The International Energy Agency (IEA) acts as energy policy advisor to 28 member countries, within the framework of the Organization for Economic Cooperation (OECD) in Paris. It was initially created in 1973 to coordinate measures in times of oil supply emergencies, but its mandate was expanded to include energy security, economic development and environmental protection. The IEA publishes its “World Energy Outlook” every year, with the latest report being published at the end of 2009. Some of the key points of the report are:
* Although the last year has been difficult and full of turmoil 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 a large scale, but no one is sure how quickly the recovery and rebound will occur. With 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 much lower than in previous years. Countries could seize the opportunity to develop low-carbon technology to work in tandem with fossil fuels, but will they?
* Fossil fuels remain the dominant source of primary energy worldwide, accounting for more than 3/4 of the increase in energy between 2007 and 2030. Coal will experience the largest increase in demand, followed by oil and the gas. Oil, however, remains the most important fuel in the primary mix until 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 highest growth in non-OECD member countries. The transportation sector will account for 97% of the increase in oil use.
* The main driver for coal and natural gas will be power generation, as global electricity demand is forecast to grow at a rate of 2.5% per year.
* The use of modern non-hydro renewable energy technologies, such as wind, solar, geothermal, etc. you will see an increase, especially for power generation. World production is expected to increase from 2.5% in 2007 to 8.6% in 2030, with wind power seeing the largest increase.
* Due to the economic collapse, the difficult financial environment and the general crisis, new investments in oil and gas fell last year. Energy companies are drilling fewer wells, cutting refineries, pipelines and power plants. Ongoing projects may have been canceled or postponed. Investment in renewable energy also fell. This delay and reduction in investment in energy will have far-reaching consequences, with the risk of a future shortfall in supply. This could lead to higher prices in the coming years, when demand has recovered, and this, in turn, could limit economies.
* Lower fossil fuel prices are now actually undermining the attractiveness of clean energy investments.
* Cuts in energy infrastructure or infrastructure maintenance (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 beginning in late 2010 (or when the economy recovers), natural gas demand should resume its upward trend. The power sector is expected to remain the main driver of gas demand. Noteworthy is the low carbon content relative to coal and oil.
* North America’s unexpected boom in unconventional gas production (especially horizontal drilling and shale fracturing), combined with economic decline and hardship, contributed to a natural gas supply glut in 2009 and will continue through the next one or two years.
The world’s remaining natural gas resources are large enough to meet demand through 2030, but the cost of 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 world energy markets. (ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.) ASEAN’s energy demand is expected to grow 75% between 2007 and 2030, or an average annual rate of 2.5%, faster than the average rate in the rest of the world. Along with the emergence of China and India on the energy scene, trends point to a refocus of energy activity in Asia.
The member countries of the IEA are Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Luxembourg, the Netherlands, New Zealand, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States.