The International Energy Agency released a report this week estimating that global energy demand will grow by more than one-third in a little more than 20 years. That kind of surge in demand will be a daunting challenge. But the projection also shows the critical role renewable energy and energy efficiency must play to meet that mind-bending increase in power and transportation need.
The World Energy Outlook presents authoritative projections of energy trends through 2035 and insight into what it means for energy security, environmental sustainability and economic development. The report, which covers all energy sources, together with an update on climate change issues, says that by 2035, the United States will become the world’s largest oil producer and, in fact, by 2030, could be a net oil exporter.
The report also says that on a global scale, some $523 billion was invested in fossil fuels in 2011, compared to only $88 billion for renewable energy resources. U.S. investment tracks the global ratio, with fossil fuels drawing seven times the subsidies as that spent to support renewables.
The IEA makes clear that fossil fuels will remain dominant in the global energy mix over the next couple of decades. And while the growth of U.S. oil production and world market strength detailed in the report is drawing many of the headlines, it also emphasizes the continued addiction this country has to oil. It’s a dependency that policy makers have long stressed cannot be maintained and must be addressed.
The IEA report says oil will be more expensive and cause more environmental damage. Furthermore, OPEC will end up controlling more than half of the world’s oil by 2035.
The outlook details what the IEA says is currently an “unsustainable energy system” that is “putting a brake on our economy,” citing record subsidies that are supporting the crude oil industry while oil prices remain historically high.
Renewable resources, says the IEA, are set to be world’s second-largest source of power generation by 2015 and are expected to close in on coal as the primary source by 2035. However, the global energy agency says this rapid increase hinges critically on continued subsidies.
The IEA does not reach these observations lightly. It’s an autonomous organization created by 17 developed nations, primarily in response to the 1973/74 oil crisis, to help coordinate a collective response to major disruptions in oil supply. Membership has grown over the years to 28 countries and its role has evolved to explore ways to ensure reliable, affordable and clean energy for its member nations and beyond.
While the pursuit of clean energy offers obvious energy security and environmental benefits, the economic advantages are critical in a world that continues to recover from the worst recession in 70 years. Just as an example, a report released earlier this year by the Global Renewable Fuels Alliance shows the biofuels industry contributed $277.3 billion to the global economy and supported nearly 1.4 million jobs in 2010.
Here in the United States, the payback from renewable energy development has been demonstrated repeatedly, with jobs created in the biofuels, wind and solar industries. It is growth that is reflected by an observation in IEA’s flagship publication that North America leads a shift in global energy balance ‑ and that shift includes a movement to renewable energy and energy efficiency.
The report also details a scenario that shows what energy efficiency improvements can be achieved simply by adopting measures that are justified in economic terms, including calling on policy leaders to deploy a mix of regulations to discourage the least energy efficient approaches, while incentivizing the most energy efficient actions. (Energy efficiency is the option of first choice in a 25x’25 future.)
So, while the IEA report suggests an America that’s seeking energy independence, though stuck in a bad relationship with oil, it also shows a nation that is creating new technologies, like advanced biofuels, more efficient solar cells and high-performing wind turbines. Policy makers should sustain that “energy shift” cited by the global agency and support the policies and funding mechanisms that insure a clean energy future for this country.