Transcript World Energy Outlook 2011 Carnegie Endowment Washington DC, 28 November 2011 © OECD/IEA 2011

World Energy Outlook 2011
Carnegie Endowment
Washington DC, 28 November 2011
© OECD/IEA 2011
The context: fresh challenges
add to already worrying trends
 Economic concerns have diverted attention from energy policy
and limited the means of intervention
 Post-Fukushima, nuclear is facing uncertainty
 MENA turmoil raised questions about region’s investment plans
 Some key trends are pointing in worrying directions:
 CO2 emissions rebounded to a record high
 energy efficiency of global economy worsened for 2nd straight year
 spending on oil imports is near record highs
© OECD/IEA 2011
Emerging economies continue
to drive global energy demand
Mtoe
Growth in primary energy demand in the New Policies Scenario
4 500
4 000
China
3 500
India
3 000
Other developing Asia
2 500
Russia
Middle East
2 000
Rest of world
1 500
OECD
1 000
500
0
2010
2015
2020
2025
2030
2035
Global energy demand increases by one-third from 2010 to 2035,
with China & India accounting for 50% of the growth
© OECD/IEA 2011
Natural gas & renewables become
increasingly important
Mtoe
World primary energy demand
5 000
Additional
to 2035
4 000
2010
3 000
2 000
1 000
0
Oil
Coal
Gas
Renewables
Nuclear
Renewables & natural gas collectively meet almost two-thirds
of incremental energy demand in 2010-2035
© OECD/IEA 2011
Oil demand is driven higher
by soaring car ownership
Vehicles per 1000 people in selected markets
800
2010
700
2035
600
500
400
300
200
100
0
United States
European
Union
China
India
Middle East
The passenger vehicle fleet doubles to 1.7 billion in 2035; most cars are sold
outside the OECD by 2020, making non-OECD policies key to global oil demand
© OECD/IEA 2011
US oil imports decline
mb/d
US liquids supply
25
Net oil imports
20
Biofuels
Natural gas liquids
15
Crude oil
10
5
0
1990
2005
2010
2020
2035
More stringent vehicle fuel efficiency standards and expanding domestic production from
light tight oil cause US oil imports to fall to about 6 mb/d in 2035
© OECD/IEA 2011
Changing oil import needs are set to
shift concerns about oil security
mb/d
Net imports of oil
14
2000
12
2010
10
2035
8
6
4
2
0
China
India
European
Union
United
States
Japan
EU oil imports overtake those of the US around 2015 and China becomes the world’s largest
oil importer around 2020
© OECD/IEA 2011
What impact would deferred
investment in MENA have on markets?
 MENA is set to supply the bulk of the growth in oil output
to 2035, requiring investment of over $100 billion/annum
 ‘Deferred Investment Case’ looks at near-term investment
falling short by one-third
 possible drivers include new spending priorities, higher perceived risks, etc
 MENA output falls 3.4 mb/d by 2015 and 6.2 mb/d by 2020
 Consumers face a near-term rise in oil prices to $150/barrel
 MENA earns more initially, but then less as market share is lost
© OECD/IEA 2011
Golden prospects for natural gas
Largest natural gas producers in 2035
Conventional
Russia
United States
China
Unconventional
Iran
Qatar
Canada
Algeria
Australia
India
Norway
0
200
400
600
800
1 000
bcm
Unconventional natural gas supplies 40% of the 1.7 tcm increase in global supply,
but best practices are essential to successfully address environmental challenges
© OECD/IEA 2011
Coal won the energy race in the
first decade of the 21st century
Mtoe
Growth in global energy demand, 2000-2010
1 600
1 400
Nuclear
1 200
Renewables
1 000
800
Oil
600
400
Natural gas
200
0
Total non-coal
Coal
Coal accounted for nearly half of the increase in global energy use over the past decade,
with the bulk of the growth coming from the power sector in emerging economies
© OECD/IEA 2011
Globally, second thoughts on nuclear
would have far-reaching consequences
 “Low Nuclear Case” examines impact of nuclear component
of future energy supply being cut in half
 Gives a boost to renewables, but increases import bills,
reduces diversity & makes it harder to combat climate change
 By 2035, compared with the New Policies Scenario:
 coal demand increases by twice Australia’s steam coal exports
 natural gas demand increases by two-thirds Russia’s natural gas net exports
 power- sector CO2 emissions increase by 6.2%
 Biggest implications are for countries with limited energy
resources that planned to rely on nuclear power
© OECD/IEA 2011
Power investment focuses on
low-carbon technologies
Share of new power generation and investment, 2011-2035
40%
Generation
35%
Investment
30%
25%
20%
15%
10%
5%
0%
Coal
Gas
Nuclear
Hydro
Wind
Solar PV
Renewables are often capital-intensive, representing 60% of investment for 30% of
additional generation, but bring environmental benefits & have minimal fuel costs
© OECD/IEA 2011
Billion dollars (2010)
The overall value of subsidies
to renewables is set to rise
250
Biofuels
Electricity
200
150
100
50
0
2007 2008 2009 2010
2015 2020 2025 2030 2035
Renewable subsidies of $66 billion in 2010 (compared with $409 billion for fossil fuels), need
to climb to $250 billion in 2035 as rising deployment outweighs improved competitiveness
© OECD/IEA 2011
Realising Russia’s potential for energy
savings would have a big impact
Natural gas savings from raising efficiency (to comparable OECD levels)
2008
180 bcm
Net exports / potential savings
Domestic gas demand
2035
130 bcm
bcm
600
400
200
0
200
400
600
Russia’s total energy savings potential is close to the primary energy used in a year by the UK;
new efficiency policies bring results, but the savings potential remains large even in 2035
© OECD/IEA 2011
Russia remains a cornerstone
of the global energy economy
Russian revenue from fossil fuel exports
2010
$255 billion
China
2%
Other
21%
Other
Europe
16%
2035
$420 billion
Other
17%
European
Union
61%
European
Union
48%
China
20%
Other
Europe
15%
An increasing share of Russian exports go eastwards to Asia,
providing Russia with diversity of markets and revenues
© OECD/IEA 2011
Energy is at the heart of
the climate challenge
Gigatonnes
Cumulative energy-related CO2 emissions in selected regions
500
2010-2035
1900-2009
400
300
200
100
0
United States
China
European
Union
India
Japan
By 2035, cumulative CO2 emissions from today exceed three-quarters of the total since 1900,
and China’s per-capita emissions match the OECD average
© OECD/IEA 2011
CO2 emissions (gigatonnes)
The door to 2°C is closing,
but will we be “locked-in” ?
45
6°C trajectory
40
35
30
2°C trajectory
25
Delay until 2017
Delay until 2015
20
15
Emissions from
existing
infrastructure
10
5
0
2010
2015
2020
2025
2030
2035
Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario
will be “locked-in” by existing power plants, factories, buildings, etc
© OECD/IEA 2011
Energy poverty is widespread
Million people without electricity
Sub-Saharan Africa
Latin America
585
China
8
Rest of
developing
Asia
India
31
289
1.3 billion people in the world live without electricity
© OECD/IEA 2011
379
If we don’t change direction soon,
we’ll end up where we’re heading
 In a world full of uncertainty, one thing is sure:
rising incomes & population will push energy needs higher
 US oil security improves, although world oil supply diversity is
diminishing; new options are opening up for natural gas
 Coal – the “forgotten fuel” – has underpinned growth, but its
future will be shaped by uptake of efficient power plants & CCS
 The world needs Russian energy, while Russia needs to use less
 Despite steps in the right direction, the door to 2°C is closing
© OECD/IEA 2011