An International Energy Agency (IEA) report says more oil and natural gas needed to meet rising global demand.
Global energy demand is set to rise 27 per cent by 2040, according to the World Energy Outlook 2018 by the International Energy Agency. This includes growth in both oil and natural gas demand, with oil and natural gas continuing to meet 53 per cent of the world’s energy needs in 2040.
The numbers are from the New Policies scenario, which incorporates current and planned government initiatives to reduce greenhouse gas emissions.
The report highlights a few key trends in terms of what energy demand will look like in 2040 compared to today:
Rising incomes and global population growth of 1.7 billion people are mainly behind the increase in global energy demand. This growth is led by developing and newly industrialized economies like those of India and China.
Natural gas demand will increase by 43 per cent. It is a lower greenhouse-gas (GHG) emitting fuel compared to coal, and the IEA sees an opportunity for natural gas to replace coal for electricity generation, and so help reduce global greenhouse gas emissions.
Supply of renewable energy sources will more than double to meet 17 per cent of global energy demand.
Overall, low-carbon technologies and natural gas meet more than 80 per cent of the increase in global demand.
Total oil demand will increase by 10 per cent. While oil use in cars will peak by the mid-2020s, increasing need for petrochemicals will continue to drive the need for oil.
The report also highlights that the world could be headed toward an oil supply deficit—due to currently low levels of investment in oil exploration and production. This could result in escalating oil prices as existing oil reservoirs are used up and can no longer meet demand.
“Even with the growth in U.S. tight oil production, the world could be headed toward an oil supply crunch. This represents significant opportunity for Canada,” says Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP).
Increasing demand for natural gas in China and India also represents an opportunity for Canada as it moves forward on building a West Coast-based LNG industry.
McMillan notes that Canada has a role to play in meeting overall rising energy demand in a lower carbon future.
“With some of the highest environmental standards in the world, and commitment to innovation and new technology development, Canada can play a leadership role in responsibly produced energy,” says McMillan, adding “But only with increased access to international markets can we become a key player.”
The IEA is an international organization founded in 1974 that provides authoritative analysis on issues related to energy, including energy security, economic development, environmental awareness and global engagement. The IEA's annually published World Energy Outlook is widely used and referenced.