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China, India May Sap World Energy

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By JANE WARDELL, The Associated Press

Published: November 8, 2007

LONDON - China and India must ramp up efforts to curb oil demand and reduce greenhouse gas emissions to avoid devastating consequences for the world's energy supply, the International Energy Agency said Wednesday.

The agency said China and India will account for about 45 percent of the increase in global primary energy demand through 2030, when the world's energy needs are expected to be much more than 50 percent higher than they are today.

The agency added that the two emerging economies' growing appetite for crude oil imports, predicted to quadruple by 2030, could create a supply crunch as early as 2015.

"How China and India respond to the rising threats to their energy security will also affect the rest of the world," the Paris-based agency said in its 2007 World Energy Outlook, released just a month before about 200 countries meet in Bali, Indonesia, to begin a new round of talks seeking a global deal on climate change policies.

The energy policy adviser for 26 member countries, including the United States, Canada, Australia and 19 European nations including Germany and Britain, said sustained economic growth in China and India was partly responsible for a worsening in the long-term outlook for energy supplies since its report last year.

The agency said that global carbon emissions would rise by 57 percent by 2030 on current trends, giving a global temperature increase of 5 to 6 degrees Celsius.

Even if governments put in place all of the "green" policies that are being considered, emissions would rise by more than a quarter over the same period, giving a 3-degree temperature lift.

The staggering pace of economic growth in China had made it responsible for 58 percent of the carbon emissions worldwide between 2000 and 2006.

China is due to overtake the United States as the world's biggest emitter of carbon dioxide this year - that's three years earlier than the agency had forecast in its annual report last year - while India will become the third-biggest emitter around 2015, according to IEA estimates.

The United States did not ratify the U.N. Kyoto Protocol, which set an average target for countries to cut greenhouse gas emissions by 5 percent below 1990 levels by 2012. The pact did not set emissions targets for China and India.

IEA Executive Director Nobuo Tanaka said that rapid economic growth in China and India was a "legitimate aspiration" that would improve the quality of life of more than 2 billion people and provide economic benefits for many other countries.

Tanaka said that developed countries should support those emerging countries through technology sharing and other incentives to avoid repeating the same mistakes as industrialized nations.

IEA Chief Economist Fatih Birol said China and India could put in place a number of measures to use energy more efficiently, particularly by making more use of renewable energy and nuclear power.

"For example, if China's efficiency standards matched the European ones for refrigerators and air conditioning, China would by 2015 save electricity equivalent to China's Three Gorges dam," he said.

The IEA also warned that an "abrupt escalation" in oil prices is possible before 2015 amid increased demand and shorter supply as oil output becomes more concentrated in a few Middle Eastern countries.

The agency said that crude oil import prices, a proxy for international oil prices, could rise to $108 in nominal terms by 2030 when it forecasts oil demand to have reached 116 million barrels per day. Oil demand was 84 million per day in 2006. On Wednesday, crude prices jumped to a new trading record above $98 a barrel, before settling closer to $96 in New York futures trading.

China's oil demand will more than double to 16.5 million barrels a day by 2030, led by a sevenfold increase in world energy demand, the agency said.

"Although production capacity at new fields is expected to increase over the next five years, it is very uncertain whether it will be sufficient to compensate for the decline in output at existing fields and meet the projected increase in demand," it said.

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