The IAE is predicting that use of fossil fuels could cause a very sharp increase in the world’s temperature as the demand for energy rebounds from the recession.
In its new World Energy Outlook, the agency writes that “a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security.”
The IEA says that energy demand will move up again after 2009, reaching pre-recession level by 2012. Demand could increase by 40% between now and 2030, reaching 16.8 billion tos of oil equivalent. China will be the major cause of the increase in demand, and will pass the US as the largest energy-consuming nation around 2025.
The IEA cautions tremendous environmental changes will occur if the largest national governments do not accelerate them movement to renewable energy.
Earlier this week, long-term oil futures, those for crude delivery in December 2017, hit $99.97 according to the FT. Eight years is not such a long way off. Just this year, crude prices have moved from under $40 to about $80 and some experts believe that figure could hit $85 or more. Goldman Sachs (NYSE:GS) recently increased it forecast to that level.
The IEA has been wrong before. It makes changes to its assumptions about supply, demand, and oil prices several times each year. The climate could be fine two decades from now. Oil prices could be $50. But, almost no one believes those things will happen regardless of what the IEA predicts.
Douglas A. McIntyre