Paris: Despite four years of high prices and warnings about climate change, a new report on Monday (9 July) predicted that world oil demand would rise faster than previously expected over the next five years while production slips, threatening a supply crisis.
In the report, the International Energy Agency (IEA), which is based in Paris and advises 26 industrial nations, said that global oil demand would rise by an average of 2.2% a year from this year to 2012, up from a forecast in February of 2% annual growth from 2006 to 2011.
The share of world oil consumption represented by the developing world, including emerging industrial economies, will rise to 46% of global demand by 2012 from 42 %.
“Demand is growing and as people become accustomed to higher prices, they are starting to return to their previous trends of high consumption,” said Lawrence Eagles, head of oil markets analysis at the energy agency, which is linked to the Organization for Econonic Cooperation and Development (OECD), also based here. “It’s important that we have more investment and a greater emphasis on energy efficiency.”
The pressures on fuel supplies are growing because booming Asian economies are using more fuel to power their manufacturing industries, including the production of a rising number of automobiles. Rapid growth in petrochemical industries and the spread of low-cost airlines are also lifting demand.
Amid these demand factors, there is a scarcity of refining plants and the personnel to operate them. Supplies are also a concern because of deteriorating output from some countries outside the Organization of the Petroleum Exporting Countries (OPEC), the grouping of many of the biggest producers.
The world “needs more than three million barrels per day of new oil each year to offset the falling production in the mature fields outside of OPEC,” Mr. Eagles said.
Other analysts said that behind the overall numbers were signs that energy habits were moving in two directions. In developed countries, and especially the European Union, obligations agreed to by governments to conserve energy and use renewable sources of energy are expected to ease pressure on oil supplies.
But that trend is being offset in developing nations. While they still use far less energy per capita, they are making goods for rich buyers elsewhere and are increasingly adopting heavily energy-consuming lifestyles that include the use of cars, refrigerators and air-conditioners.
Colette Lewiner, who monitors energy at the Capgemini consultancy in Paris, said, “My view is that energy consciousness will figure strongly in Western countries and could contribute to demand decrease, but it’s not at all sure that we will see the same trends in China and India.”
Mr. Eagles welcomed progress in Europe and Asia, where governments are mandating more efficient cars. He said the “United States is very clearly coming to the point where there would be a landmark change in fuel-efficiency policies.”
He also said that stepped-up investment in refining capacity could help reduce petroleum prices over the next three years, but that those effects were likely to be short-lived.
Beyond 2010, Mr. Eagles warned, “tightness in OPEC’s spare capacity will reassert itself.” And by 2012, he said, there would either have to be limits on demand or additional supplies to avoid further price increases. [Crude oil for August delivery settled in New York late Monday at $72.19 a barrel.]
Mr. Eagles said that biofuels, a renewable source of energy produced from plants, were unlikely to be a quick solution. Factories to make biofuels are becoming common, but agricultural products that are the basis for the fuels are getting scarcer. Prices of this feedstock — including corn, sugar, soybeans, wheat and palm oil — have risen sharply, making the fuel production increasingly expensive.
By 2012, the agency said, biofuels will still account for only 2% of global energy supplies.