Dr Birol, Chief Economist of the International Energy Agency, painted a picture of unprecedented uncertainty for global energy.

A glimpse into the energy future

The Institute was pleased to welcome Dr Fatih Birol, Chief Economist of the IEA and director of the World Energy Outlook (WEO), to Imperial. Dr Birol offered us a glimpse into the energy future, painting a picture of unprecedented uncertainty.

Energy Markets see soaring oil prices

The recent rise in oil prices has lead to an increase in the cost of imports that rivals the high levels seen in 2008, potentially threatening the global economic recovery. Unless governments act to moderate the growth in demand and to eliminate subsidies we may face a long term trend of rising prices, as producers are forced to turn to increasingly costly unconvential sources.

Climate Change outlook raises concerns

The commitments made at Copenhagen and Cancun will not be sufficient to contain global temperature increases to 2°C as a result of greenhouse gas emissions. Taking an optimistic view of how they are implemented, Dr Birol indicated that even if the rate at which the global economy was decarbonised was doubled in the run up to 2020, it would require a further doubling of this rate thereafter for the 2 degree target to be met in 2050.

Will the leadership of the UK and Europe be enough?

Although praising the leadership shown by the UK and Europe over climate change, Dr Birol indicated that the most important decisions will be taken in Beijing. Decisions on the exploitation of China’s vast coal reserves will have a large influence on the balance of global energy markets and the costs of different energy sources the world over.

In order to reach the global 2°C target, carbon intensity would have to fall at almost four times the rate of 1990-2008 in the period 2020-2035

So what is the energy outlook?

We may be entering a global age of gas as a result of a revolution in unconventional gas production in the US, together with the growth of international trade in liquefied gas (LNG). This is good news in terms of the potential displacement of highly polluting coal in power stations, though bad news if gas undermines the economics of the lowest carbon emitters such as renewable, nuclear and carbon capture and storage (CCS). This means that government support for renewables will be crucial if global deployment is to continue.