Global fuel de­mands could bring ‘resur­gence’

The Columbus Dispatch - - Business -

LONDON — Oil will con­tinue grow­ing as a source of en­ergy for over two decades, with the U.S. set to be­come the undis­puted leader in crude and gas pro­duc­tion, the In­ter­na­tional En­ergy Agency said Tues­day.

The re­port from the Paris­based agency will come as grim news for of­fi­cials at­tend­ing global cli­mate talks in Bonn, Ger­many, as they grap­ple with ways to con­tain car­bon emis­sions. Sci­en­tists just this week said that emis­sions of the heat-trap­ping gas rose this year af­ter three years of not grow­ing.

The IEA said oil pro­duc­tion

will be driven by con­tin­ued growth in en­ergy-hun­gry in­dus­tries. Though so­lar power is set to be­come the cheap­est source of new elec­tric­ity gen­er­a­tion and the boom years for coal are over, oil and gas will con­tinue to meet the bulk of the world’s en­ergy needs, the IEA said.

Oil de­mand is fore­cast to keep ris­ing un­til 2040, with nat­u­ral gas grow­ing by a sharp 40 per­cent.

A more wide­spread use of elec­tric cars will not be enough to con­sign oil to the past, said IEA Ex­ec­u­tive Di­rec­tor Fatih Birol.

“It is far too early to write the obit­u­ary of oil, as growth for trucks, petro­chem­i­cals, ship­ping and avi­a­tion keep push­ing de­mand higher,” said Birol.

To­tal en­ergy de­mand is ex­pected to have grown by 30 per­cent by 2040 — and would be grow­ing twice that with­out ef­forts to im­prove en­ergy ef­fi­cien­cies.

The price of oil has risen over 30 per­cent since June to a two-year high of around $57 a bar­rel in New York trad­ing amid ev­i­dence of stronger eco­nomic growth around the world. But an­a­lysts ex­pect the price to not rise much fur­ther in com­ing months as the U.S. ramps up pro­duc­tion.

The IEA echoed that view, say­ing it ex­pects the U.S. to see a resur­gence in its oil and gas in­dus­tries and be­come the world’s big­gest net ex­porter by the end of the 2020s. Asian coun­tries will be­come the big­gest net im­porters of oil and gas, tak­ing in 70 per­cent of im­ports by 2040 as their economies ex­pand at a fast clip.

En­vi­ron­men­tal ac­tivists de­cried the IEA fore­casts as dis­count­ing any ef­forts by coun­tries to limit emis­sions as part of the Paris Agree­ment on cli­mate change.

“None of its core sce­nar­ios for the fu­ture of en­ergy pro­vide a rea­son­able chance that the world will avoid cli­mate catas­tro­phe,” said Adam Scott, se­nior ad­vi­sor at Oil Change In­ter­na­tional.

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