World Energy Outlook 2010

World Energy Outlook 2010

By Dr Arvind Kumar

T

he International Energy Agency (IEA), in its recently released World Energy Outlook 2010 has predicted energy demand will be rising--especially from China and India; oil prices (in inflation-adjusted terms) will be rising; and conventional oil production will no longer be able to rise. In its 2009 report, the IEA had stressed the importance of oil for economic growth and concluded that 106 million barrels per day (mb/d) would be required by 2030. For 2010, the IEA only predicts 99 mb/d by 2035 and avoids any discussion of economic growth, which some experts feel as meaning that the desired economic growth is not possible.

The IEA now sees OECD oil consumption falling from today’s 41.7 mb/d to 35.3 mb/d by 2035. This means that all OECD nations, including Australia, must revise down their future consumption estimates. Non-OECD nations are now expected to increase their oil consumption by 19 mb/d by 2035. Two thirds of this will come from China and India. World Energy Outlook 2010 further notes that global oil consumption has been faster than discovery of new reserves. Present consumption level of 30 billion barrels per year is more than double what is found. The IEA’s assertion that world will need to find an extra 900 billion barrels of oil over the next 25 years to meet demand seems surprising because keeping in view the current discovery rate of only 10 billion barrels it would take 90 years!