IEA Unveils World Energy Outlook 2014: Looking Ahead to 2040

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: In observance of the Thanksgiving holiday, The Climate Post will not circulate next week. It will return on December 4.

The International Energy Agency (IEA) has released its World Energy Outlook (WEO) 2014 report, which for the first time provides energy trend projections through the year 2040. Among the key challenges in the next two and a half decades is, a 37 percent rise in global energy demand, driven mainly by emerging markets in Asia, Africa, the Middle East and Latin America. Asia will account for 60 percent of global growth in demand, and by early 2030s, China may surpass the U.S. as the world’s largest oil consumer.

“The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers,” according to the WEO report.

The IEA projects that global oil consumption will rise from 90 million barrels a day in 2013 to 104 million barrels a day in 2040, requiring a $900 billion investment in oil and gas development by the 2030s.

Overall use of coal is projected to decrease slowly in demand, while use of renewable energy from wind, solar and hydropower will grow. The IEA anticipates renewables will saturate one-third of global energy demand by 2040.

CO2 emissions are expected to grow by one-fifth by 2040, which puts the world’s temperature well on track to rise to 3.6 degrees Celsius by the end of this century, increasing the risk of droughts, rising sea levels, damaging storms and mudslides.

According to IEA projections, limiting global temperature rise to 2 degrees Celsius deemed by U.N. as the level necessary to avoid dangerous changes would require the world to ramp up low-carbon energy investments by four times their current levels—bringing annual global investment up to approximately $1 trillion.

On the domestic front, a majority of Americans support stricter regulations on carbon emissions, according to a new poll by Yale’s Project on Climate Communication. Further, two thirds of those polled (1,275 adults) support limits on carbon dioxide emissions even after being told such measures would raise power prices.

U.S. Pledges $3 Billion to UN’s Green Climate Fund

On the heels of its climate deal with China, the U.S. announced its intent to contribute $3 billion to the United Nation’s Green Climate Fund, which was established in 2013 to provide support to developing countries in reducing greenhouse gas emissions. The “game-changing pledge,” made by President Obama on the eve of the G-20 Summit in Brisbane, Australia, last week, makes the U.S. the fund’s largest contributor. The Obama administration has not specified whether its pledge will come from existing sources of funding or new appropriations from Congress—a strategy that could face stiff resistance from Republican lawmakers.

“The contribution by the U.S. will have a direct impact on mobilizing contributions from the other large economies,” said Hela Cheikhrouhou, executive director of the Green Climate Fund. “The other large economies—Japan, the U.K.—have been watching to see what the U.S. will do.”

It did not take long for Japan to follow suit with a $1.5 billion pledge to the fund. To date, the U.N. has received pledges from 13 countries totaling $7.5 billion—three-quarters of its $10 billion goal. Rich countries meet in Berlin to further discuss the 2014 goal where pledges reached $9.3 billion.

Panel Approves Rules for Unconventional Oil and Gas

After several years of heated debate, the North Carolina Mining and Energy Commission approved a detailed list of regulations to guide companies interested in securing unconventional oil and gas permits in the state. The rules were unanimously approved by commission members after review of approximately 217,000 public comments by 30,000 groups and individuals.

One of the rules revised by the commission in light of those comments calls for inclusion of leak detection systems and continuous monitoring of liners for open pits where fluids such as drilling waste are stored.

The approved regulations will be reviewed in December by the NC Rules Review Commission and in January by the state legislature. The commission has identified a number of areas for continued work, including authority to stop a company’s work.

“Just because we don’t have that stop-work authority doesn’t mean we can’t stop the work on site,” said Amy Pickle, vice chair of the commission and director of the State Policy Program at Duke University’s Nicholas Institute for Environmental Policy Solutions. “If something is going wrong, there’s injunctive authority, there is the ability to go to court to require them to stop working, there’s an ability through inspections and monitoring to revoke that permit.”

Across the country, unconventional oil and gas issues continue to be highly polarizing, as measures passed during mid-term elections revealed. A development ban was passed by the town of Denton, the Texas city where the earliest exploration began. In a compromise plan, limited development was approved by the U.S. Forest Service for the George Washington National Forest in Virginia. A 2011 plan draft would have allowed drilling in much of the forest’s 1.1 million acres.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

U.S., China Reach Climate Deal

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

Two nations that account for more than one-third of all greenhouse gas emissions reached a climate deal. The United States will accelerate the pace of its net greenhouse gas emissions reductions from 17 percent below 2005 levels by 2020 to 26–28 percent by 2025. China will increase the non-fossil fuel share of all its energy to approximately 20 percent—roughly a fifth of its energy supply—by 2030.

“This is a major milestone,” said President Obama. “This is an ambitious goal, but this is an achievable goal. We have a special responsibility to lead the world effort to combat global climate change.”

The deal was reached after several rounds of talks between the two nations. At a joint press conference where the deal was announced, Obama indicated that he hoped the deal would “encourage all major economies to be ambitious and all developed and developing countries to work across divides” so that an agreement could be reached on climate change targets in Paris next year.

Chinese President Xi Jinping had similar comments.

“We agreed to make sure international climate change negotiations will reach agreement as scheduled at the Paris conference in 2015 and agreed to deepen practical cooperation on clean energy, environmental protection and other areas,” he said. The deal calls for China to deploy an additional 800–1,000 gigawatts of nuclear, wind, solar and other zero-emission energy sources—a capacity greater than that of all the coal–fired power plants in China and nearly equal to total electricity generation in the United States. Among other initiatives on which the two countries agreed: Expand joint clean energy research and development, advance major carbon capture and storage demonstrations, enhance cooperation on hydrofluorocarbons, creating a federal framework for cities in both countries to share experiences and best practices for low-carbon economic growth and adaptation to climate change impacts, and boosting trade in “green” goods, including energy efficiency technology and resilient infrastructure.

China is still largely poor, but its economy and energy use is still growing rapidly. At the same time, China is combating severe air pollution.

“Just the fact that they agreed to cap their emissions in the future is a significant development,” said Brian Murray, director of the Environmental Economics Program at Duke University’s Nicholas Institute for Environmental Policy Solutions. “As important as these two countries are, they can’t get the job done working alone. But without them, the world can’t get the job done.”

Will China’s pledge keep the climate from warming 2 degrees Celsius above pre-industrial levels—a scientific benchmark for averting dangerous climate impacts? A number of scientists say it falls short of what is needed to hit that target.

Congressional Republicans are skeptical of the deal. “As I read the agreement, it requires the Chinese to do nothing at all for 16 years, while these carbon emission regulations are creating havoc in my state and other states across the country,” said Mitch McConnell, who is in line to become the new Senate majority leader in January.

Grid Reliability In Question

New analysis by the North American Electric Reliability Corporation (NERC) discusses the potential impacts of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan on grid reliability (subscription). Specifically, NERC points to rapid transition as a factor in damaging capacity margins, increasing the difficulty of maintaining power quality and leaving the grid vulnerable to extreme weather.

The EPA said the report on the impact of the Clean Power Plan, which would reduce carbon emissions from existing fossil fuel–fired power plants, offered no new analysis and overlooks new capacity that will be built by 2020.

“The world is going to change regardless of this new proposed rule, and we know new capacity is going to build and NERC just ignores that completely,” a staff member in the EPA’s Office of Air and Radiation told Greenwire (subscription). “There are a lot of assertions and claims in the report that aren’t really substantiated by any particular analytics they mention, or supported by a deeper look into the issues.”

A U.S. Department of Energy study, due out in 2015, will examine the rule’s impact on utilities, according to The Hill.

OPEC Reduces Forecast Amid Low Oil Prices

In its annual World Oil Outlook, the Organization of the Petroleum Exporting Countries (OPEC), which supplies a third of the world’s crude oil, cut demand forecasts to 28.2 million barrels per day in 2017—a 14-year low. The 2014 report estimates approximately 600,000 barrels a day less than the 2013 report and 800,000 below the amount required this year.

The report further states that there will be a “small decline in real values” over this decade, together with a “constant nominal price” of $110 a barrel between now and 2020.

Booming U.S. oil production has put domestic output on the same level as that of energy giants Russia and Saudi Arabia, but oil prices are on the decline. UT San Diego News says the overall economy may still win, noting that “we still consume far more petroleum—in the form of gasoline and thousands of related products—than we pump from the ground. This means import costs are falling, too.”

Despite the decline in oil prices—to some $77 a barrel—companies like BP and Total are continuing to invest in major projects.

“We are not changing our investment decisions because of this [current price],” said Bob Dudley, BP chief executive.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Climate Change Risks, Impacts Focus of Reports

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

The United Nations Intergovernmental Panel on Climate Change (IPCC) released its Fifth Assessment Synthesis Report warning that greenhouse gas levels are at the highest they have been in 800,000 years.

“We have little time before the window of opportunity to stay within the 2C of warming closes,” said IPCC chairman Rajendra Pachauri. “To keep a good chance of staying below the 2C, and at manageable costs, our emissions should drop by 40 to 70 percent globally between 2010 and 2050, and falling to zero or below by 2100.”

To have a 66 percent chance of limiting total average warming to the U.N.-set threshold of less than 2 degrees Celsius relative to preindustrial levels, the world’s population can emit no more than one trillion tons of carbon dioxide. But we’ve already emitted more than half that much.

The report includes conclusions of three previous IPCC reports on the science, impacts of climate change and on ways to address it.

One key finding: It’s “extremely likely” that humans are contributing to climate change—mainly through the burning of fossil fuels. There is evidence—through sea-level rise, shrinking glaciers, decreasing snow and ice cover and warmer oceans—that human-caused climate change is happening now.

The report indicates that “continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts.” In fact, if we stick to our current path, we could see 3.7 to 4.8 degrees Celsius of warming by the end of the century.

The report is timed just ahead of international negotiations in Lima, Peru, set to take place in December and intended to establish parameters for an emissions reduction agreement that negotiators may sign in Paris next year.

This piggy backs on another recent report, Climate Change and Environmental Risk Atlas 2015, provides comparable risk data for 198 countries across 26 climate-related issues. Echoing studies by groups such as the Pentagon, the report finds climate change and food insecurity could lead to increased civil unrest and violence in 32 countries assessed in the next 30 years. The countries include Sierra Leone, South Sudan, Nigeria, Chad, Haiti, Ethiopia and the Philippines. All 32 depend on agriculture; 65 percent of their combined working population are employed in farming.

“I think the most surprising thing [the new data shows] is how closely linked food security and climate change are,” said James Allan, associate director of global analytics firm Maplecroft. “We were not expecting this level of linkage.”

New Cause for Arctic Warming?

A new mechanism may be a large contributor to warming in the Arctic according to a new study in Proceedings of the National Academy of Sciences that looked at a long-wavelength region of the electromagnetic spectrum called far infrared.

“Our research found that non-frozen surfaces are poor emitters compared to frozen surfaces,” said lead author Daniel Feldman. “And this discrepancy has a much bigger impact on the polar climate than today’s models indicate. Based on our findings, we recommend that more efforts be made to measure far-infrared surface emissivity. These measurements will help climate models better simulate the effects of this phenomenon on the Earth’s climate.”

Through their simulations, researchers revealed that far-infrared surface emissions have the biggest impact on the climates of arid high-latitude and high-altitude regions. In the Arctic, open oceans were found to hold more far-infrared energy than sea ice, resulting in warmer oceans, melting sea ice and a 2-degree Celsius increase in the polar climate.

The study’s release follows a prediction by one of the leading authorities on the physics of the northern seas who claims the Arctic Ocean may be ice-free by the year 2020.

White House Releases Federal Agency Climate Plans

The White House released a series of reports documenting 38 federal agencies’ vulnerabilities to climate change and their plans to reduce their greenhouse gas emissions, save energy, cut waste and save taxpayer dollars.

“Under President Obama’s leadership, federal agencies have already made significant progress in cutting carbon pollution, improving energy efficiency, and preparing for the impacts of climate change,” said Mike Boots, who leads the White House Council on Environmental Quality. “These agency climate plans underscore the administration’s commitment to leading by example throughout the federal government so we can leave behind a planet that is not polluted and damaged and protect our ability to provide the vital services American communities depend on.”

Among some of the findings by agency:

  • The U.S. Department of Agriculture estimates an increase by 2050 of up to 100 percent in the number of acres annually burned by wildfires.
  • The National Aeronautics and Space Administration (NASA) not only sees rising sea levels and extreme storms as a major risk but believes that climate change could hinder its ability to get to space. It writes that “Many agency assets—66 percent of assets when measured by replacement value—are within 16 feet of mean sea level and located along America’s coasts, where sea level rise and increased frequency and intensity of high water levels associated with storms are expected.”
  • The U.S. Department of Health and Human Services outlines risks that include more frequent or worse extreme heat events—one weather-related cause of death in the United States.

The reports stem from a five-year process that began with an executive order by President Obama in 2009. The order called on the federal government to reduce its emissions and become more energy efficient and sustainable. According to separate documents, measures to fulfill the order have resulted in a 17 percent decrease in emissions by the federal government since Obama came into office.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.