Publications: Notes at the Margin

The IEA: Blacking Out the World (October 21, 2013)


IEA executive director, Maria van der Hoeven gave listeners two messages when she spoke at the World Energy Congress in South Korea last week. First, she likes high oil prices because they foster continued investment in alternative energy. Oil producers may appreciate this view in the short run. However, they should be careful what they wish for because—and this is the second message—van der Hoeven hopes to put them out of business. In pushing for energy efficiency and alternative fuel use, she is implicitly affirming an observation made by The Economist some months ago: far more oil and gas is being discovered than could ever be consumed given constraints on global emissions. One consequence of such policies, however, has been increasing electricity prices in Europe. As this report discusses, the implication for those investing in oil is that the current price level will accelerate a decline in oil use, ultimately pushing the world toward—but not achieving—the OECD’s implied goal of eliminating all fossil fuel consumption within fifty years.


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