IEA Energy Outlook: Global energy map is changing
The International Energy Agency has released a report that shows the global energy map is changing significantly. By 2020, IEA’s, “World Energy Outlook 2012,” indicates, that the U.S. will become the largest oil producer in the world. By 2030, the report estimates, the U.S. could be a net oil exporter. The shift in capacity stems from increased oil and gas production in tight oil and shale resources in places like Pennsylvania and North Dakota.
Overall global energy demand will grow by more than one-third by 2035, the report states, with China, India and the Middle East accounting for 60 percent of the increase. The report offers various scenarios that could happen in the coming years, but the only energy source that will see global demand increases under every scenario is natural gas. “Consumption of biomass [for power generation] and biofuels grows four-fold, with increasing volumes being traded internationally,” the report indicates, adding that global bioenergy resources are more than sufficient to meet the world’s projected biofuels and biomass supply without competing with food production.
The continued use of coal, the fuel that has met roughly half of global energy demand over the past ten years, according to the IEA, will hinge on policy measures that favor lower-emission energy sources. Policy decisions in Beijing and New Delhi will carry the most weight for the amount of coal used, according to the report. Although China’s coal demand will peak by 2020, India will overtake the U.S. by 2025 as the second largest consumer of coal.
The use of nuclear power will decline in some regions, like Japan and France, based on policy measures aimed at reducing the amount of nuclear derived power, and in other places, like the U.S. and Canada, based on the lower price and abundance of natural gas compared to nuclear.
Although the U.S. will become a net oil exporter and potentially the world’s largest oil and gas producer, the report points out that “no country is an energy island.” The interactions between different fuels, markets and prices are intensifying, the report states. “Most oil consumers are used to the effects of worldwide fluctuations in price, but consumers can expect to see growing linkages in other areas.” One current example of that linkage, the report states, is how low-priced natural gas is reducing coal use in the U.S., freeing up coal for export to Europe where that coal has in turn replaced higher-priced natural gas.
“Policy makers looking for simultaneous progress towards energy security, economic and environmental objectives are facing increasingly complex—and sometimes contradictory—choices,” the report states.