Investments in low-carbon energy need to triple if the world is to meet its Paris Agreement targets, the head of the International Energy Agency told the Financial Times.
“There is a gross mismatch, and the longer this mismatch persists the greater the risk of further sharp price swings and increased volatility in the future,” Fatih Birol said, noting that current levels of investment in clean energy were just a third of what was needed.
However, Birol also said that projected investments in oil and gas production were now in line with Paris Agreement climate targets. That’s a rare piece of good news for an industry that has become the target of constant accusations of being the sole party responsible for adverse climate changes.
The IEA expects gas demand to peak soon after 2025, Birol also said, adding that oil demand was also about to peak in a little more than five years, even if world governments make no new commitments about climate change. Oil demand, according to the IEA, would peak at 97 million bpd, although in an earlier forecast for the short term, the IEA estimated that oil demand would reach 100.6 million bpd next year. This is well above its latest peak level.
Global investments in energy this year, according to the IEA, will rise to $1.9 trillion, of which $370 billion are investments in low-carbon power generation.
In his interview with the FT, Birol also once again said that renewable power was not to blame for the energy supply crunch in Europe, adding that the crisis must not divert European leaders off their energy transition course.
“There is an inaccurate campaign that’s saying we’re seeing the first crisis caused by clean energy and that this can become a barrier for further policy action to address climate change. But this is definitely not true,” Birol said.
According to him, the crisis was the result of a variety of factors, including an uneven recovery from the pandemic, gas supply outages, and the weather.
By Irina Slav for Oilprice.com
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He is still in denial after he claimed two weeks ago that Europe’s energy crisis has nothing to do with renewables when the whole world accepts that the EU rash policies to accelerate energy transition at the expense of fossil fuels were behind the crisis. He and those who call for ditching fossil fuels live in a world of fantasy.
Now he is again digging a deeper hole for himself by claiming that he expects gas and oil demand to peak in a little more than five years. This is no more than self-delusion.
Let me repeat for his benefit my mantras. The first is that there could neither be a post-oil era nor a peak oil demand throughout the 21st century and probably far beyond. The reason is that there can never be an alternative as versatile and practicable as oil in the next 100 years. Moreover, the demand for oil and natural gas will continue to grow unabated albeit at a slightly decelerated rate because of rising global population from 7.9 billion currently to 9.7 billion by 2050 and a growing global GDP from $91 trillion now to $245 trillion by 2050.
The second mantra is that a full global energy transition and net-zero emissions are myths. They will never be achieved in 2050 or 2100 or ever. Even a modest energy transition can’t succeed without natural gas and nuclear energy.
The third mantra is that oil and gas will remain the core business of the global oil industry as long as there is demand for oil and gas and also the fulcrum of the global economy. Oil and gas are here.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Okay, I said my peace. I can go about my life.