The International Energy Agency (IEA) has launched a significant challenge and provided two somewhat distressing warnings: two thirds of the world’s fossil fuel reserves need to be kept underground if we are to avoid climate change, even while it is projected that the energy sector will double its consumption of freshwater over the next 20 years and the world’s poor will continue to lack access to energy.
These statements appear in the IEA’s ‘World Energy Outlook 2012’ released last November. Not only are its contents striking for laying bare the gravity of the current situation, but also one must not forget that this Agency depends on the governments of the Organisation for Economic Co-operation and Development (OECD). In other words, it depends on the industrialised nations, and has never been characterised by its environmental concerns in its previous reports. Rather, it has historically been associated with the energy industry, while its discourse has been one of openly promoting the development of energy provision. However, in recent years something has started to change in the outlook of the IEA. It acknowledged the fact that the world had reached its Peak Oil level in 2006 (World Energy Outlook 2010) and began to formulate energy scenarios in order to try and halt the threat of climate change (World Energy Outlook 2009). This year’s report maintains these recent inclinations, adding to its previous concerns the warnings over the increased use of water by the energy sector and over the continued unsustainable path being taken by the world. The report’s contents barely merit further comment. Considering that they originate from an organisation that can hardly be labelled as militants of ‘environmental fundamentalism’, they are telling enough as they are. The global demand for energy is set to increase by more than a third between now and 2035. According to the IEA, meeting this demand would require an overall investment of some $37 trillion dollars, between 2012 and 2035, a figure which roughly equals 1.5% of global GDP over this period. CO₂ emissions from the energy industry will grow from an estimated 31.2 gigatons in 2011 to 37 Gt in 2035, which would likely lead to a rise in average global temperatures of some 3.6°C. If the world aims to fulfil its ambition of limiting global temperature rises to 2°C, up to the year 2050 we cannot use up more than a third of the world’s proven fossil fuel reserves. In other words: even the IEA is signalling the need for a post-petroleum transition. Fossil fuels will continue to be the main energy source up until the end of the analysed time period. The demand for oil, gas and coal is set to increase in real terms until 2035, although its proportion of the global energy mix will fall from 81% to 75% during this time. The consumption of oil will reach 99.7 million barrels a day (mb/d) compared to the 87.4 mb/d used in 2011. China alone will represent half of this global increase in the demand for crude oil. All of the net increase in world oil supplies can be attributed to the production of unconventional oil resources, which carry with them greater impacts of the local environment and on greenhouse gas emissions. Natural gas production will see a significant increase (from 3.4 billion to 5 billion cubic metres), reaching the same levels as coal in terms of primary energy supply by 2035. The majority of this increase is again driven by China, although one can also observe an expansion in use by OECD member-countries. Half of the rise in world natural gas production will come from “unconventional” exploitation (e.g. hydraulic fracturing, also known as fracking), a practice that has been banned in numerous countries owing to its associated environmental hazards. In the meantime, subsidies to fossil fuels continue to distort the globe’s energy markets, having reached the figure of $523 billion in 2011, almost 30% more than in 2010. Financial backing for renewable energy sources, on the other hand, rose to some $88 billion in 2011. The IEA report also includes a new ‘Efficient World Scenario’. Here, an additional investment of $11.8 trillion in End-use technology is proposed, which is more than compensated by a $17.5 trillion fall in fossil fuel receipts and a reduction of $5.9 trillion in investment in extending energy provision. In this scenario, the increase in global demand for primary energy is reduced by half, and CO₂ emissions reach their peak by 2020 and fall to 30.5 Gt in 2035, which points to an estimated long-term increase in mean global temperatures of 3°C. As well as efficiency, says the IEA, investment in low-carbon technology is lacking, if we want to keep temperature rises below the 2°C agreed by the UN Convention on Climate Change. The production of energy requires more and more use of water, according to the report. The use of freshwater for the production of energy in 2010 rose to some 583 billion cubic metres, or 15% of the world’s total water use. Of this, 66 million m³ were not returned to source after use, that is to say that they were consumed during the production phase. The use of water is projected to rise by 20% between 2010 and 2035, but consumption will rise by 85% (more than double the rate of growth in the demand for energy). These trends are driven by the transition toward new power stations (which have greater efficiency but also use more water) and the expansion of biofuel production. The use of water, as the report warns, may well become an obstacle to the development of unconventional gas and oil, electricity generation, and maintaining pressure on oil fields for the production of petroleum. Currently, there are almost 1.3 billion people who continue to lack access to electricity and 2.6 billion who do not have clean cooking utilities at their disposal. In the absence of new measures, the report projects that nearly a billion people will continue to lack electricity and 2.6 billion will still not have adequate cooking utilities in 2030. It is estimated that in order to achieve universal access to energy by 2030, nearly $1 trillion of accumulated investment will be needed. This is the equivalent of just 3.5% of the total investment in energy-related infrastructure. Universal access to energy services will only lead to an increase in the global energy demand by 1% to the year 2030, and a 0.6% rise in C0₂ emissions. Thanks to Giles Constantine, UCL-Americas (UK) for his help translating this piece.