Energy Agency Predicts High Prices in Future
The world can expect energy prices to continue their generally upward spiral in the years ahead if global energy policies remain the same, the International Energy Agency (IEA) reported this week.
Rapid economic development in China and India, coupled with relatively consistent energy use in industrialized nations, will likely strain the world’s ability to meet a projected rise in energy demand of some 1.6 percent a year until 2030, the agency predicted Wednesday in its annual World Energy Outlook report [PDF].
The IEA significantly increased its projections of future oil costs in this year’s report due to the changing outlook for demand and production costs. It now expects crude oil to average $100 per barrel over the next two decades and more than $200 per barrel in 2030, in nominal terms. Last year’s forecast estimated that a 2030 barrel would amount to only $108.
“One thing is certain,” said Nobuo Tanaka, the IEA’s executive director, in a prepared statement. “While market imbalances will feed volatility, the era of cheap oil is over.”
Oil and natural gas resources are expected to supply the world for more than 40 years at current consumption rates. But the report expressed concern that rising world energy demands will outpace production.