Shell Predicts Energy Use Will Triple by 2050 Because of China, India
The Shell global energy report, called Signals and Signposts, said emerging nations like China and India are going through materially intensive development and a tighter market will continue to put pressure on prices and generate volatility. Shell also says there is no "silver bullet" that will solve all of the global energy demands in spite of ongoing development of biofuels and other alternatives.
Royal Shell is also sounding an environmental warning in its report. It says fossil fuels, even if they could maintain their share of the energy mix, would create CO2 emissions at a level that could "severely threaten" mankind.
China and India are also going to have a major impact because they are just entering the dawn of increased energy demand as they build up their roads and related infrastructure and ratchet up their transportation demands (as well as engage in massive commercial and residential construction projects).
The report paints a dour outlook for economic stability. It said policy making and productivity gains helped keep inflation low or almost non-existent recently, but that's not going to be true going forward because "the moderating effect of this combination of good policies, good practices, and good luck" will not continue.
Shell concedes that innovation and competition could drive enhanced energy efficiency but only enough to cut demand by one-fifth. Energy production could be boosted by 50 percent in the same time frame, but that still leaves a massive gap of 30 percent of demand, which Shell says is equal to the entire global energy demand in 2000.
In spite of massive profits in 2010, where Shell earned $18.6 billion, the company is saying the public sector is key to solving future energy demands. Partnerships, the company said, have to be grounded in economic reality.
Signals and Signposts is Shell's way of getting policy makers across the globe to start planning for the future. The report says decisions made in the next five years will impact global response to energy demands in 2050. Additionally, "Smart urban development, sustained policy encouragement and commercial and technological innovation can all result in some demand moderation. But so can price-shocks, knee-jerk policies and frustrated aspirations."
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