The foundations of the global energy system are shifting rapidly with key developments such as the resurgence in oil and gas production in the US and Iraq's major contribution to the growth in global oil production up to 2035. This was one of the key messages from Dr Fatih Birol, Chief Economist of the International Energy Agency (IEA), who was in Singapore on 4 December 2012 to present highlights from the recently-launched World Energy Outlook (WEO) 2012.
This is the 5th year that IEA has held its Asian launch in Singapore, in collaboration with the Energy Market Authority of Singapore (EMA).
Given the new emerging global energy landscape, Dr Birol explained that this will accelerate the shift in international oil trade towards Asian markets. There will be consequences in geopolitics as almost 90 percent of Middle East oil exports will go to Asia by 2035.
While fossil fuels remain dominant in the energy mix due to fossil fuel subsidies, which are up by almost 30 percent from a year ago, technological advancements have enabled cheap natural gas production. This has seen many countries pursue an energy mix that favours natural gas and renewable energy, and moves away from oil, coal (and nuclear for some countries).
That said, Dr Birol echoed an underlying concern that without a major breakthrough in international energy policies, 1.3 billion people--or almost 20 percent of the world's population--will have no access to electricity by 2035. Efforts to combat climate change have not noticeably been sufficiently effective. Based on the CO2 emissions from current infrastructure and production, the door to a 2C trajectory may be closed forever as early as 2017, he added.
Dr Birol also spoke on energy efficiency, and what it could do for energy markets, the economy and environment. Hhe indicated that as much as two-thirds of the economic potential to improve energy efficiency remains untapped. Not only can economically-viable efficiency measures halve energy demand growth within the next quarter century, energy efficiency can also delay the "lock-in" of CO2 emissions under a 2C trajectory by five years, till 2022.
Dr Birol described the huge gap in energy efficiency achievement as an "epic failure in international energy policies". Addressing this shortcoming would bring about climate change benefits as well as economic ones, as the cumulative investment in energy efficiency would be more than offset by fuel cost savings.
The World Energy Outlook 2012 is the IEA's flagship publication and is widely-recognised as the most authoritative source for global energy projections and analysis. Singapore was IEA's first Southeast Asia stop to launch the WEO 2012.