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IEA forecasts development of energy sector until 2035

On November 9, 2010 in London the International Energy Agency posted the World Energy Outlook, which is a long-term forecast of development of the world energy sector until 2035. The IEA assessment and analysis can be interpreted positively for producers of hydrocarbons, but some skepticism can be mentioned too. On one side the IEA points out that natural gas will become the most popular fuel in the future: the demand for gas by 2035 will surge by 44% (from 3 trillion to 4.5 trillion cu m). This should make the countries possessing large gas reserves happy, including Russia. There are positive expectations for oil producers - oil prices will surpass the $200 level by 2035 (however with inflation adjustment this will be equal to $113 in the 2009 prices).

On the other side, the IEA document stipulates possible active development of alternative energy sources. In 25 years production of electrical energy using renewables is expected to increase three-fold providing for approximately one third in the total electrical energy consumption in the world. Objectively speaking the probability of implementing this large-scale task does not seem to be high, as this will require huge state subsidies and readiness of companies and individuals to refuse quick profits generated by relatively cheap hydrocarbons for benefit of "long-term interests". Similar reasons have been quite effectively hindering development of electric cars, wind-power, bio fuels and other similar technologies that were expected to overtake hydrocarbons decades ago.

By Stanislav Mitrakhovich, NESF leading expert

 


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