The authoritative, Paris-based, International Energy Agency has just published a new edition of its report on the world energy situation. World Energy Outlook, 2001, subtitled “Insights: Assessing Today’s Supplies to Fuel Tomorrow’s Growth,” argues that although the world’s energy reserves are more than enough to meet needs for the next twenty years and even for decades beyond, supply is not guaranteed.
Mature oil reservoirs in OECD countries will soon peak and decline. Consumers will grow more dependent on a small number of Middle East oil suppliers. Huge infrastructure additions are needed to bring natural gas to market and to burn coal more cleanly. To meet these challenges and exploit the favorable reserves situation, massive investments will be required in infrastructure and technology.
IEA director Robert Priddle, believes “We have absolutely no reason to worry about ‘running out of energy’ in the coming decades. But [..] vast amounts of capital must be mobilized to locate, develop and deliver energy to the markets where it is needed.” The main targets of the needed hundreds of billions of dollars of new investment are the ‘abundant and cheap oil of the Middle East,’ and the Former Soviet Union. In each case, foreign investment will be forthcoming only if the business climate in the host countries is congenial and only if oil prices guarantee investors a fair return on their money.
Beyond 2020 the report envisages that new technologies and new infrastructure will transform the energy world. Better extraction techniques will have expanded the availability of fossil fuels and other technologies will have sharply reduced their noxious side effects. World Energy Outlook, 2001. 421 pp. ISBN 92-64-19658-7. Price $150 from www.iea.org.
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