PARIS — The
global energy map is changing in dramatic fashion, the International Energy
Agency says as it launches the 2012 edition of the World Energy Outlook (WEO).
The report says these changes will recast expectations about the role of
different countries, regions and fuels in the global energy system over the
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,” IEA
Executive Director Maria van der Hoeven says. “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.”
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WEO finds that the extraordinary growth in oil and natural gas output in the US
will mean a sea-change in global energy flows. In its central scenario, the U.S.
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% of Middle Eastern oil exports being drawn to Asia by 2035.
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 account for 60% of the growth;
demand barely rises in the OECD, but there is a pronounced shift towards gas
fuels will remain dominant in the global energy mix, supported by subsidies
that, in 2011, jumped by almost 30% to $523 billion, due mainly to increases in
the Middle East and North Africa. Global oil demand grows by 7 mb/d to 2020 and
exceeds 99 mb/d in 2035, by which time oil prices reach $125/barrel in real
terms (over $215/barrel in nominal terms). A surge in unconventional and
deepwater oil boosts non-OPEC supply over the current decade, but the world
relies increasingly on OPEC after 2020. Iraq accounts for 45% of the growth in
global oil production to 2035 and becomes the second-largest global oil
exporter, overtaking Russia.
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the regional picture for natural gas varies, the global outlook over the coming
decades looks to be bright, as demand increases by 50% to 5 trillion cubic meters
in 2035. Nearly half of the increase in production to 2035 is from
unconventional gas, with most of this coming from the U.S., 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 IEA scenario, global coal demand increases by 21% and is
heavily focused in China and India.
scenario further projects that renewables 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, but capacity is still projected to
rise, led by China, Korea, India and Russia.
is essential to the production of energy, and the energy sector already
accounts for 15% 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% increase in the
amount consumed (the volume of water that is not returned to its source after
use) through to 2035.
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 U.S. and Europe.