International Energy Agency Releases World Energy Outlook 2008

The International Energy Agency (IEA) (Paris, France) has released the first report of the World Energy Outlook 2008, which outlines the world's energy viewpoint for the next 22 years. According to research from Industrial Info Resources (Sugar Land, TX), the report says the world needs to invest $26.3 trillion by 2030, $4 trillion more than the agency's estimate last year, to make certain enough energy supplies exist. This translates to capital spending of more than $1 trillion per year.

The world's 800-plus oil fields will experience faster declines in the coming years as the industry continues to move offshore and into smaller production fields. The study also shows that capital investment is needed to increase overall oil production as well to offset declines in the world's aging oilfields. Gas and oil exploration and production companies are putting off major project spending amid falling crude oil prices and consumption slowdowns that have cut the demand for crude. Crude oil was trading at yearly record lows of $56.48 a barrel on the New York Exchange last week.

Even with the short-term global slowdown, the IEA says energy demand would continue to grow 1.6 percent a year on average from 2006 to 2030, an estimated increase of 45 percent. IEA Executive Director Nobuo Tanaka said, "Even if oil demand was to remain flat to 2030, 45 million barrels per day of gross capacity — roughly four times the current capacity of Saudi Arabia — would need to be built by 2030 just to offset the effect of oil-field decline."

Fatih Birol, the IEA's chief economist adds, "When demand starts to pick up, say in 2010, if the current investment plans are postponed we may see a supply crunch that is much stronger than what we saw last year, and prices that are much higher."

The IEA's World Energy Outlook 2008 is the world's most authoritative source of global energy trends. This year's edition provides a full update of energy projections to 2030, incorporating the latest data using improved modeling techniques.

www.iea.org