© Stocksak. FILEPHOTO: Dr. Fatih Birol Executive Director of International Energy Agency in Singapore October 25, 20,22. REUTERS/Isabel Kua/File Photo
By Noah Browning
LONDON (Stocksak), – The global energy landscape will be transformed for decades by the drop in Russian fossil fuel exports following the invasion of Ukraine this year, according to the International Energy Agency (IEA).
The IEA’s annual World Energy Outlook acknowledges that there has been a reduction in Russian oil and coal supplies, but it is still aiming to preserve an environment in which no new fossil fuel projects are necessary.
According to the IEA’s report, the global energy crises is causing long-lasting and deep changes that could speed up the transition towards a more sustainable and secure energy system.
Fatih Birol (IEA executive director) stated that Russia’s invasion has impacted energy markets and policies for many decades.
“The energy market is changing dramatically before our eyes. Birol said that the international response of governments will make this a landmark and definitive turning point in favor of a cleaner, more reliable, and more affordable energy system.
The short-term gaps caused by Russia’s reduction in fossil fuel supplies will need to be filled from other sources.
The best projects are those with “short lead-times” that quickly bring oil supplies to market without locking into dependency.
Global investment in clean energy is expected to increase to more than $2 Trillion per year by 2030, an increase of half the current levels. In addition, “international energy markets will undergo a profound reorientation by 2020s as countries adjust their energy flows to the breakup with Russia-Europe (energy),” the IEA stated.
Last year, the IEA shocked the energy industry by stating that lower demand and a rise of low-emission fuels rendered new oil and gas fields beyond 2021 unaffordable in its most climate-friendly Net Zero emissions scenario.
The IEA stated that Russia, which is the largest exporter of fossil fuels in the world, will never regain its share of the global energy supply chain it had before the invasion of Ukraine.
According to the IEA, Russia’s international energy trade will drop to 13% in 2030 from 20% in 2021.
The IEA also indicated that global demand for fossil fuels is at a peak or plateau for first time in agency’s history.
Global emissions from fossil fuels, which are responsible for climate change, will peak in 2025. As coal use declines over the next several years, natural gasoline demand plateaus by 2030 and oil demand level off in the middle decade, the demand for oil will drop.
“One of the effects of Russia’s actions is that the era of rapid growth in natural gas demand draws to a close,” the IEA said, pointing to a rise in global demand for gas of less than 5% between last year and 2030.