IEA releases its 2008 World Energy Outlook Report
Welcome to the era of declining oil supply, volatile energy prices, and increased emission of green house gases. We are sorry to report that the economy is not doing well, which will put a pinch on investing in both alternative and conventional energy sources. Unfortunately, the resulting higher energy prices will further negatively impact the economy.
A small shred of good news is that, collectively, modern renewables (as a source of electricity generated) are slated to grow the most and are poised to become the second-largest source of electricity soon after 2010. Unfortunately the IEA projects energy demand growth of 45% in the next 25 years with a 20% increase in the demand for oil.
“Current trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially – they can and must be altered”, Nobuo Tanaka, Executive Director of the International Energy Agency, announced at the release in London. “Rising imports of oil and gas into OECD regions and developing Asia, together with the growing concentration of production in a small number of countries, would increase our susceptibility to supply disruptions and sharp price hikes. At the same time, greenhouse-gas emissions would be driven up inexorably, putting the world on track for an eventual global temperature increase of up to 6°C.”
Addressing the issue of centralized or distributed power generation, the problem is density – cities are expected to account for three-quarters of our energy in 2030 – up from two-thirds. That drives home a point made yesterday about needing to develop a robust infrastructure that provides power to large urban areas. Huge outlays are needed for production and distribution (they estimate $1 trillion/year) and needed capacity increases are in jeopardy given credit constraints.
Not quite a “virtuous” circle.
Here is the press release.
Buy the full report here.
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