A new report released this week says we're headed for an energy crisis, unless we take practical steps to address energy issues, including increasing demand for oil, higher fuel prices, and diminishing oil supplies
. The World Energy Outlook 2009, published by the International Energy Agency, calls for consumers and producers of energy to examine current trends and make some changes.

First of all, the reports points out the fact that the world is on track for a 6-degree rise in global temperature by 2030, which could result in serious greenhouse gas effects. The report outlines what it calls a 450 Scenario, a plan for limiting greenhouse gases to 450 parts per million of carbon dioxide equivalent. The plan also involves keeping the global temperature rise to around two degrees Celsius above pre-industrial levels.

"WEO-2009 provides both a caution and grounds for optimism," said Nobuo Tanaka, executive director of the International Energy Agency. "Caution, because a continuation of current trends in energy use puts the world on track for a rise in temperature of up to six degrees Celsuis and poses serious threats to global energy security. Optimism, because there are cost-effective solutions to avoid severe climate change while also enhancing energy security - and these are within reach as the new Outlook shows."

In addition, the outlook forecasts demand to rise by 40 percent between now and 2030, reaching 16.8 billion tonnes of oil equivalent. In this scenario, fossil fuels will account for more than three-quarters of incremental demand, the report said. China and India alone will account for over half of this increase. China will surpass the U.S. around 2025 to become the world's biggest spender of oil and gas imports.

With the way things are going, 1.3 billion people would still be without electricity in 2030, while universal access could be achieved with a $35 billion investment per year.

"At the IEA Ministerial meeting, a large majority of ministers showed their intention to take the lead, organize themselves and commit to the challenge to reach the 450 Scenario - the energy path of Green Growth," Tanaka said. "Only by mitigation action in all sectors and regions can we turn the 450 Scenario into reality."

The 450 Scenario would also involve cumulative incremental investment of $10.5 trillion in low-carbon energy technologies and energy efficiency by 2030.

The world economy would also face higher oil prices coupled with the downturn in oil sector investment, following the economic recovery.


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