Russian energy exports are enjoying a boom, based on sustained demand from Asian markets, that highlights how critical it is for the country to invest about $100 billion to expand and improve the sector, IEA Chief Economist Fatih Birol said in an interview in Moscow. He also noted, "The most important thing for Russia is to try and use energy much more efficiently."

The IEA will canvass ideas for its regulatory recommendations about unconventional extraction of shale gas, including so-called fracking, at a workshop it is organising for March 7, 2012, in Warsaw. The recommendations will be issued in a study report in May, as an excerpt from the IEA’s annual flagship publication, the World Energy Outlook, that comes out in November. IEA Chief Economist Fatih Birol said governments must address serious environmental problems that include water pollution and methane-gas venting linked to production and extraction of unconventional gas. “We hope the G-20 will consider the [regulatory] recommendations during their deliberations in Mexico this year and discuss what can be done to address these challenges,” he said. He added that new regulation based on the recommendations may give a slight increase in the cost of production, but the good news is that existing technology can minimize or completely address these real environmental problems.”

IEA Executive Director Maria van der Hoeven reiterated that she welcomes statements by key Gulf producers that they will continue to meet existing and any incremental demand from their customers. Speaking in Davos during the World Economic Forum, she also highlighted the IEA’s estimates for oil demand this year, noting that the Agency’s different scenarios are predicated on global growth rates.

The global demand for oil demand fell by 300 000 barrels a day in the final quarter of 2011 in the first decline since the 2008-09 global financial crisis, according to the International Energy Agency. The weakening economy, a mild winter and high crude prices combined to slow consumption. The IEA still forecasts overall growth in demand for 2012, but it scaled back that increase by 200 000 barrels to 1.1 million barrels a day. David Fyfe, head of the Oil industry and Markets Division, said, “We’re flagging that there are clearly downside risks to the global economy and to oil demand.”

A global economic slowdown and the eurozone debt crisis have curbed government investment in renewable energy, IEA Chief Economist Fatih Birol and other experts warned participants in the World Future Energy Summit in Abu Dhabi. "There are already some signs that government support may be slowing down in Europe," Birol said, naming Germany and Spain as countries where support for renewables has apparently declined. He added that although the renewable energy sector was continuing to grow, its expansion was "far slower" than it should be to meet demand. "The energy sector needs long-term planning," he said, arguing that "it would be a pity" if governments fail to fully support the development of renewables.

Global subsidisation of fossil fuel consumption -- €321.3 billion in 2010 – is the biggest obstacle to the development of renewable energy, the International Energy Agency’s Chief Economist, Fatih Birol, explained during the second day of the World Future Energy Summit in Abu Dhabi. He added that the IEA’s World Energy Outlook shows that fuel subsidies are a very inefficient way of helping the poor: only 8% of the huge subsidies for fossil fuels in 2010 reached the poorest 20% of people around the world.

The International Energy Agency's member countries would release oil stockpiles “only if we have really serious supply disruption," IEA Executive Director Maria van der Hoeven said in an interview in Abu Dhabi during the World Future Energy Summit. The IEA is examining which nations have extra capacity, she said, expressing confidence in Saudi Arabia’s ability to provide spare oil production capacity. “We monitor and assess the situation,” Ms. Van der Hoeven said.

If fossil fuel infrastructure is not rapidly changed, the world will 'lose for ever' the chance to avoid dangerous climate change. "I am very worried – if we don't change direction now on how we use energy, we will end up beyond what scientists tell us is the minimum [for safety], “said IEA Chief Economist Fatih Birol at the launch of the World Energy Outlook (WEO) 2011 in London. If current trends continue, and we go on building high-carbon energy generation, then by 2015 at least 90% of the available "carbon budget" will be swallowed up by our energy and industrial infrastructure. By 2017, there will be no room for manoeuvre at all – the whole of the "carbon budget" will be spoken for, according to the IEA's calculations. Birol's warning comes at a crucial moment in international negotiations on climate change, as governments gear up for the next fortnight of talks in Durban, South Africa, from late November. "I think it's very important to have a sense of urgency – our analysis shows [what happens] if you do not change investment patterns, which can only happen as a result of an international agreement,” added Birol.

Jumps in oil prices, which led some countries to withdraw crude from stockpiles earlier this year, are less likely as economic growth slows and Libyan fields resume output, said David Fyfe, Head of the IEA’s Oil Industry and Markets Division. “There is not the same potential for economically damaging spikes in price in the fourth quarter that we saw in the third quarter,” he added.

The door may be closing on the opportunity to prevent average global temperatures from rising by more than two degrees Celsius. “To limit the temperature increase to 2 degrees Celsius is becoming much more difficult and the door may be closing if we do not act very boldly and urgently”, said IEA Chief Economist Fatih Birol on the sidelines of the IEA Ministerial. His remark was based on numbers that will appear in the IEA’s World Energy Outlook.

The world’s entire population can have electricity and cleaner stoves by 2030 if $48 billion is invested each year, the IEA said in its first estimate of the cost to end energy poverty. The report “Energy for All: financing access for the poor”, an early excerpt of the “World Energy Outlook” 2011, was presented in Oslo. “Providing energy for all is crucial for social and economic development, and beyond that it’s a moral obligation,” said IEA Chief Economist Fatih Birol. An illustration of the inequality is that 791 million people in sub-Saharan Africa excluding South Africa use about as much energy each year as 19.5 million people in New York State, added Birol.

The financial crisis and fading government support for climate action have seriously eroded global plans to capture and store carbon, the IEA warned. Time is running out because of slow progress on carbon capture and sequestration (CCS). “With current policies, CCS will have a hard time being deployed…There is less of a global push for climate action, and tighter government finances”, said IEA deputy executive director Richard Jones.

World oil consumption will increase more slowly than expected this year and next as the pace of global economic growth eases, the IEA said. The oil market had been tight in recent months but the balance could ease if there were no further disruptions to supply”, said David Fyfe, head of the oil industry and markets division.

A fundamental change is needed in power generation, with a greater and more urgent investment required in renewables used in all industries, including the metals sector, said IEA Deputy Executive Director Richard Jones at a Metal Bulletin conference in Paris. “Industry is a key actor in the fight against climate change”, he said. Some progress has been made but more is needed. “Technology can help bring about a low-carbon industrial revolution – global action is needed”, he added. The technology will include biofuels.

There does not appear to be a need for IEA Member countries to release emergency oil stockpiles again because supplies have risen over the summer, the new head of the IEA said. “I don’t think there is any reason to do that given the present situation,” said Maria van der Hoeven, conducting one of her first press interviews since taking office on Sept. 1. The IEA coordinated the release of 60 million barrels of oil in June to offset lost supplies from Libya. It was the third use of reserves in the agency’s history.

After Germany’s move to exit from nuclear energy it will be more difficult to become Europe’s green-energy champion if the country will rely more on coal for its energy needs. “It’s not impossible,” said Laszlo Varro, Head of IEA Gas, Coal and Power Markets Division, “but if you take out nuclear energy, decarbonisation will be more expensive and more difficult.”

The preferred oil price level of the Organisation of the Petroleum Exporting Countries is creeping steadily higher, with possible harmful effects on the world economy. “There seems to have been a gradual ratcheting up of break-even prices within the OPEC community,” IEA Oil Industry & Markets Head David Fyfe told a conference in London on May 13.

Some older nuclear power plants in the European Union may be forced to end operation earlier than previously planned following the bloc’s stress tests, IEA Executive Director Nobuo Tanaka said. Speaking to reporters on the sidelines of an informal summit of energy ministers on Tuesday, May 3, in Hungary, he said the tests would have to be “severe enough” to ensure the safety of Europe’s nuclear plants and to convince the public to accept nuclear energy, which he called a “very important ”option in the European energy mix.

Speaking to reporters on the findings of the newly released Biofuels for Transport Roadmap, IEA Director of Sustainable Energy Policy Bo Diczfalusy said that advanced biofuels could start to compete on price with fossil fuels by 2030, unless production costs remain tied to oil prices. "In the long term, there is no vast cost difference between fossil fuels and biofuels," he said. "It could even be that the biofuels solution becomes much more economic." The report states that if conventional technologies become more efficient at converting crops, algae and other organic material into energy, biofuels could displace 27 percent of transportation fuels by 2050 and cut greenhouse gas emissions by 2.1 billion tons/year.

In a special report on energy by The Wall Street Journal, Richard Bradley, head of the energy efficiency and environment division, discusses the important role government policy can play in helping reduce energy consumption and save money. “Consumers can’t always see the benefits of energy efficiency to them,” Bradley said. “Governments should create efficient policies and make more information available.” The IEA recently launched its Energy Efficiency Policy recommendations, in which it provided tools to help governments save energy. To read the full article, please click here.