The International Energy Agency’s (IEA) World Energy Outlook 2012 generated a mostly enthusiastic response, rather than criticism, regarding its prediction that the United States will overtake Saudi Arabia as the world’s biggest oil producer by 2020 and become virtually energy independent by 2035.
Fuel Freedom Foundation co-founder Eyal Aronoff takes an in-depth look at the claims made by the IEA in his latest article “Why is the IEA Report Considered Good News?” In the article, featured on the well-respected Real Clear Energy news site, Aronoff suggests that it may be wise to hold off on celebrating the report until thoroughly reviewing the claims.
Aronoff highlights the second paragraph of the recent IEA report, which states:
“Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable basis.”
Aronoff argues that the report indicates “our surge in unconventional oil may only leave us even more dependent on OPEC.”
Aronoff explains that “the underlying problem, as the IEA continually points out, is that oil has no real competition in the transportation market. As developing countries expand their use of cars and trucks, this can only drive oil prices higher.”
“Read closely, World Energy Outlook 2012 is filled with such caveats,” Aronoff reminds readers.
The Fuel Freedom Foundation is right on point as the IEA report states:
“Growth in oil consumption in emerging economies, particularly for transport in China, India and the Middle East, more than outweighs reduced demand in the OECD, pushing oil use steadily higher.”
Although Aronoff is critical of the claims made by the report, he states that the IEA report is well-guided in emphasizing the advantages of natural gas:
“Natural gas is the only fossil fuel for which global demands grow in all scenarios, showing that it fares well under different policy conditions; but the outlook varies by region…in the United States, low prices and abundant supply see gas overtake oil around 2030 to become the largest fuel in the energy mix.”
Aronoff asserts, “Converting this gas to liquids – such as methanol, which can be substituted for gasoline in cars and trucks – would enable us to achieve the independence from foreign oil that the IEA so optimistically predicts. It seems worth a try.”
Read more about Eyal Aronoff’s vision here