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License: All rights reserved. Credit: Greenpeace

Five charts on why the IEA thinks most of the world's oil needs to stay in the ground

Damian Kahya
Damian Kahya is the Energydesk editor

The rich nation's energy think-tank, the International Energy Agency (IEA), has published its latest assessment of the future of the world’s energy markets.

As usual the Paris-based organisation presented three options for world leaders. One in which the chance of catastrophic climate change was reduced to 50/50 (the 450 scenario), and two other scenarios where the climate goes out of control to varying degrees.

The latter two may be more realistic, but let’s leave them aside for now and focus on what the IEA says has to happen if we don’t want rising seas, stronger hurricanes and the sort of thing the UN IPCC talked about earlier this year.

First energy use would have to flat line - starting from 2020.

Which means that global demand for coal and oil will have to fall through to 2035 and demand for gas will rise much less than forecast. 

Which means that about three quarters of the world's proven but not yet in production oil reserves will have to remain... untapped.

That includes a lot of extreme and unconventional reserves. Indeed much of the Arctic's oil is not even proven, and certainly not 'in production'. 

(The chart shows that 45% of the world's currently proven reserves can be in production by 2035. Because 26% of currently proven reserves are already tapped however we calculated that 74% of the world's remaining untapped reserves needed to stay in the ground)

Even gas - less polluting than both coal and oil - will see demand fall in the developed world, especially in the EU. 

In fact rich-nation gas demand by 2035 will be lower than it is today.

And here is the funny thing - because we use far less oil and gas, both will be cheaper in a world which tackles climate change.

Though that may, or may not, lead to benefits for consumers as the IEA insist governments may take most of that in tax (to discourage consumption). Still, that money will eventually end up paying for something. 

Lower prices and limits on how much oil can be burned also means there is little or no reason to produce oil from areas "which are higher up the supply curve," that could be fracking in Europe or oil in difficult to reach places. 

Recent estimates put the cost of extracting oil from the arctic at $200-$300 a barrel. 

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