IEA Chief Economist delivers keynote speech at B20 Business Summit

2 November 2011

The Chief Economist at the International Energy Agency, Dr. Fatih Birol, delivered a keynote speech at the B20 Business Summit, which took place on the fringes of the G20 summit in Cannes on 2 and 3 November.

Many of the world’s leading figures in the international business community were present for his talk, including Mr. Christophe de Margerie, CEO of Total; Mr. Atsutoshi Nishida, Chairman of Toshiba; Mr. Peter Voser, CEO of Royal Dutch Shell; Mr. Fulvio Conti, CEO of Enel; Mr. Abdulrahman Al Zamil, Chairman of Saudi’s Al Zamil Group; and Mr. Jean-Pascal Tricoire, CEO of Schneider Electric.

The primary purpose of the B20 event is to develop recommendations and issue relevant commitments from the business leaders and business organisations.

On investment in energy infrastructure:

The World Energy Outlook 2011, which will be released on 9 November, will show that $38 trillion of investment is required to meet projected energy demand through to 2035 and that investors in energy projects are facing a multitude of risks.

Breaking down this cumulative investment, Dr Birol explained that $16.9 trillion will be require for power; $10 trillion for oil; $9.5 trillion for natural gas; $1.1 trillion for coal; and $0.3 trillion for biofuels.

On access to energy:

Dr. Birol also stressed that over 1.3 billion people, around 20% of the global population, lack access to electricity, and 2.7 billion people, around 40% of the population, are without clean cooking facilities.

Investment of USD 48 billion per year is needed to provide universal energy access to the billions of the worlds poor who lack it by 2030. While this is more than five times the current level of investment to expand energy access, it only represents around 3% of projected global energy investment.

On fossil fuel subsidies:

Fossil-fuel subsidies result in an economically inefficient allocation of resources and market distortions, while often failing to meet their intended objectives, Dr. Birol argued, presenting the findings of the report prepared for G20 Leaders.

Fossil fuel subsidies have been driven higher by the rebound in international energy prices. They totalled $409 billion in 2010 – about $110 billion up on 2009.

He warned that without further reform, spending on fossil-fuel consumption subsidies is set to reach $660 billion in 2020, or 0.7% of global GDP.

What other topics does the 2011 World Energy Outlook focus on?

Dr. Birol outlines the main areas of focus in this video.