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World Energy Outlook – The International Energy Agency (IEA) Report

The International Energy Agency (IEA) acts as an energy policy advisor to 28 member countries, within the framework of the Organization for Economic Co-operation (OECD) in Paris. It was initially set up in 1973 to coordinate measure in times of oil supply emergencies, but their mandate broadened to incorporate energy security, economic development and environmental protection. The IEA publishes their “World Energy Outlook” each year, and the latest report was released at the end of 2009. Some of the key points in the report are:

* Even though the past year has been difficult and full of upheaval in the energy markets, the challenges for the future remain urgent. World energy demand fell with the economic contraction in 2009 – for the first time since 1981 on any large scale – but no one is sure how fast the recovery and rebound will occur. With current policies in place, energy use will resume its long-term upward trend with the economic recovery.

* Energy-related carbon-dioxide emissions in 2009 will be well below that of the previous years. Countries could take the opportunity to develop low-carbon technology to work in concert with fossil fuels – but will they?

* Fossil fuels remain the dominant source of primary energy worldwide, and accounts for more than 3/4ths of the increase in energy from 2007 to 2030. Coal will see the largest increase in demand, followed by oil & gas. Oil, though, remains the single largest fuel in the primary mix to 2030. Oil demand is projected to grow by 1% per year on average, from 85 million barrels per day to 105 million barrels per day by 2030, with the most growth from non-OECD countries. The transport sector will account for 97% of the increase in oil use.

* The main driver for coal and natural gas will be power generation, as world electricity demand is projected to grow at a rate of 2.5% annually.

* The use of non-hydro, modern renewable energy technologies such as wind, solar, geothermal, etc. will see an increase, especially for power generation. World output is expected to rise from 2.5% in 2007 to 8.6% by 2030, with wind power seeing the largest increase.

* Because of the economic collapse, the difficult financing environment and the general overall crisis, new investment into oil & gas fell last year. Energy companies are drilling fewer wells, cutting back on refineries, pipelines and power stations. Ongoing projects may have been cancelled or postponed. Investment in renewables also fell. This delay and reduction in energy investment will have far-reaching consequences, risking a future shortfall in supply. This could lead to surging prices in future years, when demand has recovered, and this could in turn constrain economies.

* Lower fossil fuel prices now are actually undermining attractiveness in clean energy investments.

* Cutbacks in energy infrastructure or maintenance of the infrastructure (due to economic stress) could cause problems in the future.

* Natural gas will play a key role in the future. With an assumed resumption of global economic growth from later 2010 onwards (or when the economy recovers), demand for natural gas should resume its upward trend. The power sector is expected to remain the largest driver of gas demand. The low carbon content relative to coal and oil is noteworthy.

* The unexpected boom in North America of unconventional gas production (especially horizontal drilling and fracturing of shale), combined with the economic decline and difficulties, contributed to a glut of the natural gas supply in 2009 and will continue for the next year or two.

The world’s remaining resources of natural gas are large enough to cover demand to 2030, but the cost developing and accessing some of the reserves is high. Rates of decline in existing fields now indicate that nearly half of the world’s existing capacity will need to be replaced by 2030.

* ASEAN (Association of Southeast Asian Nations) will play an increasingly important role in global energy markets. (ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam). ASEAN energy demand is expected to expand by 75% between 2007 and 2030, or an average annual rate of 2.5% – faster than the average rate in the rest of the world. Coupled with the emergence of China and India on the energy scene, the trends point to a refocus of energy activity in Asia.

IEA member countries are Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, Netherlands, New Zealand, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States.

Source by Kathy Heshelow


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