IEA Calls for more investment, more energy efficiency and more transparency
(Doha) — 24 April 2006
"Major investment, together with energy efficiency improvements, is needed along the entire energy chain to overcome the challenges we are confronting in today's energy markets. Only through timely investment, can we build the energy bridges needed for a sustainable future”, said Claude Mandil, Executive Director of the International Energy Agency (IEA), in his key note address to the 10th International Energy Forum (IEF) in Doha, Qatar. His remarks were made at the opening ceremony of this unique forum for policy dialogue between energy producing and consuming countries, a meeting that gathers Ministerial delegations from more than 60 key producing and consuming countries for informal dialogue every two years. This year’s event was preceded by a one day meeting with top executives from the world’s leading energy companies.
Key IEA messages
Mr. Mandil stated that a prolonged pattern of under-investment in the oil sector has created constraints in the system that will take several years to resolve. Current oil price levels reflect not only geopolitics but also bottlenecks in both upstream and downstream capacities and are a risk to sustained global economic growth. Because the investment cycle takes time to bring new supplies on line, uncertainty will continue to characterise the market.
Mr. Mandil called for more investment now to ensure adequate supplies of all forms of energy. He told producers that if current policies remain in place global energy demand will grow by 25% by 2015, and by that time oil demand will reach 99.5 mb/d. This rapid growth will be driven by demand in developing countries. Oil will remain dominant as the single largest fuel in the global primary energy mix. Natural gas demand will increase even more rapidly. As oil and gas production shifts away from OECD countries, supplies will increasingly come from major producers in the Middle East and Russia. Continued strong demand for all fossil fuels seems a certainty at this time, even taking into account stronger policies to mitigate global warming risks, though sustained high prices may slow growth slightly.
In the meantime, what can consumer countries do if lagging investment leads to constraints in energy supplies? “The best option in the short term is to improve energy efficiency. Increasing the diversity of the energy mix - in a cost-effective way - will also help over time”, said Mr. Mandil.
Praising the progress made by the Joint Oil Data Initiative (JODI), Mr. Mandil emphasised the importance of reliable and transparent data in all energy markets. “All energy market analysis -- including demand, supply and reserves -- reflects the quality of the data.”
On a broader level, Mr. Mandil urged both producers and consumers to work together to confront the challenges posed by energy poverty and climate change. No energy system will be sustainable without global access to modern energy services, reliable and affordable supplies, and reduction of environmental impact.