Overview of Business as Usual

This scenario is based on the oil and gas output projections prepared by Dr. Fatih Birol and his colleagues at the International Energy Agency (IEA). In World Energy Outlook 2004, they write:

“Global oil production will not peak over the projection period [i.e., before 2030] so long as necessary investments in supply infrastructure are made. New capacity will be needed to offset production declines and to meet demand growth. About $3 trillion will need to be invested in the oil sector from 2003 to 2030. Financing that effort will be a major challenge.”

However, if the investments are made, they think that oil output will be able to match demand, which they expect to grow from 77 million barrels a day (mb/d) in 2002 to 121mb/d in 2030. This is an annual growth rate of 1.6%, rather less than demand is growing at the moment.

For gas, the IEA team says that “resources can easily meet the projected increase in global demand” provided that $2.7 trillion, or about $100 billion a year, is invested in gas supply infrastructure between now and 2030. This level of investment would allow world gas consumption to rise at 2.3% a year to just less than double its present level.

Following the oil price shocks of 2005/2006 a significant find of oil and gas in the Siberian Arctic restores confidence in the market and oil prices return to $60, thereby growing each year by on average 3%.