Watchdog warns of one energy crisis after another
Date: Tuesday, November 07, 2006 @ 22:24:49 UTC
Topic: General


By Carl Mortished, International Business Editor/ Times OnLine

The world will lurch from one energy crisis to another unless governments switch from increased burning of fossil fuels to more nuclear, renewable and energy-saving sources, the Western world’s energy watchdog said.

In a landmark report published yesterday, the International Energy Agency (IEA) forecast skyrocketing fuel prices, blackouts and supply disruptions as it pointed to a 50 per cent surge in energy demand by 2030.



“The biggest increase in energy use will come from coal,” Fatih Birol, the agency’s chief economist, said. “One of the consequences is CO2 will grow faster than energy demand, due to increasing coal use and declining nuclear share.”

In its report, World Energy Outlook 2006, the IEA offered a choice of two scenarios. In its reference case, the agency paints a picture of soaring demand and increasing risk of supply disruptions as dependence rises on a diminishing number of gas and oil suppliers.

“This energy scenario is not only unsustainable but doomed to failure,” said Claude Mandil, head of the IEA.

The IEA describes an alternative scenario in which global energy demand is reduced by 10 per cent by 2030, oil demand reaches 103 million bpd and OECD carbon emissions peak around 2015.

More efficient energy production and consumption would account for 80 per cent of the avoided emissions, says the IEA. For the first time, the agency recommends the nuclear option but states that “this will happen only if the governments . . . play a stronger role in facilitating private investment”.

The IEA chief said that the alternative policies are cost-effective, despite considerable upfront costs. The production of nuclear power is cheaper than gas-fired power generation at equivalent oil prices of $40, he said.

In a stark reminder of the risks, Mr Mandil pointed to the need to invest $20 trillion to meet rising demand for energy. “It is far from certain that this investment will actually occur,” said Mr Mandil. The apparent soaring investment by oil companies was illusory, he said, because of inflation in drilling costs.

Source: http://business.timesonline.co.uk/article/0,,16849-2442856,00.html






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