1.3.1.3 Energy security
With international oil prices fluctuating around 70 USD per barrel (Brent Crude in the first half of 2006; EIA, 2006a) and with prices of internationally traded natural gas, coal and uranium following suit, concerns of energy supply security are back on the agenda of many public and private sector institutions. Consequently, there is renewed public interest in alternatives to fossil fuels, especially to oil, resulting in new technology initiatives to promote hydrogen, biofuels, nuclear power and renewables (Section 1.3.1.3). Higher oil prices also tend to open up larger markets for more carbon-intensive liquid fuel production systems, such as shale oil or tar sands. However, first and foremost, energy security concerns tend to invigorate a higher reliance on indigenous energy supplies and resources. Regions where coal is the dominant domestic energy resource tend to use more coal, especially for electricity generation, which increases GHG emissions. In recent years, intensified coal use has been observed for a variety of reasons in developing Asian countries, the USA and some European countries. In a number of countries, the changing relative prices of coal to natural gas have changed the dispatch order in power generation in favour of coal.
Energy security also means access to affordable energy services by those people – largely in developing countries – who currently lack such access. It is part and parcel of sustainable development and plays a non-negligible role in mitigating climate change. Striving for enhanced energy security can impact GHG emissions in opposite ways. On the one hand, GHG emissions may be reduced as the result of a further stimulation of rational energy use, efficiency improvements, innovation and the development of alternative energy technologies with inherent climate benefits. On the other hand, measures supporting energy security may lead to higher GHG emissions due to stepped-up use of indigenous coal or the development of lower quality and unconventional oil resources.
1.3.2 Future outlook
1.3.2.1 Energy supply
A variety of projections of the energy picture have been made for the coming decades. These differ in terms of their modelling structure and input assumptions and, in particular, on the evolution of policy in the coming decades. For example, the IEA’s World Energy Outlook 2006 reference case (IEA, 2006a) and the the International Energy Outlook of the Energy Information Agency in the USA reference case (EIA, 2006b) have both developed sets of scenarios; however, all of these scenarios project a continued dependence on fossil fuels (see Chapter 4 for past global energy mixes and future energy demand and supply projections). Should there be no change in energy policies, the energy mix supplied to run the global economy in the 2025–2030 time frame will essentially remain unchanged with about 80% (IEA, 2006a) of the energy supply based on fossil fuels. In other words, the energy economy may evolve, but not radically change unless policies change.
According to the IEA and EIA projections, coal (1.8–2.5% per year), oil (1.3–1.4% per year) and natural gas (2.0–2.4% per year) all continue to grow in the period up to 2030. Among the non-fossil fuels, nuclear (0.7–1.0% per year), hydro (2.0% per year), biomass and waste, including non-commercial biomass (1.3% per year), and other renewables (6.6% per year) also continue to grow over the projection period. The growth of new renewables, while robust, starts from a relatively small base. Sectoral growth in energy demand is principally in the electricity generation and transport sectors, and together these will account for 67% of the increase in global energy demand up to 2030 (IEA 2006a).