The International Energy Agency (IEA), a global discussion forum for energy issues, has identified greater energy efficiency as the short term key to improve the world's energy shortage problems.
Speaking at the 10th International Energy Forum (IEF) in Qatar, Claude Mandil, executive director of the IEA, suggested that development work should be undertake across all energy producing sectors, however he stressed that great transparency and efficiency were also key goals.
Major investment, together with energy efficiency improvements, is needed along the entire energy chain to overcome the challenges we are confronting in today’s energy markets. Only through timely investment, can we build the energy bridges needed for a sustainable future, Mr Mandil commented.
Elaborating on the key points, Mr Mandil stated that a prolonged pattern of under-investment in the oil sector has created constraints in the system that will take several years to resolve. Current oil price levels reflect not only geopolitics but also bottlenecks in both upstream and downstream capacities and are a risk to sustained global economic growth. Furthermore, because the investment cycle takes time to bring new supplies on line, uncertainty will continue to characterize the market.
Mr Mandil called for more investment now to ensure adequate supplies of all forms of energy. He told producers that if current policies remain in place global energy demand will grow by 25% by 2015, and by that time oil demand will reach 99.5 mb/d. This rapid growth will be driven by demand in developing countries.
Describing the outlook for the world’s energy industry, the IEA executive director said that oil will remain dominant as the single largest fuel in the global primary energy mix. Natural gas demand will increase even more rapidly. As oil and gas production shifts away from OECD countries, supplies will increasingly come from major producers in the Middle East and Russia.
Continued strong demand for all fossil fuels seems a certainty at this time, even taking into account stronger policies to mitigate global warming risks, though sustained high prices may slow growth slightly.
However, with the oil industry becoming more stretched by demand, the IEA advises that consumers need to improve energy efficiency to reduce the risk of shortages of supply, while governments should be increasing the diversity of their energy mix.