The International Energy Agency has issued a warning that failure to invest globally in trillions for new-energy exploration in the next 20 years could lead to a fresh global energy crisis.
The IEA says that despite worldwide efforts to reduce energy usage, consumption of crude oil, for example, is forecast to climb from today's 85 million barrels per day by more than 20 percent to 106 million barrels per day by 2023. The agency urged energy giants - and the Organization of the Petroleum Exporting Countries (OPEC) - not reduce expenditures in oil exploration and production in the face of plunging crude-oil prices.
The IEA said that lack of investment to assure increased output in the coming decades could lead to another - or a series of - energy-price spike of a grand scale. An Associated Press story quoted former U.S. Energy Secretary Spencer Abraham as saying, "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.
"There was not enough production even when we in triple-digit oil markets over the summer," he continued, "and there's going to be a lot of pressure on the system when economies recover."
The "system," however, may find scant sympathy from the average fuel consumer. OPEC, for one, is warning that it will curtail the kind of exploration-and-production investment the IEA advocates if the price of oil doesn't "stabilize" - presumably at a price somewhere well in excess of current $60-per-barrel levels, well less than half of the $147/barrel summer high.
But consumers already have markedly changed their driving habits and their vehicle choices in the wake of this past summer's exorbitant gasoline and diesel prices, and President-elect Barack Obama and other political leaders are promising initiatives to lessen the nation's need for fossil fuels.
In light of the global economic crisis, several large energy companies already have announced cutbacks or outright cancellation of development programs for the rest of this year and for 2009, and some analysts are predicting the industry's effective moratorium on capital spending could last into 2010 or beyond.
The IEA also revised upwards its projections for the price for oil in the next 20 years, calling for an average of $100 per barrel through 2015, and a constant-dollar price of $120 per barrel in 2030, or slightly more than $200 per barrel in nominal measure.
Those figures don't sound so awful after this summer's peaks, but they represent a substantial revision of the agency's forecast from last year, which pegged the constant-dollar price of oil in 2030 at just $62 per barrel.