HOUSTON — More than a trillion dollars in annual investments to find new fossil fuels will be needed for the next two decades to avoid an energy crisis that could choke the global economy, the International Energy Agency said Wednesday.
The warning from the Paris-based agency comes at a time when major oil companies are pulling back investments amid the most severe economic downturn in a generation. The IEA stressed that it’s essential for the world’s energy companies to continue investing in new projects despite tumbling crude prices. The total potential tab through 2030: $26.3 trillion.
“While the situation facing the world is critical, it is vital we keep our eye on the medium- to long-term target of a sustainable energy future,” IEA executive director Nobuo Tanaka told reporters at the release of its annual World Energy Outlook report in London.
There are growing fears that the simultaneous plunge in oil prices and a pullback in spending on exploration and production will result in another massive energy-price spike.
“While macroeconomic conditions have lowered oil prices for the moment, there is nothing in the underlying economic picture that suggests this slowdown will be long-lived, maybe a year or more out,” said former Secretary of Energy Spencer Abraham.
“There was not enough production even when we were in triple-digit oil markets over the summer, and there’s going to be a lot of pressure on the system when economies recover.”
Tanaka said state-run national oil companies — like those in Venezuela and Saudi Arabia — are projected to account for about 80 percent of the increase of oil and natural- gas production through 2030.
Producers and refiners, large and small, are delaying and even canceling some work as they adjust to oil prices that have fallen more than 60 percent since peaking in July above $147.
Multinational oil giants such as Shell and Exxon Mobil are also finding it increasingly difficult to gain access to potential new sources of fossil fuels.
