IEA: $10.5 TRILLION Is Needed To Avert An Energy Disaster

The IEA has just released its 2009 world energy outlook.

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A key point the group makes is that the financial crisis has led to a plunge in energy investment — both in renewable and in the discovery of new fields — potentially creating significant economic and security issues down the road.

Compared to the Reference Scenario, cumulative incremental investment of $10.5 trillion is needed in the 450 Scenario in low-carbon energy technologies and energy efficiency by 2030. In addition to avoiding severe climate change, this cost is largely offset by economic, health and energy-security benefits. Energy bills in transport, buildings and industry alone are reduced by $8.6 trillion globally over the period 2010-2030. “The challenge for climate negotiators is to agree on instruments that will give the right incentives to ensure that the necessary investments are made and on mechanisms to finance those investments in non-OECD countries,” said Mr. Tanaka and added: “In our 450 scenario in OECD countries the carbon price reaches $50 per tonne of CO2 in 2020 and $110 in 2030.”

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China and India's share of energy consumption is obviously set to soar

As a percentage of GDP, China will spend more on energy imports than we do

For the first time, oil and gas CAPEX has fallen

And established, existing fields are going to collapse

Meanwhile, OPEC production will only edge up slightly.

So look for a huge explosion in gas and dirty coal

Even the IEA says it: The shale era is here!

Watch out of world natural gas production collapses

The bottom line

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