Early in February 2011, Dr Fatih Birol, chief economist of the International Energy Agency, spoke about the end of cheap oil, the beginning of the Golden Age of natural gas, and the impending climate change issues. Meanwhile, global oil prices were at highs unseen since before the financial crash of 2008, the economies of the world were clipping along in the post-recession and there was political unrest in the Middle East. Then suddenly Japan, one of the world’s strongest and most stable economies, was walloped, first by a super-earthquake (rated 8.9 on the Richter scale) and then, a tsunami which destroyed much of its Eastern shoreline instantly. Aside from the immediate human toll and infrastructure damage, a hidden catastrophe had hit not only Japan, but the world’s perspective on how it generates its energy needs.
The End of Cheap Oil
According to Dr. Birol’s work with the International Energy Agency, three regions are driving the growth in global energy use. Specifically, China, India and the Middle East are fuelling the forecasted increases in global energy use, with China accounting for the dragons share based on its population size and income growth among the average Chinese citizen. Chinese energy policies will affect everything on a global basis. Regardless of what the Conference of the Parties (COP) initiatives state, China’s energy policies will have the biggest impact on the carbon dioxide emissions and energy industries. The West has essentially flattened out in energy use while developing countries are using more energy than ever before. The travesty in the situation is that for the developing countries, growth in energy use translates directly into economic growth. How can the developed world tell China and the developing world, “No, you can’t grow, because the environment is already at the point where you are not allowed to emit carbon dioxide, or use energy!” China is actively seeking to secure oil supplies to feed this forecasted growth in energy use. To maintain current global oil production and compensate for the decline in the current fields, we need to find another four Saudi Arabia’s. This will put the second biggest oil reserve in the world, the Canadian Oil Sands, front and centre when it comes to global oil policies and development.
The Golden Age of Natural Gas
With oil being increasingly difficult to extract, natural gas has become the new focus for governments in energy supply security. Again, for China, natural gas use is expanding quite rapidly. In 2011, the projected use in China will be 110 billion cubic metres, but by 2016, the annual use is forecasted to be over 260 billion cubic metres; an increase of 136 per cent in five years. Dr. Birol also stated that his group’s research is showing that between 2011 and 2035, Chinese growth in demand for gas is expected to increase by 44 per cent annually.
Climate Change and Renewable Energy
Every year, the COP meet to discuss the current situation and ongoing policy commitments regarding climate change and the environment. From the scientific analysis and study, it has been noted that if the atmosphere reaches concentrations of 450 parts per million (PPM) of carbon dioxide, the planet can expect average global temperature increases of up to five degrees centigrade. The COP have indicated that to ensure global economic and ecologic stability we must not have increases of over two degrees. However, achieving the two degree goal will require rapid decarbonisation of global energy sources – no oil, natural gas or coal. Major and bold policy changes must be created and followed, by every single country globally.