The International Energy Agency (IEA) announced on Wednesday that there is a possibility of growth in global oil and gas demand until 2050. This marks a shift from previous expectations of a rapid transition to cleaner fuels, influenced by U.S. criticism concerning its climate change focus.
According to the IEA’s annual outlook, the organization foresees challenges in meeting the global target of limiting the temperature increase to 1.5 degrees Celsius above pre-industrial levels to mitigate the severe impacts of climate change. The U.S. has urged the IEA to concentrate more on clean energy policies, especially during the Biden administration, which anticipated a peak in global oil demand within this decade and recommended halting investments in new oil, gas, and coal projects to achieve net-zero emissions by mid-century.
The IEA’s projections under a current policies scenario suggest a rise in oil demand to 113 million barrels per day by 2050, reflecting a 13% increase from 2024 levels. Additionally, global energy demand is expected to surge by 90 exajoules by 2035, representing a 15% uptick from current consumption.
The IEA clarified that its scenario considers existing government policies rather than ambitions to meet climate targets. IEA head Fatih Birol emphasized that the scenario was adjusted to mirror the diverse energy decisions made by governments globally.
Experts have mixed opinions on the IEA’s report. Rachel Cleetus of the Union of Concerned Scientists commended the progress in renewable energy and energy efficiency but highlighted the necessity for a rapid phase-out of fossil fuels to align with climate goals. On the other hand, Wilmar Suarez from Ember criticized the IEA for underestimating the growth of renewable energy, especially in developing nations.
The IEA report also highlighted a significant increase in final investment decisions for new liquefied natural gas (LNG) projects, with around 300 billion cubic meters of new annual LNG export capacity expected by 2030. The global LNG market is projected to expand to 1,020 bcm by 2050, primarily driven by rising demand in the power sector due to data center and artificial intelligence (AI) growth.
Global investments in data centers are poised to reach $580 billion in 2025, surpassing the annual global spending on oil supply. The report outlines a scenario aiming to achieve net-zero global energy emissions by 2050, although it indicates that the world is currently on track to exceed the 1.5-degree Celsius warming goal set during the Paris climate talks in 2015.
