Policy choices made by governments across the globe will determine the shape of the energy system of the future as the energy sector experiences a series of major transformations.
The International Energy Agency's World Energy Outlook 2018 sets out global energy trends amid a time of significant geopolitical change and influence.
While the geography of energy consumption continues its historic shift to Asia, the document finds mixed signals on the pace and direction of change.
Oil markets are now entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s and demand for natural gas is on the rise.
Oil consumption will grow in the next few decades as a result of rising petrochemicals, trucking and aviation demand. Meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels.
According to the WEO without such a pick-up in investment, US shale production would have to add more than 10 million barrels a day from today until 20205, which is the equivalent of adding another Russia to global supply in seven years. This would be an historically unprecedented feat.
In all cases, governments will have a critical influence in the direction of the future energy system. According to the documents new policies scenario, under current and planned policies, energy demand is set to grow by more than 25% to 2040, which will require more than $2 trillion a year of investment in new energy supply.
Dr Fatih Birol, IEA's executive director, says: 'Our analysis shows that over 70% of global energy investments will be government-driven and as such the message is clear – the world's energy destiny lies with government decisions.
'Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centres and expanding basic access to energy in Africa and elsewhere.'
Read the full report in the December/January edition of Tank Storage Magazine.
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