International Energy Agency - World Energy Outlook 2012

On the 12 November the International Energy Agency published the World Energy Outlook 2012. A
summary of the World Energy Outlook can be downloaded here: http://www.iea.org/

The report makes for grim reading. Oil consumption in China, India and the Middle East continues
to grow with much of this growth down to increases in road traffic, both cars and road freight.
Similarly demand for coal and gas is rising in the same parts of the world. More surprisingly the
report predicts that oil and gas production in the USA will increase as new technologies unlock oil
shale and gas with the result that the USA will become more self-sufficient in oil and gas and that the
price of both will drop in North America.

The new technologies being implemented in the USA includes fracking that has opened up new gas
fields and has reduced the price of gas to American consumers. This may be good news for the US
economy but has potentially disastrous consequences for climate change. The IEA argues that it will
be impossible to limit global temperature increases to two degrees Celsius if these newly accessible
resources of oil and gas are exploited. In fact says the IEA ‘no more than one-third of proven reserves
of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal, unless carbon
capture and storage (CCS) technology is widely deployed.’

This is a stark reminder that the global resources of oil, coal and gas, if fully exploited, will return to
the atmosphere sufficient quantities of carbon dioxide to create climate change impacts that could
be as profound and they are unpredictable. Given our modest success in restraining the use of fossil
fuels and the attraction of cheap oil and gas, this prospect is becoming increasingly likely.

It must be said that the IEA projections have not gone unchallenged. Gail Tverberg has argued that
the projections are unrealistically high and the cost of developing the new resources will slow their
development. You can read her arguments here:
http://ourfiniteworld.com/2012/11/13/iea-oil-forecast-unrealistically-high-misses-diminishing-returns/