by Shane Henson — November 21, 2012—The International Energy Agency (IEA), an autonomous organization working to ensure reliable, affordable and clean energy for its 28 member countries and beyond, has released its World Energy Outlook 2012.
Drawing on the latest data and policy developments, the report presents analytical insights into trends in energy markets and what they mean for energy security, environmental protection and economic development, says the IEA. The report sets out updated projections of energy demand, production, trade, investment and carbon dioxide emissions, broken down by country, fuel and sector, to 2035. Oil, coal, natural gas, renewables and nuclear power are all covered, as well as climate change issues.
The report notes that North America leads the shift in global energy balance—and that shift includes a movement to renewable energy and energy efficiency.
“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.
The report finds that 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 report’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90 percent of Middle Eastern oil exports being drawn to Asia by 2035.
According to the report, renewables will become the world’s second-largest source of power generation by 2015 and close in on coal as the primary source by 2035. However, this rapid increase hinges critically on continued subsidies. In 2011, these subsidies (including for biofuels) amounted to $88 billion, but over the period to 2035 need to amount to $4.8 trillion; over half of this has already been committed to existing projects or is needed to meet 2020 targets. Ambitions for nuclear have been scaled back as countries have reviewed policies following the accident at Fukushima Daiichi in Japan, but capacity is still projected to rise, led by China, Korea, India and Russia.
Touching upon water, the report notes that it is essential to the production of energy, and the energy sector already accounts for 15 percent of the world’s total water use. Its needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects. In some regions, water constraints are already affecting the reliability of existing operations and they will introduce additional costs. Expanding power generation and biofuels output underpin an 85 percent increase in the amount consumed (the volume of water that is not returned to its source after use) through 2035.
World Energy Outlook 2012 also presents the results of an “Efficient World Scenario,” which shows what energy efficiency improvements can be achieved simply by adopting measures that are justified in economic terms, says the IEA. Greater efforts on energy efficiency would cut the growth in global energy demand by half. Global oil demand would peak before 2020 and be almost 13 mb/d lower by 2035, a reduction equal to the current production of Russia and Norway combined. The accrued resources would facilitate a gradual reorientation of the global economy, boosting cumulative economic output to 2035 by $18 trillion, with the biggest gains in India, China, the United States and Europe.
