The International Energy Agency and its executive director Fatih Birol remain among fossil fuels’ biggest fans, predicting continued growth in global demand for oil through 2040 even as the organization’s 2017 World Energy Outlook acknowledges that such a reality would escalate the risk of climate catastrophe.
“It is far too early to write the obituary of oil, as growth for trucks, aviation, petrochemicals, shipping, and aviation keep pushing demand higher,” Birol said in a statement accompanying the agency’s forecast that fossil fuels will continue to supply 75% of the economy’s overall energy demand by 2040, down fractionally from 81% last year.
Energy demand falls in Europe and North America, but rises elsewhere, in the IEA’s primary energy future scenario. Total global consumption will “rise more slowly than in the past but still expand by 30% between today and 2040,” it predicts. “This is the equivalent of adding another China and India to today’s global demand.”
The agency premised its forecast on “a global economy growing at an average rate of 3.4% per year, a population that expands from 7.4 billion today to more than nine billion in 2040, and a process of urbanization that adds a city the size of Shanghai to the world’s urban population every four months.”
Its scenario is strikingly at odds with the warning recently voiced by 15,000 earth and environmental scientists that most of the critical natural systems supporting that anticipated growth are nearing collapse.
Nonetheless the agency—which has faced criticism in the past for persistently underestimating growth in non-fossil energy sources—anticipates demand for oil and gas will continue rising for the next 22 years. Its Outlook foresees “a continued large-scale need for investment to develop a total of 670 billion barrels of new [oil] resources” by then.
Other organizations, taking account of the climate implications of burning that much more oil, have warned that companies may end up wasting between US$1 and $6 trillion if they continue on the investment course the IEA foresees, and governments demonstrate sincerity in enacting carbon constraints compatible with keeping global warming below 2.0ºC.
Meanwhile, the IEA expects renewable energy sources—led by photovoltaic solar—to “capture two-thirds of global investment in power plants to 2040, as they become, for many countries, the least-cost source of new generation.”
The advance is particularly marked in the European Union, where “renewables account for 80% of new capacity, and wind power becomes the leading source of electricity soon after 2030, due to strong growth both onshore and offshore.”
Petroleum gas consolidates its position as a putative “off-ramp” from coal and oil in the IEA’s “Sustainable Development Scenario.” Consumption rises by nearly 20% to 2030 and stays “broadly at this level” for the next decade.
In a glimmer of hope for advocates of gas exports from British Columbia, the agency predicts the number of “liquefaction sites worldwide [will] double to 2040, with the main additions coming from the United States and Australia, followed by Russia, Qatar, Mozambique, and Canada.”
Any potential environmental benefits from burning gas instead of even dirtier fossils will be lost, however, unless “credible action” is taken “to minimize leaks of methane—a potent greenhouse gas—to the atmosphere,” the IEA warns.
The agency views such action as feasible, and claims to have conducted “the first global analysis of the costs of abating the estimated 76 million tonnes of methane emitted worldwide each year in oil and gas operations.” It finds that up to half of those emissions “can be mitigated at no net cost, because the value of the captured methane could cover the abatement measures.”
Even if that occurs however, “global energy-related CO2 emissions increase slightly,” under the EIA’s core scenario, reaching 35.7 gigatons of CO2 in 2040—a prospect the agency concedes “is far from enough to avoid severe impacts of climate change.”
American media coverage of the Outlook focused on its finding that the United States will become the world’s biggest exporter of oil and gas within a decade, driven by burgeoning output from shale beds unlocked by hydro-fracking.
“The U.S. becomes the undisputed leader for oil and gas production for decades, which represents a major upheaval for international market dynamics,” Birol’s statement noted. News outlets in the U.S. mostly read that as support for the Trump regime’s aggressive ambition to achieve global “energy dominance” over other nations.
By 2030, the New York Times observed, “the United States is expected to produce more than 30 million barrels of oil and gas a day, the report says. That is 50% more than any other country has ever produced in a single year.”
That gusher of hydrocarbons, the IEA says, is also forcing the world to accept a disruptive new “mindset about how gas markets should operate,” adopting free-wheeling purchases in real-time market exchanges over long-term, fixed-price contracts. That development, the IEA authors write, will “reorder international trade flows and challenge incumbent suppliers and business models.”