The Energy Challenge
The International Energy Agency released its 2012 World Energy Outlook yesterday; it presents analytical insights into today’s energy market, environmental issues and economic development with projections for 2035. It reveals the current transformation taking place within the oil and gas production industries, identifying the US as the future leader in the field in ‘light oil’ and ‘shale gas’. Estimating that the US will become almost self-sufficient in the lead up to 2035, therefore becoming even more competitive globally. Iraq is also predicted to do well as it will likely account for 45% of expansion within oil production; experts predict the majority will be exported to Asia.
Energy transformation has also been mentioned concerning the UK, in the Department of Energy and Climate Change press release yesterday, and has been dubbed the ‘energy efficiency revolution’. A topic of relevance considering the significant gap in controlling energy demand identified by the Select Committee’s scrutiny of draft Energy Bill; and the recent letters to David Cameron advocating the introduction of decarbonisation targets for the energy sector.
“…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…the world failure to implement energy efficiency measures amounts to an epic fail…” IEA-Fatih Birol (Chief Economist)
The need for improved energy efficiency throughout the global energy industries received a high precedence by the IEA and the issue was captured by the statements by Fatih Birol (above) and the projection that: ‘implementation of economically beneficial energy efficiency measures would boost global economic growth by US$18 trillion’. By reducing the global consumption it could also delay the date by which the world will be locked into a definite 2 degree temperature increased, from 2017-2022. Minister of Energy and Climate Change, Greg Barker has also stated that tackling efficiency is at the heart of the Government’s energy policy. Current governmental plans include the launch of ‘The Green Deal’ in January 2013. Efficiency of UK homes will be assessed and home improvements will be made. The cost of which will be paid for through a household’s energy bills and will not amount to more than the amount each house hold will save.
Another key message was on the subject of energy subsidies which at present are still too focused on fossil fuels ($523 billion in 2011); six times that of renewable energies. The current global subsidies for green energies is $88billion but is expected to increase to $230billion in just over 15 years. Green energy has been a hot topic in Britain over the last year with several Select Committee inquiries into the value of wind and nuclear power and with Hitachi being contracted for the UK’s new nuclear programme (see previous blog for more details).
Findings of the report have also called into question oil peak, as the development of new technologies has identified new reserves. So that the life expectancy of fossil fuels has increased, but issue of global warming is more pressing than ever. If more than one third of currently known reserves are burned then we will exceed the 2 degree danger point, destabilising the global climate irreversibly.
As a species we are at a crossroads, we must make a choice and the scientific message is clear fossil fuels must stay in the ground.
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