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IEA releases World Energy Outlook 2012

World Coal,


The global energy map is changing in dramatic fashion, the International Energy Agency said as it launched the 2012 edition of the World Energy Outlook (WEO). According to the WEO, these changes will recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades.

“North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency,” said IEA Executive Director Maria van der Hoeven. “This year’s World Energy Outlook shows that by 2035, we can achieve energy savings equivalent to nearly a fifth of global demand in 2010. In other words, energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits.”

 

Changing global energy flows

According to the WEO, the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, (the WEO’s central scenario), the United States will become a net exporter of natural gas by 2020 and will be almost self-sufficient in energy, in net terms, by 2035. North America is likely to emerge as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035. Links between regional gas markets will strengthen as liquefied natural gas trade becomes more flexible and contract terms evolve. While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035. China, India and the Middle East will account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables.

Fossil fuels will likely remain dominant in the global energy mix, supported by subsidies that, in 2011, jumped by almost 30% to US$ 523 billion, due mainly to increases in the Middle East and North Africa. Global oil demand grows by 7 million bpd to 2020 and exceeds 99 million bpd in 2035, by which time oil prices reach US$ 125/bbl in real terms (over US$ 215/bbl in nominal terms). A surge in unconventional and deepwater oil is predicted to boost non-OPEC supply over the current decade, but the world will rely increasingly on OPEC after 2020. As production ramps up in Iraq, the country will account for 45% of the growth in global oil production to 2035 and is predicted to become the second-largest global oil exporter, overtaking Russia.

While the regional picture for natural gas varies, the global outlook over the coming decades looks to be bright, as demand is predicted to increase by 50% to 5 trillion m3 in 2035. Nearly half of the increase in production to 2035 is likely to come from unconventional gas, with most of this coming from the United States, Australia and China. Whether demand for coal carries on rising strongly or changes course radically will depend on the strength of policy decisions around lower-emissions energy sources and changes in the price of coal relative to natural gas. In the New Policies Scenario, global coal demand will increase by 21% and will be heavily focused in China and India.

 

The importance of energy efficiency

“Our analysis shows that in the absence of a concerted policy push, two-thirds of the economically viable potential to improve energy efficiency will remain unrealised through to 2035. Action to improve energy efficiency could delay the complete ‘lock-in’ of the allowable emissions of carbon dioxide under a 2 °C trajectory – which is currently set to happen in 2017 – until 2022, buying time to secure a much-needed global climate agreement. It would also bring substantial energy security and economic benefits, including cutting fuel bills by 20% on average," said Fatih Birol, IEA Chief Economist and the WEO’s lead author.

 

 

 

Adapted from a press release by David Bizley

Read the article online at: https://www.worldcoal.com/coal/12112012/iea_releases_world_energy_outlook_2012/


 

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