Saturday , July 24 2021

The IEA warns of a global oil crisis if investment does not increase NTN24

The International Energy Agency (IEA) warned on Tuesday that it would face a "global crisis in crude oil supply in the middle of the next decade" if conventional oil-producing countries, mostly in the Middle East, did not increase their investment. in extraction projects.

The agency's general director, Fatih Birol, warned that the impending crisis posed a "big challenge" to global "energy security," which presents in the London annual report "Perspective for global energy 2018", according to the EFE agency.

"The oil market is entering a new phase of great volatility and uncertainty, due to changes in the fundamentals of the sector, but also because of the greater interconnection between geopolitics and energy," he said.

The IEA noted in its report that, while investment in conventional oil projects has declined since 2014 in the Middle East, the United States has acquired land in the production of shale and gas oil, and is projected that by 2025 it will be the first. the producer of the planet.

However, US exports are unlikely to be able to offset the expected short-term supply shortages by members of the Organization of Petroleum Exporting Countries, which will cause the crisis.

If conventional oil producers do not guarantee their production, the world will "rely heavily on the United States," said Tim Gould, head of energy supply and the IEA investment division.

In its report, the Agency estimates that world energy demand will increase by more than 25% by 2040 – especially in Asia and, in particular, in India – and 80% of this growth will be compatible with fossil fuels, especially oil.

Crude oil consumption will grow to around 106 million barrels per day by 2040 by the petrochemical and transportation sectors, such as airplanes, trucks and cargo ships, while in the case of cars there will be a decline after 2025.

"Despite the progress of renewable energy sources and the progressive trend towards electricity, this system continues to depend on fossil fuels," including crude oil, coal or natural gas, Birol said.

Demand for natural gas is "on the rise", with China leading, while, among renewable sources, advancing solar energy "thanks to government policy", but "other low-emission technologies need more momentum," the Agency notes.

To maintain global energy consumption, the IEA estimates that around $ 2 trillion in annual investment in the next 25 years will be needed for energy supply, while conventional oil producers must almost double their current investment.

In this year's report, the Agency analyzed the expansion of electricity as an energy source in an "increasingly digital" economy and with greater demand for electric vehicles.

In order for electricity generation to be sustainable and beneficial to the environment, renewable energy sources must be promoted and the government "must invest to improve the supply system" as well as a system of savings and efficiency, the agency points out.

However, Laura Cozzi, another author of the study, said that it is currently impossible for the entire economy to be "electrified", starting at 20% today.

Birol said in London that another serious problem in the energy sector was "the gap between agreed objectives for climate change and what actually happened on the market."

Economists regret that, "after three flat years, energy-related carbon dioxide emissions increased 1.6% in 2017 and are expected to reach a new record this year", which is "far" from the goals of the 2015 Paris agreement.

Writing NTN24

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