"If present trends continue, the world will need to invest $16 trillion over the next three decades to maintain and expand energy supply," the head of the Paris-based International Energy Agency told a USCIB audience in New York on November 13.

This is equivalent to one percent of total global GDP over the period, according to IEA Executive Director Claude Mandil.  "Without new policy actions, world energy demand will rise by two-thirds between now and 2030, and the world economy will falter if these energy supplies are not made available," he said.

Mr. Mandil briefed executives on the IEA's "World Energy Investment Outlook," released the week before, at a joint meeting of USCIB’s Environment Committee and BIAC’s Energy Committee, held at the headquarters of McGraw-Hill, Inc.  IEA, an autonomous agency linked with the OECD, serves as the forum of 26 industrialized countries for joint measures on energy policy and information.

The briefing, attended by industry representatives from a number of OECD countries, was chaired by Volker Heck, vice president for political affairs with RWE AG of Germany, who heads BIAC’s Energy Committee.

Mr. Mandil was roundly supportive of the new BIAC Energy Committee Vision Statement – so much so that he said that he could have written it himself.  The Vision Statement focuses on fostering a long-term and consistent energy framework, avoiding market distortions in the energy sector, encouraging innovation and technology, and improving developing countries’ access to energy.

Other guest speakers at the USCIB-BIAC meeting were Dr. James A. Edmonds of Battelle Labs, Walter Shearer of the UN’s Energy and Transport section, and Susan McDade of the UN Development Program.

The IEA report is the first detailed look at the global energy investment challenge over the next 30 years.  International organizations such as the World Bank and OPEC contributed data to the study, with input also coming from major energy companies and leading investment banks.

Among the report’s key observations, Mr. Mandil emphasized:

• Electrical power generation, transmission and distribution will absorb almost 60 percent of global energy investment.
• Some 80 percent of the $4 trillion of upstream investment in the oil and gas sectors will be needed simply to maintain production capacity at current levels.
• More of the capital needed for energy projects will have to come from private and foreign sources than in the past.

Mr. Mandil called the World Energy Investment Outlook “a wake-up call” for governments.  He said governments must play an integral role in creating the necessary framework for effective energy investment, pursuing liberalization of markets while creating fiscal and regulatory incentives to develop advanced technologies in such areas as carbon sequestration and alternative sources of energy.

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