Oil and gas prices are likely to remain inflated for years given the uneven transition to cleaner energy sources, the head of the International Energy Agency said Wednesday.
The push to end dependence on Russian oil and gas, coupled with efforts to battle climate change, have bumped up the pace of investments in green technology. But the increases “are not enough to replace fossil fuels,” said Fatih Birol, the agency’s executive director, which “may mean we will still see high and volatile energy prices for some time to come.”
In Africa, soaring energy and food prices last year caused the number of people without access to electricity to grow by 25 million, or 4 percent, Mr. Birol said, reversing a decade of progress. The likelihood that European governments will have to introduce some energy rationing this winter is also increasing, he said.
Worries about shortages and high prices have triggered more spending on fossil fuels, particularly coal, one of the dirtiest energy sources, the agency reported in its annual report on global energy investment. Emerging economies have fallen the furthest behind, with virtually zero increase in clean energy investment since 2015, the report said.
The painful rise in fuel prices has generated extraordinary windfall profits for oil and gas producers: The sector’s income is expected to reach $4 trillion this year, more than double its five-year average.
Mr. Birol called on the major oil and gas producers to use the “once-in-a-generation opportunity” to invest the outsized profits in speeding the transition to clean energy sources. At present, such investments account for a mere 5 percent of oil and gas companies’ capital investments.