percent of total world energy consumption, but by 2030 that figure will drop to 33 percent, Caruso said.

Over that same period, coal’s share will rise to 27 percent, up from 24 percent; natural gas will make up 26 percent of consumption, up from 24 percent; renewable fuels like biodiesel and ethanol will rise to 9 percent of total world energy demand, up from 8 percent.

Still, world oil demand will rise to 118 million barrels a day by 2030, up from about 85 million barrels a day now, with more than half of the growth coming from the United States, China and India, according to the EIA’s forecast, which assumes no major changes to existing energy policies and regulations.

“It’s not so much the specific numbers. It’s the trends we feel very confident in,” Caruso explained.

Caruso said there were three “above-ground” factors driving tighter supplies and, thus, higher prices:

  • Oil-producing countries are not investing enough to maintain a comfortable level of surplus production capacity.
  • Regulatory “impediments” that include restrictions against drilling in the Alaska National Wildlife Refuge and off the coasts of the United States.
  • The rising costs of doing business.

To meet the world’s rising appetite for fossil fuels the energy industry will increasingly rely on so-called unconventional resources, such as oil sands and converting coal and natural-gas to diesel and other liquids, the EIA forecast. Global unconventional production will climb to 11.5 million barrels per day in 2030, up from current levels of about 1.8 million barrels per day.

The oil supply coming from countries outside of the Organization of Petroleum Exporting Countries is expected to rise by almost 24 million barrels per day by 2030. That is 62 percent more growth than is anticipated from OPEC.

Total world energy demand will rise by 71 percent to 722 quadrillion British thermal units by 2030, Caruso said, with the most robust growth coming from developing nations in Asia, the Middle East and Latin America.

The rapidly growing demand for coal and natural gas is being driven by growth in the power and industrial sectors, he said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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