The International Energy Agency (IEA) is calling for improvement of energy efficiency and increasing the deployment of low-carbon energy, according to information presented at the launching of the agency's World Energy Outlook 2008.
"We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies and to curtail rising emissions of greenhouse gases," said Nobuo Tanaka, IEA executive director. "Current trends in energy supply and consumption are patently unsustainable--environmentally, economically, and socially--they can and must be altered. Rising imports of oil and gas into OECD (Organization for Economic Co-operation and Development) regions and developing Asia, together with the growing concentration of production in a small number of countries, would increase our susceptibility to supply disruptions and sharp price hikes. At the same time, greenhouse-gas emissions would be driven up inexorably, putting the world on track for an eventual global temperature increase of up to 6-degree centigrade."
OECD countries include, in addition to the United States, Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, new Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
The IEA publication reported that world primary energy demand is expected to grow by 1.6 percent per year, on average, between 2006 and 2039, assuming there are no new government policies.
"This is slower than projected last year, mainly due to the impact of the economic slowdown, prospects for higher energy prices, and some new policy initiatives," the information stated.
China and India are forecast to account for over half of incremental energy demand to 2030 while the Middle East emerges as a major new demand center.
The trends call for energy supply investment of $26.3 trillion to 2030, or over $1 trillion per year. "Yet, the credit squeeze could delay spending, potentially setting up a supply crunch that could choke economic recovery," the information stated.
Oil is expected to remain the world's main source of energy for many years to come, "even under the most optimistic of assumptions about the development of alternative technology," the report states. However, the sources of oil, the cost of producing it, and the prices that consumers will have to pay for it are extremely uncertain.
"One thing is certain," Tanaka said. "While market imbalances will feed volatility, the era of cheap oil is over. A sea change is underway in the upstream oil and gas industry with international oil companies facing dwindling opportunities to increase their reserves and production. In contrast, national companies are projected to account for about 80 percent of the increase of both oil and gas production to 2030. But it is far from certain that these companies will be willing to make this investment themselves, or to attract sufficient capital to keep up the necessary pace of investment. Upstream investment has been rising rapidly in the last few years, but much of the increase is due to surging costs. Expanding production in the lowest-cost countries--most of them in OPEC--will be central to meeting the world’s oil needs at reasonable cost."