Wall Street Journal (pg. A4), November 8, 2007
WHY COAL IS TO GET ADDITIONAL ATTENTION
[Rachel's introduction: "Even under the most optimistic assumptions, global carbon emissions -- the main culprit blamed for global warming --will be 25% higher in 2030 from today's levels. 'The pathway we're on is not sustainable,' either for the health of the environment or for securing stable energy supplies in the future, IEA Executive Director Nobuo Tanaka told journalists in London. 'Time is running out.'"]
By Neil King Jr. in Washington And Spencer Swartz in London
The International Energy Agency painted a tough energy outlook for coming years, with tightening oil supplies and a surge in global- warming emissions as China and India burn more coal to power their booming economies.
The industrialized world's energy watchdog also predicted fast-growing China will displace the U.S. as both the world's biggest polluter this year and the largest energy consumer by 2010, based on current trends.
The Paris group, in its annual forecast, said a number of factors, including the cost of oil, will contribute to a boom in coal. Aging and less-productive oil fields and resistance among major oil exporters to build spare oil capacity will make crude oil and natural gas more expensive and prompt developing countries to turn increasingly to the world's dirtiest fossil fuel. The IEA's annual World Energy Outlook also details a continued surge in oil demand that could result in a serious supply crunch around 2015. The agency portrays a world that by 2030 will be consuming 55% more energy than it is now, with almost half of the growth because of soaring demand in China and India.
While oil will remain the world's largest source of energy in terms of metric tons of oil equivalent, at 32%, coal's share is expected to jump to 28%, up from 25% now, contributing to a 57% increase in carbon emissions. Barring unforeseen changes in government policy to reduce oil consumption, the IEA predicts world-wide oil demand will hit 116 million barrels a day by 2030, up from about 85 million barrels a day now. Electricity use will nearly double, with most of the globe's new plants burning coal.
For most economies, the tough question is on the supply side. The IEA foresees a boost in production from new fields in the Middle East, particularly Saudi Arabia, but warns that "it is very uncertain" whether these new sources "will be sufficient to compensate for the decline in output at existing fields" in the Middle East and among other producers such as Russia, Mexico and Venezuela.
The resulting pinch in supply could result in "an abrupt escalation in oil prices" around 2015, an event the agency said "cannot be ruled out."
The jump in oil prices to nearly $100 a barrel from about $50 in early January has invigorated debate over whether oil prices will go far higher in coming years, or will taper off from a level that some critics insist is largely driven by speculation. Yesterday, oil futures on the New York Mercantile Exchange fell 33 cents, or 0.3%, to $96.37.
The IEA says consumers and governments globally are doing too little to improve energy-supply security and to cut pollution. Even under the most optimistic assumptions, global carbon emissions -- the main culprit blamed for global warming -- will be 25% higher in 2030 from today's levels. "The pathway we're on is not sustainable," either for the health of the environment or for securing stable energy supplies in the future, IEA Executive Director Nobuo Tanaka told journalists in London. "Time is running out."
China and India are setting the tone of global energy markets with the size of their populations, each over one billion, and double-digit economic-growth rates. The IEA predicts that the two countries combined will import more oil in 2030 than Japan and the U.S. do today. China and India will account for 80% of the growth in coal consumption over the next two decades, with China tapping domestic supplies but India having to import more of what it needs. While the IEA focused its most recent outlook on China and India, it also forecast demand growth in the Middle East. Oil use there is expected to hit 7.9 million barrels a day by 2015, more than twice the predicted demand in India.
Renewable energy sources such as solar will grow in use in certain areas, like the United Kingdom, but the current logistical challenges and costs of using and developing them mean all renewable energy sources will remain a fraction of total energy use globally in 2030 at about 10%, unchanged from today.
Write to Neil King Jr. at email@example.com and Spencer Swartz at firstname.lastname@example.org
Copyright 2007 Dow Jones & Company, Inc.