8 November, 2007
I was in London yesterday attending the launch of the International Energy Agency’s World Energy Outlook 2007 and I must admit that the report shocked me (because of its content) but also positively surprised me (because of the new “soft” realism of the IEA)
The new Outlook states in cautious and, of course, more diplomatic words that our world is increasingly on a trajectory towards climate chaos and self-destruction. Anyone who can read beyond the “diplo-speak” will see that the OECD’s energy watchdog is for the first time surprisingly pessimistic about future energy supplies and about the political feasibility of keeping global warming within safe 2-degree-limits.
The economic development of the two new economic giants, China and India, is a direct threat to our Western way of life. This, of course, is not what the report says literally but you need not be an expert to be able to understand the implications of the three scenarios painted by the WEO-2007.
Let’s have a closer look at those scenarios.
The Reference scenario is based on current policies in place and will lead to a growth in primary energy needs of 55% between 2005 and 2030. Global oil consumption will grow to 116 million barrels/day (today 85 million), a figure which even big oil CEO’s such as Christophe de Margerie of Total have questioned to be ever attainable. The IEA, of course, has to keep up a brave story and therefore maintains that these levels can be reached, but in an apparent contradiction also warns of a likely supply crunch by 2015 (last summer it had predicted 2012 – I wonder why they changed dates?).
What is even more worrying in this scenario is that coal use would jump 73% and, of course, with CCS (carbon capture and storage) not yet commercially available on big scale and China and India building new and inefficient coal-fired power plants every week, the impact on greenhouse gas emissions would be devastating (+57% growth between 2005 and 2030). This would bring us close to the 6 degrees warming that the IPCC predicts in its worst scenarios. “I hate the Reference scenarion”, Fatih Birol said openly during his presentation in London.
Is the Alternative scenario which is based on planned (but also still controversial and therefore not sure to be implemented) policies any less worrying? Not really. Oil consumption would still be over 100 million barrels per day and the emissions would lead to a 550 ppm (parts per million) scenario which according to the IPCC would result in more than 3 degrees warming. The IEA also included a “450ppm stabilisation case” which tries to make clear – if you read between the diplomatic lines – that current ambitions of the EU to keep emissions under this level are unrealistic and very costly (the IEA seems to disagree here with the Stern report).
The third “High-Growth” scenario is based on China and India continuing to grow at an annual rate of 7.5% instead of slowing down to 6% (currently GDP growth in China is above 10%). This would really lead to a nightmare world but unfortunately it looks like the most likely scenario to me. Oil demand would in that scenario be over 130 million barrels per day and emissions would be 23% higher than in the Reference scenario (that growth alone would be as much as Japan and Russia’s emissions now). There is no indication in the book of what this would mean in temperatures but I guess if this scenario happens, we do not even want to know.
Maybe the most candid and significant page in the Outlook can be found on page 215 under the title “Can China and India ever mirror Western lifestyles?”. The answer is a most resounding NO:
“A level of per-capita income in China and India comparable with that of the industrialised countries would, on today’s model, require a level of energy
use beyond the world’s energy resource endowment and the absorptive capacity of the planet’s ecosystem.
A couple of simple calculations illustrate this very clearly: if per-capita oil use in China and India were to rise to the current level in the United States,
their oil demand would increase by a combined 160 mb/d – almost twice the current level of world oil demand (not allowing for future increases in population). Without major changes elsewhere, total world demand of close to 240 mb/d would deplete remaining proven reserves fully in just 15 years, and estimated ultimately recoverable oil and natural gas liquid resources (including proven reserves, reserves growth and undiscovered resources) in 26 years.12 Similarly, if per-capita CO2 emissions in China and India reached current US levels, again assuming no major departures from trends elsewhere, world emissions would be three times higher than today. The implications for climate change of such an increase could be catastrophic.”
All in all, this new Energy Outlook is a remarkable document and should be mandatory reading for all politicians. For the first time, there is a new wind blowing in the normally over-optimistic IEA. And the 2008 Outlook might be even more courageous as Fatih Birol announced during the press conference in London that next year, the study will look into the real declines of oil fields and will also try to bring more transparency (and thus more realism) to the debate on gas and coal reserves. Has the IEA become a secret “peak believer”?
- IEA: World Energy Outlook 2007
- Forbes: IEA tips ‘king coal’ in bleak view of world’s energy future
- LastOilShock.com: IEA “supply crunch is not peak oil -Birol
- Telegraph: This doorstopper opens our eyes to the energy crisis
- AFP: Blow to environment as demand for fossil fuels set to increase