Energy industry investment to plunge by $400bn —IEA

The International Energy Agency (IEA) has raised fears that the energy industry is set to suffer a record drop in investment due to the COVID-19 fallout.

The IEA noted that renewables are likely to fare better than oil and that any swift economic recovery could create a global fuel crunch.

In its annual report on energy investments, the Paris-based International Energy Agency (IEA) estimated the plunge will be of the order of one-fifth from 2019 levels, or almost $400 billion, as firms slash spending amid slumping demand for energy.

Shale oil producers that catapulted the United States to the world’s top crude nation stand to suffer the worst decline, the IEA said.

“All the energy sectors oil, gas, renewables everything is affected but the biggest impact is on shale oil,” the agency’s director Fatih Birol told AFP in an interview.

“Total oil investments we expect to decline one third this year whereas the shale industry will see a decline of about 50 percent.”

However, spending in renewable power projects is expected to fall by only around 10 percent for the year, the report said.

“Even though this ‘clean’ spending is set to dip in 2020, its share in total energy investment is set to rise,” it noted.

But it noted “these investment levels remain far short of what would be required to put the world on a more sustainable pathway,” estimating that spending on renewable power would need to double by the late 2020s.

The IEA has long warned that insufficient investment may leave the industry unable to meet rising demand.

“There is a risk that today’s cutbacks lead to future market imbalances, prompting new energy price cycles or volatility,” it said.

If oil investment stays at 2020 levels then supply in 2025 would be nine million barrels per day less than had been expected, the IEA estimated, which could mean tight markets and higher prices if demand resumes it pre-crisis rising trajectory.

While some may see a drop in spending on oil as a positive development, Birol warned of negative consequences.

“We hope to see a clean energy transition, this should be an orderly energy transition, well designed so it doesn’t cause any crisis, any shock,” he said.

“It shouldn’t be as a result of Covid, it should be as a result of the right energy policies.”

Birol signalled in this regard a concerning jump in approvals for coal projects in Asia.

“The findings of our reports are worrying but my chief concern is that the lockdown we have around the world may lead to a lock in of inefficient and old technologies, especially in the emerging world where there are huge debt and financing problems,” he said.

The IEA chief called on governments to favour clean energy projects in their coronavirus recovery plans.

“If the governments include the right energy policies in order to accelerate the clean energy transition, we may well see a rebound in clean energy.”

YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE

Buy and read digital replicas of your TRIBUNE titles by subscribing through E-VENDING

UPDATE: FG Eases Lockdown, Reopens Banks, Religious Centres, But Schools Remain Closed
Nigeria has moved to the second phase of the ease of lockdown in the effort to contain the COVID-19 pandemic as more restrictions have been lifted in the gradual move to fully reopen the economy. The new measures, which will be in place for the next four weeks, include the reopening of places of worship provided…Read full story

Obaseki Presents Re-Election Bid Nomination Form To Buhari
The governor of Edo State, Godwin Obaseki, has presented his nomination form, seeking re-election on the platform of the All Progressive Congress (APC) to President Muhammadu Buhari. The governor stormed the presidential villa, Abuja, on Monday, to see the president, brushing aside the controversy generated by… Read full story

UPDATE: Petrol To Sell At N123/Ltr As PPPRA Reviews Ex-Depot Price
The Petroleum Products Pricing Regulatory Agency(PPPRA) has reviewed the existing Premium Motor Spirit (PMS) pump price band between N121.50 and N123.50 per litre for the month of June. It also pegged the ex-depot price band at N102.13 and N104.13/litre, weeks after the Nigerian National Petroleum Corporation… Read full story

FG Relaxes Ban On Religious Gathering, Curfew Now From 10pm To 4am
The Federal Government on Monday announced the relaxation on the ban on religious gathering in the country from June 1. The Presidential Task Force on COVID-19 disclosed this during its daily briefing in Abuja, saying this is based on the guidelines and protocols agreed by state governments… Read full story

Nationwide Strike: FG Begins Negotiation With Resident Doctors
The Federal Government on Monday began negotiation with the Nigerian Association of Resident Doctors (NARD) with a view to get them to shelve their planned strike as the nation needs their cooperation to successfully battle the COVID-19 pandemic… Read full story

Be More Security Conscious, CAN Tells Churches
The Christian Association of Nigeria (CAN) has charged churches to be more security conscious, and also ensure the security of their leaders. CAN said this call became necessary following the recent kidnap of the Chairman, Nasarawa State Chapter of the Christian Association of Nigeria, Bishop Joseph Masin… … Read full story

We Inherited N26bn Unpaid Gratuities Of 6,274 Retirees ― Gov Makinde
Oyo State governor, Mr Seyi Makinde on Monday disclosed that his government met unpaid gratuities totalling N26 billion. He made the disclosure in a Facebook post in which he stated that his administration has cleared backlogs of gratuities from 2012 to 2013… Read full story

Immigration Boss Warns Officers Against Surcharging Passport Applicants
The Comptroller-General of Nigerian Immigration Service, Mr Muhammad Babandede CGI, has warned passport officers that no extra charges are allowed apart from the approved fees by the Federal Government. “Nigerians are not to be surcharged but we must serve them sincerely to gain their confidence,” he said… Read full story

More Than One In Six Young People Out Of Work Due To COVID-19 —ILO
MORE than one in six young people have stopped working since the outset of the COVID-19 pandemic while those who remain employed have seen their working hours cut by 23 per cent, the International Labour Organization (ILO) has said… Read full story

7 APC Governors Meet Tinubu Over Obaseki
SEVEN governors elected on the tickets of the All Progressives Congress (APC) met with the national leader of the party, Senator Bola Tinubu, at the State House, Marina, Lagos, on Sunday, over the fate of the embattled governor of Edo State, Mr Godwin Obaseki… Read full story

You Must Submit Your Voters Register Ahead Of Primaries, INEC Tells Political Parties
Ahead of Edo and Ondo State governorship elections, the Independent National Electoral Commission (INEC) has advised political parties to inform the INEC on the mode of primary it wants to adopt and submit the list of its registered members ahead of the exercise… Read full story

EDITORIAL: Nigeria Police And Citizen Olaoluwa Bolarinwa
LIKE the proverbial tortoise that is perennially enmeshed in one controversy or another, the police are once again in the news for the wrong reasons. This time around, some policemen have allegedly tortured one Citizen Olaoluwa Bolarinwa to death for failing to give them satisfactory information about his friend who was… Read full story