IEA warns of overhang in oil refining capacity
In its Medium-Term Oil Market Report 2009, the IEA warned that additions to global refining capacity in coming years are likely to create a substantial overhang and could prompt some refineries to close. In view of a weak oil demand, the Head of the IEA Oil Markets Division David Fyfe believes that weaker utilisation rates would cause “a real squeeze” on refineries in OECD countries. “We seem to be heading back into boom and bust in the refining sector”.

Europe needs easier gas flow
Referring to the remaining tensions between Russia and Ukraine over gas deliveries, Ian Cronshaw, Head of the IEA Energy Diversification Division, recommended an improved European gas network as a way to limit the impact of potential supply disruption. In a Reuters interview, he said: “In North America gas moves freely and quickly, but it’s not the case in Europe.” Despite a new contract between Russian gas exporter Gazprom and Ukraine’s Naftogaz, the difficult economic situation in Ukraine makes every monthly payment a challenge; the IEA is therefore concerned about a possible interruption in Europe’s gas supply.

IEA sees slight increase in 2009 oil demand
Referring to the slight upward revision of the oil demand forecast in the June IEA Oil Market Report, the Wall Street Journal quotes David Fyfe, head of the IEA Oil Industry and Markets division, as saying, “It’s a fairly modest revision.” […] “Some first and second quarter [macroeconomic] data is slightly healthier than we expected, but it’s still very early days”. In its report the IEA projects global crude demand this year to rise by 120,000 mbd to 83.3 mbd, an increase signalling hope but not necessarily implying the beginning of a global economic recovery.

IEA calls for more renewable energy funding
Speaking of the current economic stimulus packages, IEA Executive Director Nobuo Tanaka said that they were an “important step” but “insufficient to get us over the line to a cleaner more sustainable energy future”. He added that “the IEA is [.] calling for governments worldwide to truly embrace a new clean energy deal”. Tanaka said that renewable power generation had to more than double its share in total electricity supply to 40 percent by 2030, to help keep CO2 emissions levels below the generally agreed upon goal of 450ppm in the long term. The IEA estimates that only about USD 20 billion out of USD 2.6 trillion announced by the G20 countries will go to renewable power.

21-percent slide in energy investment in 2009
As a consequence of the world wide economic crisis, IEA Chief Economist Fatih Birol predicts a significant investment decline in the global energy sector. “Our calculations show that investment in oil and gas exploration in 2009 will drop by 21 percent from 2008, that is by USD 100 billion.” He reiterated that oil prices could surge back to the record high of summer 2008 once the economy recovers and energy demand increases, leading to supply lags as a result of insufficient capacity.

More energy efficiency needed to improve gas security
In view of continuing spats between Ukraine and Russia over natural gas contracts, IEA Executive Director Nobuo Tanaka advised consuming countries in Europe to take steps to confront the supply insecurity risk. “IEA member countries should have (.) many possible alternatives, invest into energy efficiency and diversify sources of transmission.” Gas security will be a topic on the agenda at the IEA ministerial meeting in October 2009.

Invest in Energy to Drive Growth
Reporting about a panel discussion on energy efficiency at the EBRD’s 18th Annual meeting, the Russian news agency Oreanda quotes the moderator, IEA efficiency expert Nigel Jollands: “Mick Jagger is wrong. Time is not on our side. (…) But energy efficiency can help buy us time”, he said, kicking off a discussion about how investing in low-carbon technology and waste reduction can stimulate economic growth and competitiveness.

IEA - Rising numbers of electronic gadgets undo efficiency gains
Reporting about the new IEA publication Gadgets and Gigawatts which finds that the rapidly growing number of televisions, laptops and other electronic devices will triple energy consumption by 2030, the newswire quotes IEA efficiency Analyst Paul Waide as saying that, despite this dramatic growth, there is considerable room for energy savings: “We can hold total consumption at today’s levels by using best available technologies”. According to the book, existing technologies could slash energy consumption by more than 30% at no cost or by more than 50% at a small cost.

IEA backs U.S. creating emergency gasoline reserve
Speaking at a Senate hearing on 12 May, IEA Director Didier Houssin backed the idea of creating a reserve for refined petroleum products, such as gasoline and diesel, which could help to cope with the vulnerability to hurricanes in the US refining system. “We believe that additional barrels in the US Strategic Petroleum Reserve (SPR) in the form of finished product and held in strategic locations throughout the country, ready to be utilized when refineries or distribution networks are disrupted, would bring greater additional security", he said. Mr. Houssin added that currently, the 720-million-barrel SPR holds only crude oil and would not be as effective in dealing with a disruption in gasoline supplies.

IEA sees China as world’s leading market for cleaner coal-fired plants
Reporting about China’s efforts to build cleaner coal-fired power plants, the NYT refers to the new IEA publication Cleaner Coal in China which finds that after relying until recently on older technology, “China has since become the major world market for advance coal-fired power plants with high-specification emission control systems”. The newspaper quotes IEA China expert Jonathan Sinton as saying that the country’s improvements were starting to have an effect on climate models: “It’s definitely changing the baseline, and that’s being taken into account”.

IEA Engaging Russia, China and India
Emphasising IEA efforts to reach out to major producer and consumer countries outside its membership, IEA Executive Director Nobuo Tanaka said the Agency had invited Russia, China and India to attend its ministerial meeting scheduled in October. “We haven’t gotten any concrete answer yet, but they are participating in the preparatory process already,” he said. “This is certainly one very good step forward for enhanced engagement or co-operation.”

Carbon Capture and Storage (CCS) Critical for China’s Coal Industry
The important role of CCS in the long-term future of China’s coal industry was highlighted at the Beijing launch of the new IEA publication Cleaner Coal in China. IEA coal analyst Brian Ricketts said “We know that CO2 capture and storage is not fully demonstrated and is currently too expensive, but we believe that China has the opportunity to lead in the development of new clean coal technologies.”

Worldwide oil demand continues to decline
After the April IEA Oil Market Report revised projected demand down by 1 million barrels per day, David Fyfe, head of the IEA oil industry and markets division said “this is a pretty exceptional period of oil demand collapsing.” He added, “everyone out there is trying to gauge when the recession is going to bottom out. We can’t say definitely that global GDP is not going to worsen.”

Effective Policies for Biofuels needed
While biofuels hold promises as a transporation fuel, there is still widespread concern of the effect producing it may have on agriculture. “If we just let biofuels ramp up in a random way, a lot of bad things can happen, in terms of taking land from food production, chopping down rainforests”, IEA Transportation Energy Analyst Lew Fulton said at an energy conference in Washington. He warned that a lack of global governance would make it difficult to coordinate effective policies to govern biofuels.

IEA Calls for “Effective” National Wind Energy Policies
Speaking at the European Wind Energy Association, IEA Executive Director Nobuo Tanaka called for “effective” national policies and a strong international framework. “We need to reinforce, expand and link up our transmission networks. We must also increase research and development efforts in wind-energy technology,” Mr. Tanaka emphasised.

IEA to Study Impact of Stimulus Packages on Energy
On the sidelines of an oil seminar in London, IEA Deputy Executive Director Richard Jones said the IEA was “encouraged” by economic stimulus packages being unveiled worldwide and plans to study their effect on energy. He also expressed concern that oil markets could tighten substantially if OPEC adheres to its production cuts. “There is a real risk that supply growth may lag the (demand) recovery and lead to substantially higher prices… possibly as early as this year.”

Huge potential for oil investment in Iraq
Iraq’s latest plans to boost oil production are going in the right direction, said IEA Director of Energy Markets and Security Didier Houssin. “The Iraqi potential is huge. What is interesting is that they want to force investment with international oil companies and they want to give access to this potential to develop it in a short period of time.”

Wind Energy Has Important Environmental Role
Speaking at the European Wind Energy Conference, IEA Executive Director Nobuo Tanaka emphasised that wind energy “has an important role to play in climate change mitigation” but to tap into its full potential, “we need effective policies and a strong international framework. We need to reinforce, expand and link up our transmission networks. We must also increase research and development efforts in wind energy technology.” He also stressed the importance of focusing economic recovery plans on green investments for a short-term stimulus and long-term benefits.

Surge in Oil Prices Could Hurt Global Economic Recovery
IEA Head of the Oil Industry and Markets Division David Fyfe welcomed the OPEC decision not to cut production quotas given the strains that are being faced by the global economy. “The last thing we need in the short term is an abrupt surge in oil prices,” he said.

IEA Calls for Cleaner Vehicles
At the launch of the Global Fuel Economy Initiative (GFEI) at the Geneva Motor Show, IEA Executive Director Nobuo Tanaka said “We have to find ways to reconcile legitimate aspirations for mobility, an ambitious reduction in CO2 from cars worldwide and global economic recovery.” He added, “In confronting the economic recession, this is a real opportunity for governments to combine support for the motor industry with measures to achieve environmental and energy policy goals.