Archive for the ‘World Energy’ Category

World Energy Outlook Report Released Tuesday

November 10, 2008

WEO Fossil Fuel Demand to 2030 Reference Scenario
The 2006 Report by the World Energy Outlook (WEO) was released on Tuesday by the International Energy Agency (IEA) which laid out two alternative paths down which future world energy supply could end up going – “under-invested, vulnerable and dirty; or clean, clever and competitive.” The IEA is quite clear that the demand for emissions-generating fossil fuels needs to be curbed if catastrophic climate change is to be avoided. In what it calls its ‘Reference Scenario’ whereby it outlines the energy situation up to 2030 if no action is taken by governments, it projects that energy demand is likely to increase by as much as 53%, due mainly to the emerging markets of countries like India and China. Needless to say, carbon emissions increase by a similar percentage during that same period.

The IEA also forecasts that increasing demands for oil and gas is likely to be met largely by the big OPEC oil producing countries with supply from the rest of the world ‘plateauing out’ by 2015 or so. This, as now, leaves western countries with a high dependency on oil vulnerable to huge price increases should there be any major disruptions to supply. Increases in demand globally can only accentuate that vulnerability.

However, such a scenario is not inevitable the report goes on to say. The IEA’s ‘Alternative Policy Scenario’ goes on to show how with a few relatively cost-effective government measures designed to curb emissions and to enhance energy security the scenario above can be avoided. Energy efficiency measures and alternative energy supplies aimed at reducing demand for fossil fuels are the key. The report says that if the world’s energy demand can be reduced by just 10% by 2030 it will help to reduce emissions globally by as much as 16% in the same period – that is an amount equivalent to the total outputs of America and Canada combined.

The real risk, the WEO identifies, is under-investment in alternative energy supplies. The report says that as much as $20 trillion will be required to undercut the Reference Scenario predictions in that period between now and 2030. Most of that, as we have highlighted before, is needed in the developing countries. Personally, I think the election of Barak Obama on Tuesday was probably the single most important event in moving towards the goal of achieving that Alternative Policy Scenario. If government policies are to be the determining factor in this success or failure scenario then having such an important proponent of alternative energy, and someone not ‘owned’ by ‘big oil’ is a huge leap forward.