LONDON – The International Energy Agency said on Tuesday the global demand for energy would increase by 25 percent up to 2040.
The IEA “World Energy Outlook 2018” report said the growing demand was due to “rising incomes and a global population growing by 1.7 billion people,” and more investment in conventional oil was needed to keep up with the demand.
“Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years,” the report said.
The report said despite advances in renewable energies and electricity, growing demand for fossil fuels would be covered by United States oil and fracked shale gas extraction.
This oil increase was driven mainly by the transportation sector (long-distance road freight, shipping and aviation), while the growth in demand came from developing economies led by India, which in 2025 will overtake the US and European Union as leading energy consumers.
The agency also warned of the risk of a supply crunch looming largest in oil. The average level of new conventional oil project approvals over the last three years were only half the amount required to balance the market out to 2025.
The report said the electricity sector was experiencing its most dramatic transformation since its creation over a century ago.
Electricity was increasingly the fuel of choice in economies relying on lighter industrial sectors, services and digital technologies.
The IEA is a Paris-based, 30-nation member organization within the framework of the Organization for Economic Co-operation and Development (OECD), created one year after the 1973 oil crisis.