Grabbing energy efficiency opportunities will give the world more time to thrash out a climate pact: IEA
The huge untapped potential saving from more efficient use of energy and a resurgence of US energy production are two key highlights from this year's World Energy Outlook report compiled by the International Energy Agency.
The ''disappointingly slow progress'' over the past decade towards more productive energy use means countries are paying a price in economic growth, energy security and the environment, the agency said.
''We consider it [potential savings] as a hidden fuel and a key option in the hands of policymakers,'' said Marie van der Hoeven, the IEA's executive director.
For instance, the growth in global energy demand to 2035 could be halved through efficiency measures, saving the equivalent of 13 million barrels of oil a day, or the sum of Norway and Russia's oil output.
The building sector has grabbed just a fifth of the potential savings from better insulation and other steps to limit energy use, while industry can more than double its achieved savings, the IEA said. The estimated $US11.8 trillion investment required would be more than offset by lower fuel costs alone of $US17.5 trillion.
By making efficient energy use a priority, nations would be able to extend the period beyond which rising greenhouse gas emissions mean the world is locked into global warming of at least 2 degrees above pre-industrial levels.
That extension on the current projections for emission growth would be for just five years but give countries more time to negotiate a path to start reducing carbon pollution, Ms van der Hoeven said.
''It would delay this [emissions peak] until 2022,'' she said. ''That means buying time to secure a much-needed global climate agreement.''
International talks on a global pact to begin in 2015 start in Doha, Qatar, later this month.
Global fossil fuel subsidies rose 30 per cent in 2011 to $US523 billion - six times the amount funnelled into renewable energy, the IEA estimates. Part of the increase came in Middle Eastern countries keen to curb energy price increases that might stoke more civil unrest.
The shale gas boom in the US is helping reshape the global energy map. The US could reclaim the top slot in global oil production by 2020, retaking the mantle it lost in 1976 to Russia and then Saudi Arabia.
''What's happening there will be felt globally,'' said Mrs van der Hoeven, noting that North America may become a net oil exporter by 2030. ''This accelerates the switch in direction of international oil trade towards Asia, putting a focus on the security of the strategic routes that bring Middle East oil to Asian markets,'' the report states.
Australia was fortunate to be richly endowed with energy resources and to be ''Asia's next-door neighbour'', Mrs van der Hoeven said.
“But this is not without uncertainties: Australia’s export levels and prices received may be affected by the adoption of climate change policies, small changes in Asian countries’ rate of energy demand growth, and (the) development of domestic energy sources, such as shale gas, by Asian countries,” she said.
China, now the world's largest coal importer, is likely to cut imports from 2015 as domestic supply picks up. Indian demand would fill some of that void. It could emerge as the largest coal importer by 2020.
Global oil prices, meanwhile, are likely to hinge on rapid expansion of oil production in Iraq.
On current projections, Iraq will almost double current crude output to 6 million barrels per day by 2020 and overtake Russia as the second-biggest oil exporter by the 2030s, the IEA said.
A failure to meet those goals, though, would see oil prices at least $US5 a barrel higher by 2020 and $US15 (in current prices) by 2035, the report said.