Nov. 10 (Bloomberg) -- The International Energy Agency cut its long-term forecast for global oil demand as the economic crisis saps consumption in developed economies and environmental policies encourage alternative energy use.

Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million barrels a day in 2008, the adviser to 28 nations said today in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day. Consumption may rise by as little as 0.2 percent a year if additional climate change policies are adopted, it said.

“The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets,” the Paris-based agency said in its executive summary of the report. “World energy demand in aggregate has already plunged with the economic contraction.”

Governments have urged consumers to reduce energy consumption to lower carbon emissions and cut dependence on imported fuel. U.S. President Barack Obama last month announced $3.4 billion in grants to boost the efficiency of the country’s power-transmission network. As demand growth slows, the world may still face a supply crunch and surging prices as the recession crimps investment in new projects, the agency said.

Status Quo

The IEA’s forecasts are based on its “reference scenario,” which assumes that governments make no changes to their existing energy policies and measures. The adviser also has a “450 scenario,” whereby world leaders collectively act to reduce the concentration of carbon dioxide and other greenhouse gases in the atmosphere to 450 parts per million.

Oil demand would be limited to 89 million barrels a day by 2030 under this scenario, an increase of 0.2 percent a year, as the U.S., Europe and Japan import less fuel and consumption by developed economies slows, the IEA said. That demand is 15 percent lower than the IEA estimates in its reference scenario.

The IEA cut its five-year forecasts for global crude consumption in June, citing the economic slowdown. Demand won’t return to levels seen last year, when prices soared to $147.27, until 2012, the agency said at the time.

New Treaty

Existing climate-change legislation will also slow long- term crude oil demand under the reference scenario, the IEA said. The United Nations will host delegates from 192 nations in Copenhagen next month to seek a new treaty on emission reductions for industrialized and developing economies.

All the growth in oil demand through 2030 will come from developing economies, according to the IEA report. Consumption in the developed countries of the Organization for Economic Cooperation and Development is forecast to shrink in the period.

The IEA also reduced its estimate for global energy demand in 2030 to 16,800 million tons of oil equivalent from a previous forecast of 17,010 million tons. The agency sees consumption rising 40 percent from 2007 to 2030, or 1.5 percent a year. Last year, it had estimated that demand would rise 45 percent from 2006 to 2030, or 1.6 percent a year.

Global oil consumption is likely to average 86.1 million barrels a day in 2010, the IEA said in an Oct. 9 monthly report, raising next year’s forecast for a third consecutive month. The agency expects demand of 84.6 million barrels a day this year. The IEA’s next monthly report will be issued on Nov. 12.

It will be up to members of the Organization of Petroleum Exporting Countries to satisfy the bulk of the world’s increasing need for oil as conventional production in countries outside the group peaks next year, the IEA said.

Focus on OPEC

“Most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources,” the agency said in the report.

OPEC’s oil production is expected to increase 1.8 percent a year through 2030 to 53.8 million barrels a day, the IEA said. The group’s share of global oil output is forecast to rise to 52 percent from 44 percent in 2008, the agency said.

Non-OPEC oil production, including condensates, natural gas liquids and non-conventional oil, will rise 0.2 percent a year to 49.2 million barrels a day by 2030. Crude oil production from outside the group will drop by 0.5 percent a year, it estimates.

As well as sapping consumption, the global recession has crimped investment in new energy projects, potentially leading to a supply crunch and surging prices “a few years down the line,” the IEA said.

Reduced Spending

“In the oil and gas sector, most companies have announced cutbacks in capital spending, as well as project delays and cancellations, mainly as a result of lower cash flow,” according to the report. “Oil sands projects in Canada account for the bulk of the suspended oil capacity.”

Global investment in oil and gas production has slumped 19 percent this year compared with 2008, a reduction of more than $90 billion, according to the IEA’s estimates.

Total SA, the biggest French oil company, said in September it may delay decisions on investment depending on terms offered by oil-service companies, which are hired to help with field development. Royal Dutch Shell Plc said last month that higher costs were limiting progress in oil sands projects in Canada.

To contact the reporters on this story: Rachel Graham in London rgraham13@bloomberg.net; Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net.

Last Updated: November 10, 2009 10:43 EST