What the world will look like in 2035.
The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, the WEO’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. North America emerges as a net oil exporter, accelerating the switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035. Links between regional gas markets will strengthen as liquefied natural gas trade becomes more flexible and contract terms evolve. While regional dynamics change, global energy demand will push ever higher, growing by more than one-third to 2035. China, India and the Middle East account for 60% of the growth; demand barely rises in the OECD, but there is a pronounced shift towards gas and renewables.
The consequences of the Iraq invasion in 2003 - Iraqi oil and gas to China and ourselves. An Iraq-Iran-China alliance, perhaps. A pogrom against their enemies in Iraq, maybe.
Fossil fuels will remain dominant in the global energy mix, supported by subsidies that, in 2011, jumped by almost 30% to $523 billion, due mainly to increases in the Middle East and North Africa. Global oil demand grows by 7 mb/d to 2020 and exceeds 99 mb/d in 2035, by which time oil prices reach $125/barrel in real terms (over $215/barrel in nominal terms). A surge in unconventional and deepwater oil boosts non-OPEC supply over the current decade, but the world relies increasingly on OPEC after 2020. Iraq accounts for 45% of the growth in global oil production to 2035 and becomes the second-largest global oil exporter, overtaking Russia.
Looking to invest in unconventional gas companies?
While the regional picture for natural gas varies, the global outlook over the coming decades looks to be bright, as demand increases by 50% to 5 trillion cubic metres in 2035. Nearly half of the increase in production to 2035 is from unconventional gas, with most of this coming from the United States, Australia and China. Whether demand for coal carries on rising strongly or changes course radically will depend on the strength of policy decisions around lower-emissions energy sources and changes in the price of coal relative to natural gas. In the New Policies Scenario, global coal demand increases by 21% and is heavily focused in China and India.
“I’m very skeptical that multinational corporations have the best interests of communities at heart,” Don Barber, Caroline’s Supervisor, told me recently. “The federal government sold [Americans] out when they exempted fracking from the Clean Water and Air Acts,” he added. “Federal and state governments are not advocating for the civil society. There’s only one level left. That’s the local government, and it puts a tremendous load on our shoulders.”
Caroline’s Deputy Supervisor, Dominic Frongillo, sees local resistance in global terms. “We’re unexpectedly finding ourselves in the ground zero for climate change,” he says. “It used to be somewhere else, mountaintop removal in West Virginia, deep-sea drilling in the Gulf of Mexico, tar sands in Alberta, Canada. But now…it’s right here under our feet in upstate New York. The line is drawn here. We can’t keep escaping the fossil fuel industry. You can’t move other places, you just have to dig in where you are.”
If one is young, is it finally time to invest in renewable energy companies, or those promoting efficient energy use?
WEO-2012 presents the results of an Efficient World Scenario, which shows what energy efficiency improvements can be achieved simply by adopting measures that are justified in economic terms. Greater efforts on energy efficiency would cut the growth in global energy demand by half. Global oil demand would peak before 2020 and be almost 13 mb/d lower by 2035, a reduction equal to the current production of Russia and Norway combined. The accrued resources would facilitate a gradual reorientation of the global economy, boosting cumulative economic output to 2035 by $18 trillion, with the biggest gains in India, China, the United States and Europe.
Interesting low level of priority to either Africa or Latin America, especially considering their natural resources. And it is highly interesting how dependent the whole world economic system is in political stability in China, which really means international support for the current regime. We can expect to hear even less of the "butchers of Beijing" rhetoric than we now do.