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Oil, which currently makes up 34% of the global energy supply mix will see its share contract to 28% by 2040, as consumers look for cheaper sources of energy — primarily natural gas and coal.

“With prices expected to increase in the long term, the world oil price in real 2011 dollars reaches $106 per barrel in 2020 and $163 per barrel in 2040 in the IEO2013 Reference case,” the EIA said.

Still, in real terms oil production will rise from 86.6 million barrels per day in 2010 to 115 million within three decades. Canada will be among the leading non-OPEC producers taking its production just over 6 million bpd by 2040. The EIA forecast is far more conservative than the 6.7 million bpd estimated by the Canadian Association of Petroleum Producers by 2030.

However, the EIA concedes that higher oil prices could increase the likelihood of exploration of reserves that were previously not considered commercially viable.

The EIA forecast is even more bullish on global natural gas production, with the United States, Canada and China expected to lead the way thanks to their ample shale gas reserves.

“Tight gas, shale gas, and coalbed methane resources in Canada and China account for more than 80% of their total domestic production in 2040,” the EIA said.

LNG will also boost its share with natural gas trade, more than doubling from about 10 trillion cubic feet in 2010 to around 20 trillion cubic feet in 2040.

“Most of the increase in liquefaction capacity is in Australia and North America (the United States and Canada), where a multitude of new liquefaction projects are expected to be developed, many of which will become operational within the next decade,” said the EIA, noting that existing facilities in North Africa and Southeast Asia are being underutilized or shutting down as a result of production declines.

On the demand side, rising prosperity in China and India is a major factor in the outlook for global energy demand,” EIA Administrator Adam Sieminski said in a news release. “This will have a profound effect on the development of world energy markets.”

Demand in countries outside the Organization for Economic Cooperation and Development will increase by 90% through 2040. Use by OECD members, including the U.S. and Japan, will grow 17%.

Renewables will also raise their market share from 11% in 2010 to 15%, and nuclear will remain an important energy source, making up 7% of global supply.