The International Energy Agency has released its World Energy Outlook 2008. The full report costs a bundle (€135 for a paper version, €108 for a PDF version), but the Executive Summary and Fact Sheets are available for free.

The report concludes that business as usual is not an option:

“The Reference Scenario, characterised by rising energy prices, increased import dependence and rising greenhouse-gas emissions, is unsustainable – environmentally, economically and socially. Achieving a more secure, low-carbon energy system calls for radical action by governments at national and local levels, and through participation in co-ordinated international mechanisms.”

The 2008 report remains wildly optimistic, projecting that oil supplies will reach 104 mb/d by 2030, of which Saudi Arabia is projected to supply 15.6. As Rembrandt points out at The Oil Drum, the IEA’s model is flawed because assumed economic growth is one of the assumptions driving the model. By taking economic growth for granted, the outcome of the model will always show growing energy demand for decades into the future. This scenario does not resemble the reality of a world in which fossil fuel supplies are limited. I think Rembrandt’s point can be summed up thusly: if it can’t happen, it won’t happen. The IEA needs a reality check.

The Oil Drum (which is posting a multi-part commentary on the report) has posted this graph showing where the supplies are expected to come from:

click to view image

The Fact Sheets contain this sobering statement:

“Even if oil demand was to remain flat to 2030, 45 mb/d of gross capacity – roughly four times the current capacity of Saudi Arabia – would need to be built worldwide by 2030 just to offset the effect of oilfield decline.”

Note that this assumes Saudi capacity is currently 11.25 mb/d. The most crude Saudi Arabia has ever produced is 9.7 mb/d in July 2008 (the Saudi all-liquids peak was 11.1 mb/d in early 2006). Currently, global production of liquid fuels is about 85 mb/d. Supplying the IEA-projected increase plus offsetting depletion would thus require 6.6 Saudi Arabias producing at the kingdom’s maximum 2008 output.

The IEA’s picture of future supplies also fails to take into account the energy content or the net energy content of future supplies.  Natural gas liquids have only about 2/3 of the energy content of oil. And as the larger, easier to access and extract oil fields are depleted the net energy yield from smaller, more energy-intensive sources result in less net energy. More and more of our energy will be expended to find and extract more energy, rather than being put to other useful purposes.

The IEA concedes that its supply projections may not be realized:

“In view of the current financial crisis, there are growing doubts about whether all of this capacity will be forthcoming.”

What are the implications for climate change?

“The projected rise in emissions in the Reference Scenario, in which no change in
government policies is assumed, puts us on a course of doubling the concentration of those gases in the atmosphere to around 1,000 parts per million of CO2-equivalent by the end of this century. This would lead to an eventual global temperature increase of up to 6°C.”

The IEA compares a 550 Policy Scenario, in which greenhouse gas concentration is stabilized at 550 ppm CO2-equivalent and temperature rises by about 3°C, with a 450 Policy Scenario which results in a 2°C increase. The two policy scenarios have a similar emissions trajectory until 2020, but emissions fall much more sharply after 2020 in the 450 Policy Scenario. As Joseph Romm points out at Climate Progress, 350 ppm is a superior long-term target to minimize the risk of an ice-free planet and that the countless amplifying carbon cycle feedbacks mean 550 probably takes you to 1000 ppm and 6°C. James Hansen and others warn that even 450 will set off feedback effects that lead to runaway global warming.

The fact sheets point out that the power generation and transport sectors contribute over 70% of the projected increase in world energy-related CO2 emissions to 2030 – and that three-quarters of the projected output of electricity worldwide in 2020 (and more than half in 2030) comes from power stations that are already operating today. The implications are stark: addressing our climate predicament will require shutting down existing coal-fired power plants - and not building any new ones.