Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Energy watchdog warns against reliance on fossil fuels

November 9, 2011 | 12:14 pm

The Paris-based International Energy Agency warned today that world governments are locking themselves into a potentially disastrous future that depends too much on fossil fuels. The message came as the IEA released its annual World Energy Outlook.

The IEA has served as a kind of energy watchdog for industrialized nations since the 1973-74 oil crisis.

"We cannot continue to rely on insecure and environmentally unsustainable uses of energy,” said IEA Executive Director Maria van der Hoeven, adding that recent events helped illustrate the dangers, "The Fukushima nuclear accident, the turmoil in parts of the Middle East and North Africa and a sharp rebound in energy demand in 2010, which pushed CO2 emissions to a record high, highlight the urgency."

The IEA has projected a growth in world energy demand of 33% by 2035, most of it driven by China, India and emerging economies. But it also believes that the share of global energy provided by renewable sources, under current mandates, will rise from 13% currently to only 18% during the same period.

That means that the demand for oil, for example, will only continue to increase, from 87 million barrels a day in 2010 to 99 million barrels a day in 2035, the IEA said. The use of coal, the IEA predicts, will rise 65% by 2035.

“Governments need to introduce stronger measures to drive investment in efficient and low-carbon technologies," van der Hoeven said.

The IEA said the modest rise in the share of energy gained by renewables by 2035 was also predicated on a growth in government subsidies from a current $64 billion to $250 billion by 2035, a rise that is by no means certain "in this age of fiscal austerity." The IEA also noted that government subsidies of fossil fuels amounted to $409 billion in 2010.

Also: Gasoline could hit record highs in 2012

A boom in U.S. oil production

Expected delay in pipeline decision

-- Ronald D. White

Photo: A National Transitional Council fighter patrols the Libyan Oil Refining Co. in Ras Lanuf, west of Tripoli. The Libyan civil war shut down that country's 1.6-million-barrel-a-day oil production. The unrest throughout the Middle East was a sign, says the IEA, of the peril of dependency on fossil fuels. Credit: Youssef Boudlal / Reuters