IEA: Low oil prices could threaten energy security

Low oil prices could be beneficial for consumers but it could also threaten energy security. That could happen by increasing reliance on smaller low cost producers “or risk a sharp […]

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By Jacqueline Echevarria

Low oil prices could be beneficial for consumers but it could also threaten energy security.

That could happen by increasing reliance on smaller low cost producers “or risk a sharp rebound in price if investment falls short”, according to a new report by the International Energy Agency (IEA).

It added the price of oil will remain low as there’s plenty of supply and falling demand in developing countries but it could reach $80 (£52) per barrel by 2020.

IEA Executive Director Fatih Birol said: “It would be a grave mistake to index our attention to energy security to changes in the oil price. Now is not the time to relax. Quite the opposite: a period of low oil prices is the moment to reinforce our capacity to deal with future energy security threats.”

Ahead of the COP21 conference, the report stated commitments so far won’t be enough to reach the target of keeping the global temperature below 2°C.

Global temperatures are on course to pass the 1°C mark above pre-industrial levels, according to the Met Office.

It also urges countries to take quicker actions towards reducing greenhouse gas emissions (GHG).

The IEA found renewables contributed almost half of the world’s new power generation capacity in 2014 and have already become the second largest source of electricity after coal.

Mr Birol added: “As the largest source of global greenhouse gas emissions, the energy sector must be at the heart of global action to tackle climate change. World leaders meeting in Paris must set a clear direction for the accelerated transformation of the global energy sector.

“The IEA stands ready to support the implementation of an agreement reached in Paris with all of the instruments at our disposal, to track progress, promote better policies and support the technology innovation that can fulfill the world’s hopes for a safe and sustainable energy future.”