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IEA: Demand surge will drive prices
Anthony Deutsch Associated Press Writer
Global energy needs will surge 50 percent by 2030 and prices will rise if capacity is not significantly increased, the International Energy Agency said Nov. 7 in its 2005 World Energy Outlook.
There are sufficient oil and natural gas reserves to meet those needs, particularly in North Africa and the Middle East, but about US$20 trillion in new investments is urgently needed to bring those supplies to the consumer market, the agency said.
New energy sources will increasingly be needed to meet demand in growing economies like China and India.
Energy-related carbon dioxide emissions will also climb, by 52 percent in the same period, the Paris-based agency projected.
“These projected trends have important implications and lead to a future that is not sustainable from an energy-security or environmental perspective,” said Claude Mandil, the agency’s executive director. “We must change these outcomes and get the planet onto a sustainable energy path.”
The IEA, established during the oil crisis of 1973-1974, is a leading energy policy adviser for its 26 member countries, including the United States, Canada, Australia, 19 European nations including Germany and Britain, and the Republic of Korea.
It coordinates measures in times of oil supply emergencies and makes policy recommendations on broader energy issues such as climate change, market reform and energy technology. Production facilities will ease prices Crude oil prices are seen easing as more production facilities come online over the next decades, to US$35 a barrel by 2010. But the IEA raised its long-term projection for 2030 to US$39 a barrel, from US$29 in its 2004 report.
Oil was trading at about US$60 a barrel Nov. 7, down from the highs it hit in late August due to Hurricane Katrina in the Gulf of Mexico, but still nearly double its price two years ago. Concerns about growing demand and spare refining capacity, as well as unrest in oil-producing countries have driven prices up.
“Global oil refining faces new challenges as a lack of investment has diminished surplus capacity and production flexibility,” the report said.
The organization cited as risk factors environmental restrictions and local resistance, demand for lighter products and more demanding product specifications. Two-thirds of demand increase from developing countries The IEA said world energy demand will expand by more than 50 percent to 16.3 billion tons of oil equivalent by 2030, with two-thirds of the increase coming from developing countries.
Oil and coal demand will grow by 1.4 percent per year, with natural gas needs increasing 2.1 percent annually, it said.
In the Middle East and North Africa, domestic energy demand will more than double, driven by surging populations, economic growth and heavy energy subsidies.
At the same time, oil production in that region is expected to increase 75 percent by 2030 and natural gas production will triple, allowing more gas exports. The IEA expects the region’s share in global oil production will increase from 35 percent today to 44 percent in 2030.
“This means the countries of the Middle East and North Africa would need to invest, on average, US$56 billion per year in energy infrastructure. The level of upstream oil investment required will be more than twice that of the last decade,” the report said. Also alternative energy scenario The agency also published an alternative energy scenario, based on the impact of proposed policies, outlined in an action plan endorsed by the G-8 Summit of industrialized countries in July.
If countries implement those more environment-friendly policies, energy demand and carbon-dioxide emissions would be significantly lower, with overall global energy demand expanding 10 percent less than the business-as-usual scenario.
Demand for coal would then be a sharp 25 percent lower, while oil and gas export revenues in the Middle East and North Africa would fall by 21 percent. Renewable energy sources, such as hydro and solar, are then seen growing 27 percent with 16 percent lower carbon dioxide emissions.
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