World Faces Major Challenge in Meeting Energy Demand

In remarks to the 2010 World Energy Congress in Montreal, Daniel Yergin, chairman of consultancy IHS CERA, said the world faces a major challenge of meeting substantial growth in energy demand.

Yergin cited the new IHS CERA Energy Scenarios, which show world demand increasing by 32 to 40 percent over the next 20 years.

“This demand growth will require investment measured in many trillions of dollars,” he said, “and it will pose a dramatic challenge to all the energy industries.”

“Rising incomes and large populations in emerging markets will be the growth engine for world energy demand in the years ahead. It is very sobering to realize that much of the infrastructure that will be needed in 2030 to meet the energy needs of a growing world economy is still to be built,” he said.

World oil supplies will continue to grow, but oil’s share of the overall energy mix will decline. “Demand may pose many puzzles,” Yergin said, “but one thing is clear. The growth in electricity will outpace the overall growth in energy as societies depend more and more upon electricity. This raises the question of future fuel choice for generating additional electricity supplies.”

Yergin noted that one of the most significant changes of the last few years is the emergence of inexpensive, abundant shale gas.

“The development of shale gas has been the single most significant energy innovation so far this century,” he said. “The availability of that gas will provide greater flexibility in meeting the fuel needs of the electric power industry.”

Source: IHS Cera