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Greenhouse gas emissions will rise by 52% by 2030 warns EIA EIA news release November 7, 2005
11/7/2005 London --- "The importance of the Middle East and North Africa (MENA) to global oil and gas markets cannot be underestimated. These countries have vast resources, but these resources must be further developed. Investment should not be delayed," said Mr. William C. Ramsay, Deputy Executive Director of the Paris-based International Energy Agency, as he presented findings from the World Energy Outlook 2005: Middle East and North Africa Insights (WEO-2005) today in London. Noting that a lack of investment in upstream and downstream capacity has contributed to the extreme tightness in the global oil market in recent months, Mr. Ramsay highlighted the critical role that this region will play in meeting growth in global energy demand. WEO 2005 focuses on the energy prospects in the Middle East and North Africa to 2030, covering in detail developments in Algeria, Egypt, Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the United Arab Emirates. Internal demand, resources, policies, investment, production, exports, even energy use for water desalination, all are examined. "To our knowledge, this is the first time that any publication with a focus on the Middle East and North Africa has undertaken such an extensive, country-by-country review of the energy sector of the region. At a time when experts debate whether the world will run out of energy, these results are particularly relevant," Mr. Ramsay said. In the MENA region, domestic energy demand is driven by surging populations, economic growth and heavy energy subsidies. Primary energy demand more than doubles by 2030. At the same time, MENA oil production will increase by 75% by 2030 and natural gas production will treble, allowing more gas exports. The region's share in global oil production will increase from 35% today to 44% in 2030. However, this means the countries of the Middle East and North Africa would need to invest, on average, $56 billion per year in energy infrastructure. The level of upstream oil investment required will be more than twice that of the last decade. But what if adequate investment is not made or consuming countries' policies change? To assess these risks, WEO 2005 develops two other scenarios, each of them far from unlikely: a Deferred Investment Scenario, in which investment in the producing countries is delayed, whether deliberately or inadvertently; and a World Alternative Policy Scenario, in which energy-importing countries take determined action to cut demand and change the pattern of fuel use, driven by high prices, environmental or security goals, or all three. The two scenarios have significant implications for MENA countries. In the Deferred Investment Scenario, energy prices rise sharply. Global energy-demand growth falls, cutting the region's oil and gas export revenues by more than $1 trillion from 2004-2030. World GDP growth slows down. Deferred investment could be the result of many factors, but whatever the cause, the results are higher prices, greater uncertainty and market inefficiencies. The WEO World Alternative Policy Scenario examines the consequences of new policies under consideration in consuming countries. "The G8 Plan of Action, agreed at the Gleneagles Summit in July 2005, launched detailed initiatives to promote cleaner energy and combat the impact of climate change. The IEA was asked to play an important role. This strong global commitment indicates that governments are already adopting alternative policies such as those in the World Alternative Policy Scenario to achieve the G8 goals," explained Mr. Ramsay. Under this Scenario, global oil and gas demand growth is lower, but the world continues to rely heavily on MENA oil and gas. CO2 emissions fall 16% below the level of the Reference Scenario but still increase around 30% by 2030. Assumptions about international energy prices have been revised significantly upwards in WEO-2005, as a result of changed market expectations after years of underinvestment in oil production and the refinery sector. The average IEA crude oil import price, a proxy for international prices, averaged $36.33 per barrel in 2004 and peaked at around $65 (in year-2004 dollars) in September 2005. In the Reference Scenario, the price is assumed to ease to around $35 in 2010 (in year-2004 dollars) as new crude oil production and refining capacity comes on stream. It is then assumed to rise slowly, to near $39 in 2030. In the Deferred Investment Scenario the oil price reaches $52 in 2030. The World Energy Outlook 2005 contains over 600 pages of detailed statistics and in-depth analysis. The study was produced by the IEA with input from many international experts from producing countries, industry and organisations including OPEC. The IEA's prestigious annual WEO series has long been recognised as the authoritative source for global long-term energy market analysis and has received honors for analytical excellence including awards from the Russian Academy of Sciences, the US Department of Energy and numerous public and private organisations. This is a modified press release from EIA
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