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DAILY NEWS Dec 11, 2012 1:48 PM - 0 comments

Energy outlook: North America becomes net oil exporter, renewable energy rises

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2012-12-11

The global energy map is changing in dramatic fashion, the International Energy Agency said as it launched the 2012 edition of the World Energy Outlook (WEO). The Agency's flagship publication said these changes will recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades.

“North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency,” said IEA Executive Director Maria van der Hoeven.

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. 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 WEO also forecasts that renewable energy sources will become the world’s second-largest source of power generation by 2015 and close in on coal as the primary source by 2035.

The report predicts that consumption of biomass (for power generation) and biofuels will grow four-fold by 2035, with increasing volumes being traded internationally. “Global bioenergy resources are more than sufficient to meet our projected biofuels and biomass supply without competing with food production, although the land-sue implication have to be managed carefully,” the executive summary states.

However, this rapid increase in the use of renewables for energy hinges on continued subsidies. In 2011, these subsidies (including for biofuels) amounted to $88 billion, but over the period to 2035 need to amount to $4.8 trillion; more than half of this has already been committed to existing projects or is needed to meet 2020 targets, according to the WEO.

Water is essential to the production of energy, and the energy sector already accounts for 15% of the world’s total water use. The WEO states that the energy sector’s water needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects. Expanding power generation and biofuels output underpin an 85% increase in the amount consumed (the volume of water that is not returned to its source after use) through to 2035.

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