Saturday, November 11, 2006
The International Energy Agency (IEA) issued a warning that the World faces an insecure, dirty and expensive future unless the rate of investment in energy supplies is increased substantially.
In real terms, investment in oil and gas production has not increased significantly in the last five years, but demand has continued to rise. This has been despite oil and gas prices of between four and five times the 2002 levels. If no action is taken, demand will increase by over 50% between 2006 and 2030.
Coal is now cheaper than gas and nuclear is cheaper than both, in some cases even ignoring carbon tax effects. The continued rise in energy prices should make investment on the supply side more attractive.
These are among the findings of the “World Energy Outlook – 2006” report by IEA published this week in London.
Speaking at a news conference on Tuesday November 7, 2006, IEA Executive Director Claude Mandil said “WEO 2006 identifies under-investment in new energy supply as a real risk.” He said “We don’t see how we can avoid [nuclear power] if we want a sustainable long-term future.”
To secure the supply/demand position, IEA calls for investment in energy-supply infrastructure of over $20 trillion in real terms over 2005-2030 to ensure that the World moves into a “Cleaner, Cleverer and More Competitive Energy Future.”