Whartone: The Upside of Global Energy and Scarcity

Rebecca Roberts, 9/26/08, Energy and Oil

Currently there has been an increasing rise in the demand for energy globally; however, the rise in demand is at it’s highest in China and India.

According to the IEA stated that if governments worldwide stick to the current policies the world would need more energy by up to 50% by 2030. On average the world’s energy consumption grows on average of 1.8% every year, equivalent of 11.4 billion tons of oil. In order to keep up with the rising need of energy the IEA expects an investment need of $22 trillion in energy-supply infrastructure.

China and India accounts for 45% of the increase in energy demands, but also, the IEA predicts the investment needs for China would be $3.7 trillion and India’s would be $1.25 trillion. Hal Sirkin, senior partner and managing director at BCG, believes that China and India are the main contributors to the changing global balancing points. Rick Peters, senior partner and former leader of BCG’s energy practice, explains that China wants to be an investor in the incremental production of energy because it is imperative to get access to resources. Finally, there are several state owned oil companies in both India and China that will slowly emerge as globally integrated producers of oil that will rival Exxon Mobil, Shell, and BP.

The IEA is predicting that in “developing countries will account for nearly three-quarters of the increase in global energy use over the next two decades, and the share of coal in that mix will increase significantly.” With the rising gas prices the production and selling of coal is becoming more competitive and demanding which is adding to the fact that China and India already accounts for the 45% of the world’s energy and by 2030 they will account for nearly 80%.

http://www.cdn.thestreet.com/story/10439282/1/wharton-the-upside-of-global-energy-scarcity.html