world energy outlook 2008 (presentation to the press)
TRANSCRIPT
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OECD/IEA - 2008 OECD/IEA - 2008
OECD/IEA - 2008
The contextThe contextThe contextThe context
Soaring energy prices to mid-2008, followed by a collapse
what will it mean for demand?
How will the financial crisis & economic slowdown affect
energy demand & investment?
Will economic worries divert attention from strategicenergy-security & environmental challenges?
Are we setting ourselves up for a supply-crunch once the
economy is back on its feet?
Will negotiators at COP-15 in Copenhagen in 2009 have the
political support needed to succeed?
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OECD/IEA - 2008
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
1980 1990 2000 2010 2020 2030
Mtoe
Other renewables
Hydro
Nuclear
Biomass
Gas
Coal
Oil
World energy demand expands by 45% between now and 2030 an average rate of increase
of 1.6% per year with coal accounting for more than a third of the overall rise
World primary energy demand in tWorld primary energy demand in thehe
Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!
World primary energy demand in tWorld primary energy demand in thehe
Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!
OECD/IEA - 2008
The continuing importance of coal inThe continuing importance of coal in
world primary energy demandworld primary energy demand
The continuing importance of coal inThe continuing importance of coal in
world primary energy demandworld primary energy demand
0%
20%
40%
60%
80%
100%
Non-OECD OECD
All other fuels
Coal
Shares of incremental energy demand
Reference Scenario, 2006 - 2030Increase in primary demand, 2000 - 2007
Demand for coal has been growing faster than any other energy source & is projected to
account for more than a third of incremental global energy demand to 2030
Mtoe
0
100
200
300
400
500
600
700
800
900
1 000
Coal Oil Gas Renewables Nuclear
4.8%
1.6%2.6%
2.2%
0.8%
% = average annual rate of growth
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OECD/IEA - 2008
Share ofShare of renewablesrenewables in electricityin electricity
generation in the Reference Scenariogeneration in the Reference Scenario
Share ofShare of renewablesrenewables in electricityin electricity
generation in the Reference Scenariogeneration in the Reference Scenario
0% 5% 10% 15% 20% 25% 30%
2030
2015
2006
2030
2015
2006
2030
2015
2006
Non-O
ECD
OECD
World
Hydro
Other (wind, solar, etc)
Soon after 2010, renewables become the 2nd-largest source of electricity behind coal, thanks
to government support, prospects for higher fossil-fuel prices & declining investment costs
OECD/IEA - 2008
Change in oil demand by regionChange in oil demand by region
in the Reference Scenario, 2007in the Reference Scenario, 2007--20302030
Change in oil demand by regionChange in oil demand by region
in the Reference Scenario, 2007in the Reference Scenario, 2007--20302030
-2 0 2 4 6 8 10
China
Middle East
India
Other Asia
Latin AmericaE. Europe/Eurasia
Africa
OECD North America
OECD Europe
OECD Pacific
mb/d
All of the growth in oil demand comes from non-OECD, with China contributing 43%, the
Middle East & India each about 20% & other emerging Asian economies most of the rest
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OECD/IEA - 2008
Energy subsidies in nonEnergy subsidies in non--OECDOECD
countries, 2007countries, 2007
Energy subsidies in nonEnergy subsidies in non--OECDOECD
countries, 2007countries, 2007
0 10 20 30 40 50 60
BrazilVietnam
Chinese Taipei
NigeriaThailandMalaysiaPakistan
KazakhstanSouth Africa
ArgentinaUkraine
EgyptIndonesiaVenezuela
IndiaSaudi Arabia
ChinaRussia
Iran
Billion dollars
Oil
Gas
Coal
Electricity
Energy subsidies in the 20 largest non-OECD countries hit $310 billion in 2007 creating, in
many cases, an unsustainable economic burden & exacerbating environmental effects
OECD/IEA - 2008
Incremental world fossilIncremental world fossil--fuelfuel
production in the Reference Scenarioproduction in the Reference Scenario
Incremental world fossilIncremental world fossil--fuelfuel
production in the Reference Scenarioproduction in the Reference Scenario
Almost all incremental oil & gas comes from non-OECD regions, resulting in major structural
changes to the industry with implications for global energy markets
0
5
10
15
20
25
1980-2007 2007-2030 1980-2006 2006-2030 1980-2006 2006-2030
mb/d Non-OECD
OECD
- 200
200
400
600
800
1 000
1 200
1 400
1 600
Bcm
500
1 000
1 500
2 000
2 500
3 000
Mtce
Oil CoalGas
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OECD/IEA - 2008
Cumulative energyCumulative energy--supply investmentsupply investment
in the Reference Scenarioin the Reference Scenario, 2007, 2007--20302030
Cumulative energyCumulative energy--supply investmentsupply investment
in the Reference Scenarioin the Reference Scenario, 2007, 2007--20302030
Investment of $26 trillion, or over $1 trillion/year, is needed, but the credit squeeze could
delay spending, potentially setting up a supply-crunch once the economy recovers
Power
generation
50%
Transmission
& distribution
50%Mining
91%
Shipping &
ports
9%
Exploration and
development
80%
Refining
16%
Shipping
4%
Exploration &
development
61%LNG chain
8%
Transmission
& distribution
31%
Power52%
$13.6 trillion
Oil24%
$6.3 trillion
Gas21%
$5.5 trillion
Coal3%
$0.7 trillion
Biofuels
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OECD/IEA - 2008
World oil production by OPEC/nonWorld oil production by OPEC/non--OPECOPEC
in the Reference Scenarioin the Reference Scenario
World oil production by OPEC/nonWorld oil production by OPEC/non--OPECOPEC
in the Reference Scenarioin the Reference Scenario
Production rises to 104 mb/d in 2030, with Middle East OPEC taking the lions share of oil
market growth as conventional non-OPEC production declines
0
20
40
60
80
100
120
2000 2007 2015 2030
OPEC - other
OPEC - Middle East
Non-OPEC - non-
conventional
Non-OPEC -
conventional
OPEC share
mb/d
38%
40%
42%
44%
46%
48%
50%
52%
OECD/IEA - 2008
0
20
40
60
80
100
120
1990 2000 2010 2020 2030
mb/d Natural gas liquids
Non-conventional oil
Crude oil - yet to bedeveloped (inc. EOR)or found
Crude oil - currently
producing fields
World oil production by sourceWorld oil production by source
in the Reference Scenarioin the Reference Scenario
World oil production by sourceWorld oil production by source
in the Reference Scenarioin the Reference Scenario
64 mb/d of gross capacity needs to be installed between 2007 & 2030 six times the current
capacity of Saudi Arabia to meet demand growth & offset decline
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OECD/IEA - 2008
Average observed oilfieldAverage observed oilfield
decline ratesdecline rates
Average observed oilfieldAverage observed oilfield
decline ratesdecline rates
The production-weighted average decline rate worldwide is projected to rise from 6.7% in
2007 to 8.6% in 2030 as productions shifts to smaller oilfields, which tend to decline faster
0%
2%
4%
6%
8%
10%
12%
14%
16%
Pre-1970s 1970s 1980s 1990s 2000 - 2007
OPEC
Non-OPEC
Year production started
OECD/IEA - 2008
A sea change: world oil & gas production byA sea change: world oil & gas production by
company type in thecompany type in the Reference ScenarioReference Scenario
A sea change: world oil & gas production byA sea change: world oil & gas production by
company type in thecompany type in the Reference ScenarioReference Scenario
0
20
40
60
80
100
120
2007 2015 2030
mb/d
0
750
1 500
2 250
3 000
3 750
4 500
2006 2015 2030
Bcm
NOCs Private companies
Oil Gas
Almost 80% of the projected increase in output of both oil & gas comes from
national companies on the assumption that investment is forthcoming
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OECD/IEA - 2008 OECD/IEA - 2008
Post-2012
climate-policy scenarios
Post-2012
climate-policy scenarios
OECD/IEA - 2008
EnergyEnergy--related COrelated CO22 emissionsemissions
in the Reference Scenarioin the Reference Scenario
EnergyEnergy--related COrelated CO22 emissionsemissions
in the Reference Scenarioin the Reference Scenario
97% of the projected increase in emissions between now & 2030 comes from non-OECD
countries three-quarters from China, India & the Middle East alone
0
5
10
15
20
25
30
35
40
45
1980 1990 2000 2010 2020 2030
Gigatonnes International
marine bunkersand aviation
Non-OECD - gas
Non-OECD - oil
Non-OECD - coal
OECD - gas
OECD - oil
OECD - coal
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OECD/IEA - 2008
National
policies and
measures
The 550 Policy ScenarioThe 450 Policy Scenario
Cap and trade
from 2020
onwards
Copenhagen: aCopenhagen: a plausibleplausible postpost--2012 global2012 global
climateclimate--change policy regimechange policy regime
Copenhagen: aCopenhagen: a plausibleplausible postpost--2012 global2012 global
climateclimate--change policy regimechange policy regime
A combination of policy mechanisms reflecting nations varied circumstances & current
negotiating positions is a realistic outcome at the Copenhagen COP at end-2009
Cap and tradePower
generation
Buildings
Transport
Industry
International sectoral approaches
National policies and measures
International sectoral approaches
OECD+
Other Major
Economies
Other
Countries
National
policies and
measures
OECD/IEA - 2008
Reductions in energyReductions in energy--related COrelated CO22emissions in the climateemissions in the climate--policy scenariospolicy scenarios
Reductions in energyReductions in energy--related COrelated CO22emissions in the climateemissions in the climate--policy scenariospolicy scenarios
While technological progress is needed to achieve some emissions reductions, efficiency
gains and deployment of existing low-carbon energy accounts for most of the savings
20
25
30
35
40
45
2005 2010 2015 2020 2025 2030
Gigatonnes
Reference Scenario 550 Policy Scenario 450 Policy Scenario
CCS
Renewables & biofuels
Nuclear
Energy efficiency
550Policy
Scenario
450Policy
Scenario
54%
23%
14%
9%
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OECD/IEA - 2008
Total power generation capacity todayTotal power generation capacity today
and in 2030 by scenarioand in 2030 by scenario
Total power generation capacity todayTotal power generation capacity today
and in 2030 by scenarioand in 2030 by scenario
In the 450 Policy Scenario, the power sector undergoes a dramatic change with CCS,
renewables and nuclear each playing a crucial role
0 1 000 2 000 3 000
Other renewables
Wind
Hydro
Nuclear
Coal and gas with CCS
Gas
Coal
GW
1.2 x today
1.5 x today
13.5 x today
2.1 x today
1.8 x today
12.5 x today
15% of todays coal & gas capacity
Today Reference Scenario 2030 450 Policy Scenario 2030
OECD/IEA - 2008
World energyWorld energy--related COrelated CO22 emissionsemissions
in 2030 by scenarioin 2030 by scenario
World energyWorld energy--related COrelated CO22 emissionsemissions
in 2030 by scenarioin 2030 by scenario
OECD countries alone cannot put the world onto a 450-ppm trajectory,
even if they were to reduce their emissions to zero
Non-OECD
World
World
OECD
0
5
10
15
20
25
30
35
40
Reference Scenario 550 Policy Scenario 450 Policy Scenario
Gigatonnes
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OECD/IEA - 2008
Total oil production in 2030 byTotal oil production in 2030 by
scenarioscenario
Total oil production in 2030 byTotal oil production in 2030 by
scenarioscenario
Curbing CO2 emissions would improve energy security by cutting demand for fossil fuels, but
even in the 450 Policy Scenario, OPEC production increases by 12 mb/d from now to 2030
0
20
40
60
80
100
120
2007 Reference Scenario2030
550 Policy Scenario2030
450 Policy Scenario2030
Non-OPEC
OPEC
9 mb/d16 mb/d
mb/d
OECD/IEA - 2008
Key results of the postKey results of the post--20122012
climateclimate--policy analysispolicy analysis
Key results of the postKey results of the post--20122012
climateclimate--policy analysispolicy analysis
550 Policy Scenario
Corresponds to a c.3C global
temperature rise
Energy demand continues to
expand, but fuel mix is markedly
different
CO2 price in OECD countries
reaches $90/tonne in 2030
Additional investment equal to
0.25% of GDP
450 Policy Scenario
Corresponds to a c.2C global
temperature rise
Energy demand grows, but half
as fast as in Reference Scenario
Rapid deployment of low-carbon
technologies particularly CCS
Big fall in non-OECD emissions
CO2 price in 2030 reaches
$180/tonne
Additional investment equal to
0.6% of GDP
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OECD/IEA - 2008 OECD/IEA - 2008
OECD/IEA - 2008
Summary & conclusionsSummary & conclusionsSummary & conclusionsSummary & conclusions
Current energy trends are patently unsustainable socially,
environmentally, economically
Oil will remain the leading energy source but...
> The era of cheap oil is over, although price volatility will remain
> Oilfield decline is the key determinant of investment needs
> The oil market is undergoing major and lasting structural change, withnational companies in the ascendancy
To avoid "abrupt and irreversible" climate change we need amajor decarbonisation of the worlds energy system
> Copenhagen must deliver a credible post-2012 climate regime
> Limiting temperature rise to 2C will require significant emissionreductions in all regions & technological breakthroughs
> Mitigating climate change will substantially improve energy security
The present economic worries do not excuse back-tracking or delaysin taking action to address energy challenges