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World Energy Outlook 2009 - by the IEA, Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible...they just don't say it openly

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2009WorldEnergyOutlook World Energy Outlook150 (61 2009 19 1 P1)ISBN: 978 92 64 06130 92009 2009Since WEO-2008, the economic downturn has led to a drop in energy use, CO2 emissions and energy investment. Is this an opportunity to arrest climate change or a threat that any economic upturn might be stifed at birth? What package of commitments and measures should the climate negotiators at the UN Climate Change Conference (COP 15) in Copenhagen put together if they really want to stop global temperatures rising? How much would it cost? And how much might the developed world have to pay to fnance action elsewhere?How big is the gas resource base and what is the typical pattern of production from a gas feld? What does the unconventional gas boom in the United States mean for the rest of the world? Are we headed for a global gas glut? What role will gas play in the future energy mix? And how might the way gas is priced change?All these questions and many others are answered in WEO-2009. The data are extensive, the projections more detailed than ever and the analyses compelling.2009WorldEnergyOutlookINTERNATIONAL ENERGY AGENCYThe International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an international energy programme.It carries out a comprehensive programme of energy co-operation among twenty-eight of the thirty OECD member countries. The basic aims of the IEA are: To maintain and improve systems for coping with oil supply disruptions. To promote rational energy policies in a global context through co-operative relations with non-member countries, industry and international organisations. To operate a permanent information system on international oil markets. To provide data on other aspects of international energy markets. To improve the worlds energy supply and demand structure by developing alternative energy sources and increasing the efciency of energy use. To promote international collaboration on energy technology. To assist in the integration of environmental and energy policies, including relating to climate change.IEA member countries: AustraliaAustria BelgiumCanadaCzech RepublicDenmarkFinlandFranceGermanyGreeceHungaryIreland ItalyJapanKorea (Republic of)LuxembourgNetherlandsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenSwitzerlandTurkeyUnited KingdomUnited StatesThe European Commission also participates in the work of the IEA. OECD/IEA, 2009International Energy Agency (IEA) 9 rue de la Fdration, 75739 Paris Cedex 15, FrancePlease note that this publication is subject to specic restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/about/copyright.asp ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTThe OECD is a unique forum where the governments of thirty democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. FOREWORDThe Executive Director of the International Energy Agency (IEA) is not a climate negotiator. It is for national and regional governments, not international secretariats, to decide how far nations need to go in curbing greenhouse-gas emissions and what commitments they are prepared to make to attain the goal. The answer to that will emerge at the 15th Conference of the Parties (COP 15) to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2009 in Copenhagen.But negotiators need hard, quantified information. And the IEA is well placed to provide that. In detail, sector by sector and region by region, the World Energy Outlook 2009 (WEO-2009) lays out the commitments and measures in the energy sector that could underpin a just international agreement on climate change. My chief economist, Fatih Birol, has again directed the team responsible for this analysis. Their work details the components of an ambitious, but realisable, package. The full WEO-2009 is published only one month before the climax of the UNFCCC negotiations, but the key results on the issue of climate change have been made available in advance.WEO-2009 has many other riches. As the world struggles to emerge from the financial crisis, it quantifies the impact of the crisis on energy investment and shows what the implications could be, once the global economy recovers. In one sense, the sudden halt to new investment is an important opportunity: the new investment, when it comes, can make the most of the best available technologies, guided by any evidence from Copenhagen that the international community is serious about climate change. But in another sense, it is a threat: under-investment, if prolonged, could constrain energy supply, pushing up the price of energy and even stifling the economic recovery. In the short term, far from being short of supply, we could be heading for a glut in natural gas supply. The economic slowdown has slashed demand for gas, but investment in the gas-supply infrastructure is long term in nature and, once committed, tends to be carried through. Coupled with a boom in supplies in the United States from unconventional sources, this situation has transformed the gas market. Gas demand is set to rebound, as the global economy recovers and as governments act to drive power generators away from use of the most polluting fossil fuels. But it could then stutter again, as growth in demand for electricity slows down under pressure from action on climate change, and even gas finds it has to give way to renewables and nuclear power in power generation. On the supply side, gas resources are ample: this years study of their extent and of patterns in gas production is comparable in depth to the study of oil resources in WEO-2008. Collective action to tackle climate change calls for the wholesale transformation of the global energy system. We show here that limiting the global average temperature increase to 2Celsius, which a growing number of world leaders now accept as the ultimate goal, would require fossil-energy consumption to peak by around 2020 and then decline. 3 Foreword OECD/IEA, 2009Consistent with past practice, we also offer in this years WEO an expanded survey of energy production and use in a particular region of the world, this time Southeast Asia. This region has growing influence in the global energy market. Enthusiastic support and financial backing from IEA member countries, as well as from others who rely on WEO, make it possible to provide analysis of the quality and scope found here. I am confident that our supporters are getting good value for their money and that our global readership will again derive significant benefit from the insights offered from this volume.Nobuo TanakaExecutive DirectorThis publication has been produced under the authority of the Executive Director of the International Energy Agency. The views expressed do not necessarily reflect theviews or policies of individual IEA member countries.4 World Energy Outlook 2009 OECD/IEA, 2009Acknowledgements 5ACKNOWLEDGEMENTSThis study was prepared by the Office of the Chief Economist (OCE) of the International Energy Agency (IEA) in co-operation with other offices of the Agency. The study was designed and directed by Fatih Birol, Chief Economist of the IEA. Laura Cozzi co-ordinated the analysis of climate policy scenarios; Trevor Morgan co-ordinated the analysis of natural gas prospects; Amos Bromhead co-ordinated the analysis of Southeast Asia; Marco Baroni and Pawel Olejarnik led the modelling work. Maria Argiri, Raffaella Centurelli, Michael-Xiaobao Chen, John Corben, Tim Gould, Timur Gl, Paul Dowling, Bertrand Magn, Chris Mullin, Uur cal, Sho Siam Poh, Olivier Rech, Shigeaki Shiraishi, David Wilkinson, Akira Yanagisawa and Tatiana Zhitenko also authored different chapters of the book and were instrumental in delivering the study. Sandra Mooney provided essential support. For more information on the members of the OCE and their contribution to the WEO, please visit www.worldenergyoutlook.org.Robert Priddle carried editorial responsibility.Special thanks go to: the Energy Market Authority of Singapore and the Economic Research Institute for ASEAN & East Asia for supporting the Energy Prospects in Southeast Asia Workshop in Singapore (26-27 March 2009); the Government of the Netherlandsfor hosting the Prospects for Global Gas Workshop in Amsterdam (9 April 2009); andthe Government of Sweden for hosting the Climate Change Workshop in Stockholm(15 April 2009). Each of these workshops provided key input to this study.We are also indebted to United Nations Framework Convention on Climate Change (UNFCCC) Secretariat for very helpful discussions when building our climate change scenarios.A number of international experts provided invaluable contributions throughout the preparation of this book: Hu Angang (Tsinghua University, China); John Ashton (Foreign Office, United Kingdom); Paul Baruya (IEA Clean Coal Centre, United Kingdom); Jean-Paul Bouttes (EDF, France); Jean-Marc Burniaux (OECD, France); Guy Caruso (CSIS, United States); Janusz Cofala (IIASA, Austria); Erik Haites (Consultant, Canada); Jim Jensen (Consultant, United States); Jan-Hein Hesse (Shell, Netherlands); Brian Pearce (IATA, Switzerland); Teresa Ribera (Ministry of Environment, Spain); Ramzi Salman (Qatar Petroleum, Qatar); Olivier Sassi (Consultant); Adnan Shihab-Eldin (former OPEC Secretary General, Kuwait); Ottar Skagen (StatoilHydro, Norway); Robert Stavins (Harvard University, United States); Jonathan Stern (OIES, United Kingdom); and Henning Wuester (UNFCCC, Germany). The study benefited from input provided by IEA experts. Ian Cronshaw and Hiroshi Hashimoto made invaluable contributions to the natural gas supply analysis;Rick Bradley provided very helpful input to the climate change analysis as didBrett Jacobs to the analysis of Southeast Asia. Martin Ragettli provided input to the energy poverty analysis. Other IEA colleagues who provided input to different parts of the book include: Jane Barbiere, Richard Baron, Madeleine Barry, Aad van Bohemen, Pierpaolo Cazzola, Anne-Sophie Corbeau, Muriel Custodio, Philippine de TSerclaes, OECD/IEA, 20096 World Energy Outlook 2009Paolo Frankl, Lew Fulton, David Fyfe, Rebecca Gaghen, Jean-Yves Garnier, Didier Houssin, Jung Woo Lee, Henning Lohse, Samantha Olz, Cedric Philibert, Brian Ricketts, Bertrand Sadin, Maria Sicilia, Ralph Sims, Sylvie Stephan, Cecilia Tam and Michael Taylor. Thanks also go to Marilyn Smith for proofreading the text.The work could not have been achieved without the substantial support and co-operation provided by many government bodies, international organisations and energy companies worldwide, notably:Economic Research Institute for ASEAN and East Asia (ERIA); Encana; Energy Market Authority of Singapore (EMA); Foreign and Commonwealth Office, United Kingdom; International Monetary Fund (IMF); Ministry of Economic Affairs, The Netherlands; Ministry of Economy, Trade and Industry, Japan; Ministry of Enterprise, Energy and Communications, Sweden; Ministry of Foreign Affairs, Czech Republic; Ministry of Foreign Affairs, Norway; Ministry of Energy, Russian Federation; Schlumberger Ltd.; Shell; StatoilHydro; the Renewable Energy and Energy Efficiency Partnership (REEEP), Austria; and the Norwegian Government.Many international experts provided input, commented on the underlying analytical work and reviewed early drafts of each chapter. Their comments and suggestions were of great value. They include:Climate Jun Arima Ministry of Economy, Trade and Industry, JapanGeorg Baeuml Volkswagen Group ResearchPaul Bailey Department for Energy and Climate Change, United KingdomMorgan Bazilian UN Industrial Development Organization, AustriaMartina Bosi World Bank, United StatesPeter Brun VestasJos Delbeke European CommissionCarmen Difiglio US Department of Energy, United StatesAndre Faaij Copernicus Institute - Utrecht University Faculty of Science, The NetherlandsJohn German ICCTDolf Gielen UN Industrial Development Organization, AustriaSimon Godwin World Energy CouncilRainer Grgen Bundesministerium fr Wirtschaft und Technologie, Germany OECD/IEA, 2009Acknowledgements 7Takashi Hongo Japan Bank for International Cooperation, JapanTrevor Houser Peterson Institute for International Economics, United StatesTor Kartevold StatoilHydro, NorwayHans-Jrgen Koch Danish Energy Agency, DenmarkKen Koyama IEEJ, JapanTakayuki Kusajima Toyota Motor Corporation, JapanMichael Liebreich New Energy Finance, United KingdomJoan MacNaughton Alstom Power Systems Ritu Mathur TERI, IndiaArne Mogren VattenfallMorten Nordahl Mller Danish Energy Agency, DenmarkPatrick Oliva MichelinA. Yasemin rc Ministry of Energy and Natural Resources, TurkeyBinu Parthan REEEP International Secretariat, AustriaBrian Pearce International Air Transport Association, SwitzerlandLiu Qiang Energy Research Institute, ChinaGustav Resch Vienna Institute of Technology, AustriaHans-Holger Rogner International Atomic Energy Agency, AustriaMatthias Ruete European Commission, BelgiumSteve Sawyer Global Wind Energy CouncilPhilippe Schulz RenaultP.R. Shukla Indian Institute of Management, IndiaAdam Sieminski Deutsche Bank, GermanyAntonio Soria IPTS Joint Research CentreMatthew Stanberry Navigant ConsultingAnil Terway Asian Development BankHal Turton Paul Scherrer Institute, SwitzerlandOras Tynkkynen Prime Ministers Office, FinlandDavid Victor Stanford Energy Program, United StatesPeter Wells Cardiff Business School OECD/IEA, 20098 World Energy Outlook 2009Gas Ali Aissaoui APICORP, Saudi ArabiaAshok Belani Schlumberger, Ltd.Kamel Bennaceur Schlumberger, Ltd.Christine Berg European Commission, BelgiumDick De Jong Clingendael Institute, The NetherlandsRalf Dickel Energy Charter SecretariatFlorence Geny StatoilHydro, NorwayLeonid Grigoriev Institute for Energy and Finances, Russian FederationHoward Gruenspecht Energy Information Administration, United StatesMasazumi Hirono Tokyo Gas Company, JapanRobert Hirsch MISI, United StatesJames Jensen Jensen Associates, United StatesMaciej Kaliski Ministry of Economy, PolandTor Kartevold StatoilHydro, NorwayBenjamin Kloos BP, United KingdomKenji Kobayashi Asia-Pacific Energy Research Centre, Japan Edward Kott LCM Research, United StatesKen Koyama Institute for Energy Economics, JapanFlynt Leverett New America Foundation and Pennsylvania State University, United StatesAlexey Mastepanov Gazprom, Russian FederationJohn Roberts PlattsBert Roukens Ministry of Economic Affairs, The NetherlandsBurkhard Schnorrenberg RWEAdam Sieminski Deutsche Bank, GermanyPierre Sigonney Total, FranceMichael Stoppard IHS CERACoby van der Linde Clingendael Institute, The NetherlandsNo van Hulst International Energy Forum, Saudi ArabiaLazlo Varro MOLFrank Verrastro CSIS, United States OECD/IEA, 2009Acknowledgements 9Charles Whitmore Energy Information Administration, United StatesSoutheast Asia Saleh Abdurrahman Ministry of Energy & Mineral Resources, IndonesiaJeff Brown FACTs Global Energy, SingaporeYoungho Chang Energy Studies Institute, SingaporeDavid Chen Deloitte & Touche LLP (UK), SingaporeWarren Fernandez Shell, SingaporeBundit Fungtammasan King Mongkuts Institute of Technology Thonburi, ThailandSyaiful Bakhri Ibrahim ASEAN Power Utilities/Authorities (HAPUA) Council, IndonesiaFukunari Kimura Economic Research Institute for ASEAN and East Asia, IndonesiaShigeru Kimura Institute of Energy Economics, JapanKenji Kobayashi Asia-Pacific Energy Research Centre, JapanKen Koyama Institute of Energy Economics, JapanTook Gee Loo Ministry of Energy, Green Technology and Water, MalaysiaHidetoshi Nishimura Economic Research Institute for ASEAN and East Asia, IndonesiaLuluk Sumiarso Ministry of Energy & Mineral Resources, IndonesiaTwarath Sutabutr Ministry of Energy, ThailandUngku Ainon Ungku Tahir Malaysia Gas Association, MalaysiaDavid Tan Energy Market Authority, SingaporeElspeth Thomson Energy Studies Institute, SingaporeYongping Zhai Asian Development Bank, PhilippinesThe individuals and organisations that contributed to this study are not responsible for any opinions or judgements contained in this study. All errors and omissions are solely the responsibility of the IEA. OECD/IEA, 200910 World Energy Outlook 2009Comments and questions are welcome and should be addressed to:Dr. Fatih BirolChief EconomistDirector, Office of the Chief EconomistInternational Energy Agency9, rue de la Fdration75739 Paris Cedex 15FranceTelephone: (33-1) 4057 6670Fax: (33-1) 4057 6659Email: [email protected] OECD/IEA, 2009 OECD/IEA, 2009ANNEXESTABLEOFCONTENTSPART BPOST-2012 CLIMATE POLICY FRAMEWORKPART CPROSPECTS FOR NATURAL GASPART AGLOBAL ENERGY TRENDS TO 2030PART DENERGY PROSPECTS IN SOUTHEAST ASIA OECD/IEA, 2009ANNEXESOVERVIEW OF ENERGY TRENDS IN SOUTHEAST ASIAASEAN-4 COUNTRY PROFILESCLIMATE CHANGE AND THE ENERGY OUTLOOKENERGY AND CO2 IMPLICATIONS OF THE 450 SCENARIOTHE 450 SCENARIO AT THE SECTORAL LEVELFUNDING LOW-CARBON GROWTHCOUNTRY AND REGIONAL PROFILES IN THE 450 SCENARIO98COSTS AND BENEFITS IN THE 450 SCENARIO7654GLOBAL ENERGY TRENDS IN THE REFERENCE SCENARIO1IMPLICATIONS OF CURRENT ENERGY POLICIES2IMPACT OF THE FINANCIAL CRISIS ON ENERGY INVESTMENT3PROSPECTS FOR NATURAL GAS PRICING14REGIONAL ANALYSIS 13OUTLOOK FOR GAS SUPPLY AND INVESTMENT12GAS RESOURCES, TECHNOLOGY AND PRODUCTION PROFILES11OUTLOOK FOR GAS DEMAND101516 OECD/IEA, 200914 World Energy Outlook 2009Foreword 3Acknowledgements 5List of Figures 21List of Tables 31List of Boxes 36List of Spotlights 38Executive Summary 41Introduction 53Scope and methodology 53Principal assumptions 56Population 56Economic growth 58Energy prices 63CO2 prices 68Technology 68Part A: Global energy trends to 2030 71 Global energy trends in the Reference Scenario 73Highlights 73World energy trends to 2030 74Primary energy mix 74Regional trends 76Sectoral trends 79Energy production and trade 79Oil market outlook 81Biofuels outlook 87Gas market outlook 88Coal market outlook 89Power and renewables 96Electricity demand 96Electricity supply 97New capacity and investment in infrastructure 102Water desalination 103Energy investment 104Implications of current energy policies 109Highlights 109Introduction 110Implications for the environment 110Global trends in energy-related CO2 emissions 110Local and regional air pollution 11312 OECD/IEA, 2009Table of contents 15Implications for energy security 115Oil security 115Natural gas security 120Electricity security 122Selected economic implications 123Spending on imports 123Export revenues 125Implications for energy poverty 128Impact of the financial crisis on energy investment 135Highlights 135How the crisis has affected energy investment so far 136Impact on oil and gas investment 138Global trends and near-term outlook 138Impact of the credit crunch on oil and gas financing 139Upstream investment 141Downstream investment 149Implications for capacity are we heading for a mid-termsupply crunch? 150Impact on biofuels investment 151Impact on coal investment 154Overview 154Impact on major coal producers 155Impact on power-sector investment 157Electricity demand 157Power-sector investment trends and outlook 158Nuclear power investment 160Renewables-based power-generation investment 161What role for government? 164Part B: Post-2012 climate policy framework 165Climate change and the energy outlook 167Highlights 167Introduction 168Greenhouse-gas emissions in the Reference Scenario 169Trends across all sectors 169Global trends in energy-related CO2 emissions 170Trends in energy-related CO2 emissions in key regions 181Sectoral trends in energy-related CO2 emissions 184The implications of the Reference Scenario for climate change 190Greenhouse-gas concentration 190Climatic consequences 191The cost of delayed action 192A global carbon budget to last a generation? 192Energy sector lock-in 19434 OECD/IEA, 200916 World Energy Outlook 2009Energy and CO2 implications of the 450 Scenario 195Highlights 195Methodology and assumptions 196Overview 196Greenhouse-gas emissions trajectory 196Policy framework 201Macroeconomic impact 203Implications for energy-related CO2 emissions 204Contribution of different abatement measures to the 450 Scenario 210Implications for energy demand 211Implications for energy supply 216Oil 216Natural gas 217Coal 218The 450 Scenario at the sectoral level 221Highlights 221Overview 222Power generation 222Carbon intensity and CO2 reductions in the power sector 223Evolution of the generation mix 228Capacity additions 234Mothballed and decommissioned plants 235Transport 236CO2 trends 237Road transport 237Aviation and maritime 241Energy trends and fuel mix 242Regional trends 243Implications for technology deployment 245Implications for transport industry structure and policy 246Industry 247Regional trends 249Sub-sectors 250Buildings 251Regional trends 252Costs and benefits in the 450 Scenario 257Highlights 257Incremental investment needs in the 450 Scenario 258Timing of incremental investment 262Overall investment in power plants 263Investment in nuclear power 266Investment in renewable energy for large-scale power production 269Investment in carbon capture and storage (CCS) 271Investment in biofuels production 273567 OECD/IEA, 2009Table of contents 17Investment in transport 274Passenger cars 274Aviation 278Other transport 278Investment in industry 278Investment in buildings 280Investment in fossil-fuel supply 282Mitigation costs per unit of CO2 reduction 282Benefits of investing in low-carbon technologies and energy efficiency 286Reduced local pollution 286Valuing the benefits of the 450 Scenario 288Investment in research, development, demonstration and deployment 290Current status 290Role for governments to enhance RD&D 291Funding low-carbon growth 293Highlights 293Introduction 294Financial support for mitigation in developing countries 294Overall level of support by OECD+ countries 296Mechanisms for delivering financial support 299Carbon markets and the Clean Development Mechanism (CDM) 299International funding pools 308Financing issues for businesses, households and governments 311Financing by businesses 313Financing by households 314Financing by governments 315Country and regional profiles in the 450 Scenario 319What is included in the profiles? 319World 322OECD+ 326The United States (US) 330The European Union (EU) 334Japan 338Other Major Economies (OME) 342Russia 346China 350Other Countries (OC) 354India 358Part C: Prospects for natural gas 363Outlook for gas demand 365Highlights 365Projected trends in natural gas demand 366Reference Scenario 3668910 OECD/IEA, 200918 World Energy Outlook 2009450 Scenario 372Understanding the drivers of gas demand 374The relationship between gas use and economic activity 375Economics of inter-fuel competition 378The impact of technological innovation and climate change 385Government policies and geopolitics 387Gas resources, technology and production profiles 389Highlights 389Gas resources and reserves 390Classifying gas resources 390Proven reserves 391Gas in place and ultimately recoverable resources 394Unconventional gas: characteristics and production technology 397Tight gas 398Coalbed methane 399Shale gas 400Gas hydrates 411Exploitation of unconventional gas resources outside North America 413Technology to exploit shale gas 413Above-ground considerations 414Long-term gas-supply cost curve 416Special analysis of the production profiles of big gas fields 417The worlds largest gas fields 417Production profiles and decline rates 421Outlook for gas supply and investment 425Highlights 425Projected trends in natural gas production and trade 426Reference Scenario 426450 Scenario 443Investment and cost outlook 445Investment requirements to 2030 445Cost trends 448Regional analysis 453Highlights 453North America 454Gas demand 454Gas supply: United States 456Gas supply: Canada and Mexico 458LNG imports 459Russia and the Caspian Region 459Gas demand 459Russian gas supply 463Caspian gas supply 471111213 OECD/IEA, 2009Table of contents 19OECD Europe/European Union 476Gas demand 476Gas supply 478Europes 2020 supply options 480The Middle East 485Regional demand and supply 485Qatar 487Iran 490Other Middle East 494Africa 497Asia-Pacific 501Latin America 504Prospects for natural gas pricing 507Highlights 507Gas pricing along the supply chain 508North America: what will drive gas prices? 509Continental Europe: what role for gas-on-gas competition? 515Asia-Pacific: how will pricing evolve in the main importing countries? 520Rest of the World: will price-setting become more market-based? 524LNG trade and the prospects for regional gas market convergence 525Contractual arrangements: more flexibility in prospect 526Spot trade: renewed growth or consolidation? 527LNG as a driver of regional gas market integration 531Part D: Energy prospects in Southeast Asia 533Overview of energy trends in Southeast Asia 535Highlights 535ASEAN energy overview 536Principal assumptions 539Economic growth 539Population 541Energy pricing and subsidies 542The Reference Scenario 543Energy demand 543Oil supply 548Natural gas supply 552Coal supply 555Power sector 556Renewables supply 562Energy-related CO2 emissions and local pollution 563Energy investment 565The 450 Scenario 566Energy demand 5671415 OECD/IEA, 200920 World Energy Outlook 2009Energy-related CO2 emissions 568Incremental investment and co-benefits 569ASEAN energy co-operation 570The ASEAN Power Grid 572The Trans-ASEAN gas pipeline 574ASEAN oil security 577Chapter 16: ASEAN-4 country profiles 581Highlights 581Indonesia 582Overview and assumptions 582Energy policy 583Energy demand 585Oil supply 588Natural gas supply 589Coal supply 590Electricity generation 592Climate change and local pollution 593Thailand 593Overview and assumptions 593Energy policy 595Energy demand 597Oil supply 599Natural gas supply 600Coal supply 600Electricity generation 600Climate change and local pollution 601Malaysia 601Overview and assumptions 601Energy policy 603Energy demand 604Oil supply 606Natural gas supply 607Coal supply 609Electricity generation 609Climate change and local pollution 610Philippines 611Overview and assumptions 611Energy policy 612Energy demand 614Oil supply 615Natural gas supply 616Coal supply 616Electricity generation 616Climate change and local pollution 61816 OECD/IEA, 200921 Table of contentsANNEXES Annex A. Tables for Reference Scenario projections 621Annex B. Sensitivity analysis 659Annex C. Abbreviations, definitions and conversion factors 665Annex D. Acronyms 675Annex E. References 679List of guresIntroduction1 Population by major region 582 Primary energy demand and GDP, 1971-2007 593 Per-capita income by region 634 Average IEA crude oil import price 655 Ratio of natural gas and coal prices to crude oil in the Reference Scenario 67Part A: Global energy trends to 2030Chapter 1. Global energy trends in the Reference Scenario1.1 World primary energy demand by fuel in the Reference Scenario 751.2 Incremental primary energy demand by fuel and region in the Reference Scenario 781.3 Per-capita primary energy demand by region in the Reference Scenario 781.4 World nal energy consumption by fuel and sector in the Reference Scenario 791.5 World fossil-energy production by region in the Reference Scenario 801.6 Change in primary oil demand by region and sector in the Reference Scenario 821.7 Passenger light-duty vehicle eet and ownership rates in key regions in the Reference Scenario 831.8 Oil production by source in the Reference Scenario 851.9 Non-OPEC oil production and the oil price in the three oil shocks 861.10 Biofuels demand by region in the Reference Scenario 881.11 Primary natural gas demand by region in the Reference Scenario 881.12 Incremental coal production by type and region in the Reference Scenario 921.13 Coal supply cash-cost curve for internationally traded steam coal for 2008 and average FOB prices for 2008 and rst-half 2009 931.14 World electricity generation by fuel in the Reference Scenario 971.15 Coal-red power-generation capacity under construction by country 991.16 Installed nuclear power-generation capacity by region in the Reference Scenario 1001.17 Share of renewables in electricity generation by region in the Reference Scenario 1011.18 Power-generation capacity additions by region, 2008-2030 102 OECD/IEA, 200922 World Energy Outlook 20091.19 Electricity generation from combined water and power plants in North Africa and the Middle East 1041.20 Cumulative investment in energy-supply infrastructure in the Reference Scenario, 2008-2030 1061.21 Share of energy investment in GDP by region in the Reference Scenario, 2008-2030 107Chapter 2. Implications of current energy policies2.1 Energy-related CO2 emissions by fuel and region in the Reference Scenario 1112.2 World energy-related CO2 emissions in WEO-2009 and WEO-2008 1112.3 Dependence on net imports of oil by major country/region in the Reference Scenario 1172.4 Dependence on net imports of natural gas by country/region in the Reference Scenario 1202.5 Expenditure on net imports of oil and gas as a share of GDP at market exchange rates in the Reference Scenario 1232.6 Annual expenditure on net imports of oil and gas in the Reference Scenario 1242.7 Cumulative oil and gas export revenues in the Reference Scenario for selected key exporters 1262.8 Oil and gas export revenues as a share of GDP at market exchange rates for selected producers in the Reference Scenario 1262.9 Electrication rates and population without access to electricity, 2008 1292.10 Number of people without access to electricity in the Reference Scenario 1312.11 Incremental electricity generation and investment in the Universal Electricity Access Case, 2008-2030 134Chapter 3. Impact of the nancial crisis on energy investment3.1 Worldwide upstream capital expenditures 1463.2 Worldwide upstream capital expenditures by type of company 1463.3 Exploration and development capital spending and average nominal IEA crude oil import price 1483.4 Global asset nancing of bio-reneries 1523.5 Status of ethanol plants in Brazil 1533.6 Historical world electricity consumption 1583.7 Global investment in new renewables-based power-generation assets 1623.8 Venture capital and private equity new investment in clean energy companies, 2001-2009 1623.9 Global orders for wind turbines 163Part B: Post-2012 climate policy frameworkChapter 4. Climate change and the energy outlook4.1 World anthropogenic greenhouse-gas emissions by source, 2005 1704.2 World anthropogenic greenhouse-gas emissions by source in the Reference Scenario 170 OECD/IEA, 2009Table of contents 234.3 Historical link between energy-related CO2 emissions and economic output, and the pathway to achieving a 450 Scenario 1724.4 Green energy components of the G20 stimulus packages, 2009-2018 1734.5 Emissions of energy-related CO2 in 2020 in the Reference Scenario and reductions if OECD countries meet their emissions targets 1764.6 Per-capita energy-related CO2 emissions in the Reference Scenario 1784.7 Energy-related CO2 intensity and GDP per-capita, 2007 1794.8 Share of global annual and cumulative energy-related CO2 emissions since 1890 in the Reference Scenario 1804.9 Cumulative energy-related CO2 emissions since 1890 in the Reference Scenario 1804.10 Energy-related CO2 emissions by region in the Reference Scenario 1814.11 How the European Union complies with its EU ETS cap in the Reference Scenario 1824.12 Chinas energy-related CO2 emissions in the Reference Scenario 1844.13 World energy-related CO2 emissions from the power sector and CO2 intensity of power plants in the Reference Scenario 1854.14 World low-carbon electricity generation in the Reference Scenario 1864.15 Average CO2 intensity of new LDVs by region in the Reference Scenario 1884.16 Industry energy-related CO2 emissions by sub-sector in the Reference Scenario 1894.17 Long-term concentration of atmospheric greenhouse gases resulting from the Reference Scenario 1914.18 Comparison of the Reference Scenario emissions trajectory with relevant studies assessed by the IPCC 1914.19 Cumulative CO2 emissions by scenario compared to various budgets 193Chapter 5. Energy and CO2 implications of the 450 Scenario5.1 Greenhouse-gas concentration trajectories by scenario 1995.2 World greenhouse-gas emissions by type in the 450 Scenario 2005.3 Policy framework in the 450 Scenario 2025.4 Abatement by policy type in the 450 Scenario relative to the Reference Scenario, 2020 2055.5 Energy-related CO2 emission reductions by region and sector in the 450 Scenario compared with the Reference Scenario, 2020 2075.6 Energy-related CO2 emissions by region in the 450 Scenario 2085.7 Per-capita energy-related CO2 emissions in selected countries in the 450 Scenario 2105.8 World energy-related CO2 emission savings by policy measure in the 450 Scenario 2115.9 World primary energy demand by fuel in the 450 Scenario 2135.10 Biofuels demand by type and scenario 2145.11 World electricity generation from non-hydro renewables by type in the 450 Scenario 2155.12 Incremental world electricity demand by sector and scenario, 2007-2030 215 OECD/IEA, 200924 World Energy Outlook 20095.13 Net oil imports in selected regions by scenario 2175.14 Cumulative OPEC oil-export revenues by scenario 2175.15 Change in coal production by scenario and region 219Chapter 6. The 450 Scenario at the sectoral level6.1 Change in energy-related CO2 emissions by sector and region in the 450 Scenario relative to 2007 levels 2226.2 Change in world energy-related CO2 emissions from the power generation sector in the 450 Scenario compared with the Reference Scenario 2246.3 CO2 intensity of electricity power plants 2246.4 CO2 emission savings by type in the power generation sector in the 450 Scenario relative to the 2007 fuel mix for selected countries 2266.5 Average long-run marginal cost (LRMC) of selected power-generation technologies in OECD+, with and without a CO2 price 2286.6 Electricity generation by type for selected countries in the Reference and 450 Scenarios 2326.7 World installed coal capacity and retirements/mothballing in the 450 Scenario 2356.8 Regional coal-red electricity generation by plant type and scenario 2366.9 Energy-related CO2 emission reductions in transport by sub-sector in the 450 Scenario compared with the Reference Scenario 2376.10 Share of global passenger vehicle sales by engine technology and scenario 2396.11 CO2 emissions per kilometre by vehicle type and scenario 2406.12 Share of global PLDV sales in 2007 and 2030 in the Reference and 450 Scenarios 2446.13 Regional fuel consumption in road transport by fuel type and scenario 2456.14 Share of PLDV sales by vehicle type for selected regions in the 450 Scenario 2456.15 World industry energy consumption and energy-related CO2 emissions by scenario 2476.16 World average annual change in energy-related CO2 emissions in industry by type and scenario 2496.17 Change in OECD+ energy demand by end use in residential sector in 450 Scenario relative to the Reference Scenario 2536.18 Change in energy-related CO2 emissions in buildings by scenario in Other Major Economies, 2007-2030 254Chapter 7. Costs and benets in the 450 Scenario7.1 Cumulative additional investment needs by sector in the 450 Scenario relative to the Reference Scenario, 2010-2030 2587.2 Cumulative incremental investment and CO2 savings in 2010-2030 by country/region in the 450 Scenario, relative to the Reference Scenario 2617.3 Global annual incremental investment and CO2 savings in the 450 Scenario relative to the Reference Scenario, 2010-2030 262 OECD/IEA, 2009Table of contents 257.4 Cumulative incremental investment in 2010-2020, by sector and region in the 450 Scenario, relative to the Reference Scenario 2637.5 Total global investment in renewables, nuclear, CCS and fossil fuels for the power generation in the 450 Scenario 2647.6 Current estimates of overnight project costs of planned nuclear power plants in the United States 2687.7 Annual investment in renewables for large-scale power generation in the 450 Scenario 2707.8 Investment in biofuels production by scenario, 2010-2030 2737.9 Cumulative incremental investment in transport by mode in the 450 Scenario relative to the Reference Scenario 2757.10 Maximum potential and incremental costs of vehicle technologies for fuel savings compared with a year-2000 gasoline ICE car 2767.11 Cumulative incremental investment in industry in the 450 Scenario relative to the Reference Scenario, 2010-2030 2797.12 Cumulative investment in fossil-fuel supply by fuel and scenario 2827.13 Mitigation costs of CO2 reductions in 2030 in the 450 Scenario, relative to the Reference Scenario 2837.14 Mitigation costs and associated CO2 reductions by power-generation technology in 2030 in the 450 Scenario, relative to the Reference Scenario 2847.15 Incremental investment needs and fuel-cost savings for industry, buildings and transport in the 450 Scenario relative to the Reference Scenario 2887.16 Oil and gas import bills in selected countries/regions by scenario 2897.17 Annual air pollution control costs by region and scenario 2907.18 IEA government spending on energy research, development and demonstration 291Chapter 8. Funding low-carbon growth 8.1 Global carbon market trading volumes and values 3008.2 Share of CDM emissions reduction by type of project, 2008 3018.3 Carbon trade and CO2 price for power generation and industry under different levels of nancing by OECD+ countries in 2020 3038.4 Potential suppliers of carbon credits given eligibility of 1.2 Gt of non- OECD abatement in power generation and industry in the 450 Scenario relative to the Reference Scenario 3048.5 Abatement costs incurred by OECD+ and non-OECD in the carbon market for power generation and industry under different levels of nancing by OECD+ countries 3058.6 Share of power generation output by status of utility, 2008 3118.7 Global additional investments in the 450 Scenario compared with the Reference Scenario by sector in 2020 based on current capital ownership 3128.8 Global additional investments in the 450 Scenario compared with the Reference Scenario by sector based on current capital ownership 312 OECD/IEA, 200926 World Energy Outlook 2009Chapter 9: Country and regional proles in the 450 Scenario9.1 World energy-related CO2 emissions 3229.2 World energy-related CO2 emissions abatement 3239.3 World power-generation capacity in the 450 Scenario 3239.4 World share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3239.5 World additional investment in the 450 Scenario relative to the Reference Scenario 3259.6 OECD+ energy-related CO2 emissions 3269.7 OECD+ energy-related CO2 emissions abatement 3279.8 OECD+ power-generation capacity in the 450 Scenario 3279.9 OECD+ share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3279.10 OECD+ additional investment in the 450 Scenario relative to the Reference Scenario 3299.11 US energy-related CO2 emissions 3309.12 US energy-related CO2 emissions abatement 3319.13 US power-generation capacity in the 450 Scenario 3319.14 US share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3319.15 US additional investment in the 450 Scenario relative to the Reference Scenario 3339.16 EU energy-related CO2 emissions 3349.17 EU energy-related CO2 emissions abatement 3359.18 EU power-generation capacity in the 450 Scenario 3359.19 EU share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3359.20 EU additional investment in the 450 Scenario relative to the Reference Scenario 3379.21 Japan energy-related CO2 emissions 3389.22 Japan energy-related CO2 emissions abatement 3399.23 Japan power-generation capacity in the 450 Scenario 3399.24 Japan share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3399.25 Japan additional investment in the 450 Scenario relative to the Reference Scenario 3419.26 OME energy-related CO2 emissions 3429.27 OME energy-related CO2 emissions abatement 3439.28 OME power-generation capacity in the 450 Scenario 3439.29 OME share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3439.30 OME additional investment in the 450 Scenario relative to the Reference Scenario 3459.31 Russia energy-related CO2 emissions 3469.32 Russia energy-related CO2 emissions abatement 3479.33 Russia power-generation capacity in the 450 Scenario 347 OECD/IEA, 2009Table of contents 279.34 Russia share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3479.35 Russia additional investment in the 450 Scenario relative to the Reference Scenario 3499.36 China energy-related CO2 emissions 3509.37 China energy-related CO2 emissions abatement 3519.38 China power-generation capacity in the 450 Scenario 3519.39 China share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3519.40 China additional investment in the 450 Scenario relative to the Reference Scenario 3539.41 OC energy-related CO2 emissions 3549.42 OC energy-related CO2 emissions abatement 3559.43 OC power-generation capacity in the 450 Scenario 3559.44 OC share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3559.45 OC additional investment in the 450 Scenario relative to the Reference Scenario 3579.46 India energy-related CO2 emissions 3589.47 India energy-related CO2 emissions abatement 3599.48 India power-generation capacity in the 450 Scenario 3599.49 India share of passenger vehicle sales by technology and average new vehicle on-road CO2 intensity in the 450 Scenario 3599.50 India additional investment in the 450 Scenario relative to the Reference Scenario 361Part C: Prospects for natural gas Chapter 10. Outlook for gas demand10.1 Year-on-year change in world primary natural gas demand by major region 36710.2 Primary natural gas demand by region in the Reference Scenario 36810.3 World primary natural gas demand by sector in the Reference Scenario 36910.4 Incremental primary natural gas demand by region and sector in the Reference Scenario, 2007-2030 37010.5 Change in primary natural gas demand by sector and region in the 450 Scenario versus the Reference Scenario, 2030 37410.6 Natural gas intensity by scenario and region 37610.7 World primary natural gas demand versus GDP by sector and scenario, 1980-2030 37710.8 Primary natural gas demand in the Reference Scenario and Higher and Lower GDP Growth Cases 37810.9 Long-run marginal cost of generation for gas-red CCGT power plants and other technologies at different fuel prices in the OECD 38110.10 Long-run marginal cost of generation for gas-red CCGT power plants compared with other technologies and fuels in OECD countries in 2015- 2020 382 OECD/IEA, 200928 World Energy Outlook 2009Chapter 11. Gas resources, technology and production proles11.1 Typology of natural gas resources 39011.2 Proven reserves of natural gas by region 39211.3 Proven reserves and reserves-to-production ratio by region 39311.4 Ultimately recoverable conventional natural gas resources by region, end-2008 39511.5 Production of unconventional gas in the United States 39811.6 United States shale gas plays 40211.7 Barnett shale wells completed and gas production 40411.8 Gas production and recovery proles of Barnett shale horizontal wells 40411.9 Production decline rates for Barnett shale horizontal wells 40511.10 Projected ultimate recoverable resources of existing Barnett shale horizontal wells 40611.11 Threshold wellhead gas price needed to yield a 10% return on capital in the main producing counties of the Barnett Shale 40711.12 Hypothetical production prole of a new gas shale play, based on the typical prole of Barnett shale wells 40911.13 Sensitivity of threshold wellhead price to increases in gas recovery and variations in capital cost per well 41111.14 Gas hydrate resource triangle 41211.15 Long-term gas-supply cost curve 41611.16 World gas production from selected super-giant and giant elds, by eld vintage 41811.17 Associated and non-associated gas production from selected super-giant and giant elds 41911.18 Typical gas production proles by category of eld 422Chapter 12. Outlook for gas supply and investment12.1 Natural gas production by region in the Reference Scenario 42712.2 Change in natural gas production by major country in the Reference Scenario 42812.3 World natural gas production by eld vintage in the Reference Scenario 43012.4 World natural gas production by type in the Reference Scenario 43112.5 Net inter-regional natural gas trade ows between major regions in the Reference Scenario, 2007, 2015 and 2030 43512.6 Transportation capacity between major regions in the Reference Scenario 43612.7 Inter-regional natural gas exports and imports by producing and importing region in the Reference Scenario 43812.8 World inter-regional natural gas trade by type in the Reference Scenario 43912.9 Natural gas liquefaction capacity in operation and under construction 43912.10 Liqueed natural gas capacity 44212.11 Change in natural gas production by region in the 450 Scenario compared with the Reference Scenario 44312.12 Natural gas trade by scenario, 2030 44512.13 Breakdown of cumulative investment in gas-supply infrastructure by activity in the Reference Scenario, 2008-2030 446 OECD/IEA, 2009Table of contents 2912.14 Change in cumulative investment in gas-supply infrastructure by region and activity in the 450 Scenario compared with the Reference Scenario, 2008-2030 44612.15 IEA Upstream Investment Cost Index and annual ination rate 44912.16 Oil price and upstream costs, 2000-2008 45012.17 Relationships between upstream cost components and oil and gas prices 45012.18 LNG liquefaction plant capital costs 451Chapter 13. Regional analysis13.1 North American natural gas demand by sector in the Reference Scenario 45413.2 North American natural gas demand by sector in the 450 Scenario 45513.3 United States natural gas supply in the Reference Scenario 45613.4 United States average gas price and drilling activity 45713.5 North American natural gas supply in the Reference Scenario 45813.6 Selected natural gas import prices versus Russian average export price 46113.7 Energy intensity of GDP in selected countries and regions 46313.8 Russias gas balance, 2008 46513.9 Eurasian main gas production areas and pipeline routes 46613.10 Russias gas production by source in the Reference Scenario 46913.11 Projected Russian gas exports to Europe and potential growth in gas export capacity 47013.12 Turkmenistan gas-export price and the European netback market value 47213.13 OECD Europe gas demand by sector in the Reference Scenario 47713.14 OECD Europe gas production by source in the Reference Scenario 47913.15 Indicative costs for potential new sources of gas delivered to Europe, 2020 48213.16 Indicative cost curves for new supplies to selected European gas markets, 2020 48513.17 Natural gas balance in the Middle East by scenario 48613.18 Qatari and Iranian gas infrastructure 48813.19 Natural gas production in selected Middle Eastern countries by scenario 49513.20 Net exports of African natural gas by scenario 49913.21 Natural gas balance in China by scenario 503Chapter 14: Prospects for natural gas pricing14.1 Oil and natural gas prices in the United States 51214.2 How oil prices affect gas prices in North America 51314.3 Monthly oil and natural gas prices in the United States 51414.4 Illustration of netback market-value pricing 51614.5 Gas trading hubs in Continental Europe 51814.6 Average spot natural gas prices in Australia, the United States and the United Kingdom 52414.7 Actual gas prices and the economic value of gas in power generation in the Middle East and North Africa, 2006 52514.8 Average international oil and gas company LNG self-contracting commitments, 2012-2015 527 OECD/IEA, 200930 World Energy Outlook 200914.9 LNG contract start-up years and durations 52814.10 Spot LNG trade by country 528Part D: Energy prospects in Southeast AsiaChapter 15. Overview of energy trends in Southeast Asia15.1 Key energy challenges in each ASEAN country 53715.2 ASEAN population by country 54215.3 ASEAN retail prices of gasoline and diesel by country, August 2009 54315.4 ASEAN primary energy demand by fuel in the Reference Scenario 54415.5 ASEAN total nal consumption by sector in the Reference Scenario 54615.6 ASEAN vehicle ownership and eet in the Reference Scenario 54715.7 ASEAN oil production by country in the Reference Scenario 54915.8 ASEAN oil net-import dependence by country in the Reference Scenario 55015.9 Spending on oil imports as a share of GDP at market exchange rates in ASEAN by country in the Reference Scenario 55115.10 ASEAN gas production by country in the Reference Scenario 55215.11 ASEAN generation capacity by country and fuel in the Reference Scenario 55715.12 ASEAN efciency improvements in coal-red generation in the Reference Scenario 55815.13 ASEAN energy-related CO2 emissions by country in the Reference Scenario 56315.14 ASEAN energy-related CO2 emissions reduction by source in the 450 Scenario compared with the Reference Scenario 56915.15 Existing and proposed ASEAN Power Grid interconnections 57315.16 The Trans-ASEAN Gas Pipeline 575Chapter 16. ASEAN-4 country proles16.1 Indonesias primary energy demand by fuel in the Reference Scenario 58616.2 Indonesias PLDV ownership and eet in the Reference Scenario 58716.3 Indonesias oil balance in the Reference Scenario 58916.4 Indonesias natural gas balance in the Reference Scenario 59016.5 Indonesian coal production by type and hard coal net exports in the Reference Scenario 59116.6 Indonesias electricity generation by fuel in the Reference Scenario 59216.7 Thailands primary energy demand by fuel in the Reference Scenario 59816.8 Malaysias primary energy demand by fuel in the Reference Scenario 60516.9 Malaysias nal energy consumption by sector in the Reference Scenario 60616.10 Malaysias electricity generation by fuel in the Reference Scenario 61016.11 Philippines primary energy demand by fuel in the Reference Scenario 61416.12 Philippine installed electricity generation capacity in the Reference Scenario 617 OECD/IEA, 2009Table of contents 31List of tablesIntroduction1 Selected major new energy-related government policies taken into account in the Reference Scenario 562 Population growth by region 573 Real GDP growth by region 624 Fossil-fuel price assumptions in the Reference Scenario 64Part A: Global energy trends to 2030Chapter 1. Global energy trends in the Reference Scenario1.1 World primary energy demand by fuel in the Reference Scenario 741.2 Primary energy demand by region in the Reference Scenario 761.3 Primary oil demand by region in the Reference Scenario 811.4 Oil production and supply by region/country in the Reference Scenario 831.5 Primary coal demand by region in the Reference Scenario 901.6 Coal production by region in the Reference Scenario 911.7 Net inter-regional hard coal trade by region in the Reference Scenario 941.8 Final electricity consumption by region in the Reference Scenario 961.9 Projected capacity additions and investment in power infrastructure by region in the Reference Scenario 1031.10 Cumulative investment in energy-supply infrastructure by region in the Reference Scenario, 2008-2030 105Chapter 2. Implications of current energy policies2.1 Emissions of major air pollutants by region in the Reference Scenario 1142.2 Net inter-regional oil trade in the Reference Scenario 1162.3 Key global oil transit choke points 1182.4 Electricity access in the Reference Scenario 132Chapter 3. Impact of the nancial crisis on energy investment3.1 Total investment plans of 50 leading oil and gas companies 1403.2 Major upstream oil and gas projects deferred by at least 18 months, suspended or cancelled 1423.3 Major oil renery projects deferred by at least 18 months, suspended or cancelled 1493.4 Status of biofuel-production capacity worldwide 1543.5 Production, exports and investment of 25 leading coal companies 1553.6 Electricity demand growth rates for selected countries 157Part B: Post-2012 climate policy frameworkChapter 4. Climate change and the energy outlook4.1 Examples of new policies incorporated in the Reference Scenario 1734.2 National greenhouse-gas emissions goals in OECD countries 175 OECD/IEA, 200932 World Energy Outlook 20094.3 Worlds 40 biggest emitters of energy CO2 per capita, 2007 1774.4 Energy-related CO2 emissions by sector in the Reference Scenario 1854.5 Installed nuclear capacity by region in the Reference Scenario 1874.6 Cumulative CO2 budgets for 2000-2049 corresponding with probabilities of keeping the global temperature increase below 2 Celsius 193Chapter 5. Energy and CO2 implications of the 450 Scenario5.1 World greenhouse-gas emissions trajectories in the 450 Scenario 2005.2 Fossil-fuel price assumptions in the 450 Scenario 2045.3 CO2 savings due to national policies and measures and sectoral approaches, 2020 2065.4 Domestic CO2 emissions by region in the 450 Scenario 2105.5 World primary energy demand by fuel in the 450 Scenario 2125.6 Net natural gas imports in key importing regions by scenario 218Chapter 6. The 450 Scenario at the sectoral level6.1 Electricity generation by fuel and region in the 450 Scenario 2296.2 Capacity additions by fuel and region in the 450 Scenario 2346.3 World transport energy consumption by fuel and energy-related CO2 emissions in the 450 Scenario 2436.4 World industry energy consumption by fuel and energy-related CO2 emissions in the 450 Scenario 2506.5 World buildings energy consumption by fuel and energy-related CO2 emissions in the 450 Scenario 251 Chapter 7. Costs and benets in the 450 Scenario7.1 World cumulative incremental investment (2010-2030) and CO2 savings (2030) in power generation and biofuels supply in the 450 Scenario, relative to the Reference Scenario 2597.2 World cumulative incremental investment (2010-2030) and CO2 savings (2030) in end use in the 450 Scenario, relative to the Reference Scenario 2597.3 Change in cumulative power-plant investment and capacity in the 450 Scenario relative to the Reference Scenario 2657.4 Cumulative investment in power plant by country/region in the 450 Scenario 2667.5 Cumulative investment in renewables, CCS and nuclear power by country/region in the 450 Scenario 2667.6 Nuclear capacity under construction as of end-August 2009 2677.7 Investment and generating costs of renewables for power generation in the 450 Scenario 2707.8 The top ten wind turbine suppliers, by global market share 2717.9 Cumulative incremental investment in 2010-2030 in renewable energy in buildings, in the 450 Scenario relative to the Reference Scenario 2807.10 Average annual incremental investment by country/region and sector in the 450 Scenario relative to the Reference Scenario, 2010-2020 281 OECD/IEA, 2009Table of contents 337.11 Average annual incremental investment by country/region and sector in the 450 Scenario relative to the Reference Scenario, 2021-2030 2817.12 Emissions of major air pollutants by region in the 450 Scenario 2877.13 Estimated life-years lost due to exposure to anthropogenic emissions of PM2.5 288Chapter 8. Funding low-carbon growth 8.1 Incremental investment needs by region and sector in the 450 Scenario relative to the Reference Scenario in 2020 2958.2 Financial support from OECD+ to non-OECD countries under different funding assumptions, 2020 2978.3 Financial support of specic abatement measures in selected sectors in non-OECD countries under different funding assumptions, 2020 2988.4 World Bank climate funds and facilities, end-2008 3098.5 National proposals for raising international funds for mitigation and adaptation 310 Chapter 9: Country and regional proles in the 450 Scenario9.1 World key indicators 3229.2 World energy demand and electricity generation 3249.3 OECD+ key indicators 3269.4 OECD+ energy demand and electricity generation 3289.5 US key indicators 3309.6 US energy demand and electricity generation 3329.7 EU key indicators 3349.8 EU energy demand and electricity generation 3369.9 Japan key indicators 3389.10 Japan energy demand and electricity generation 3409.11 OME key indicators 3429.12 OME energy demand and electricity generation 3449.13 Russia key indicators 3469.14 Russia energy demand and electricity generation 3489.15 China key indicators 3509.16 China energy demand and electricity generation 3529.17 OC key indicators 3549.18 OC energy demand and electricity generation 3569.19 India key indicators 3589.20 India energy demand and electricity generation 360Part C: Prospects for natural gas Chapter 10. Outlook for gas demand10.1 Primary natural gas demand by region in the Reference Scenario 36610.2 Primary natural gas demand by region in the 450 Scenario 373 OECD/IEA, 200934 World Energy Outlook 200910.3 Summary of main drivers of gas demand by sector 37510.4 Assumed cost and technical parameters of power plants in the OECD starting commercial operation in 2015-2020 38110.5 World primary natural gas demand in the Reference Scenario and the Higher and Lower Energy Prices Cases 385 Chapter 11. Gas resources, technology and production proles11.1 Major conventional gas discoveries and reserve additions, 2008 39411.2 Conventional natural gas resources by region, end-2008 39511.3 Global unconventional natural gas resources in place 39711.4 Principal physical properties of the leading shale-gas plays in North America 40811.5 The worlds biggest conventional gas elds by peak production 42011.6 The worlds biggest conventional gas elds by initial reserves 42011.7 Plateau production characteristics by size, location and type of gas eld 42311.8 Production-weighted, average observed decline rates by size, location and type of gas eld 423Chapter 12. Outlook for gas supply and investment12.1 Natural gas production by country/region in the Reference Scenario 42912.2 Flared gas based on satellite data 43112.3 Net inter-regional natural gas trade in the Reference Scenario 43412.4 Natural gas liquefaction capacity 44012.5 Natural gas liquefaction capacity to be commissioned in 2009-2013 44112.6 Natural gas production by country/region in the 450 Scenario 44412.7 Cumulative investment in gas-supply infrastructure by region and activity in the Reference Scenario, 2008-2030 447Chapter 13. Regional analysis13.1 North American existing and planned LNG import capacity 45913.2 Selected current and prospective gas elds in Russia 46713.3 Natural gas production of Caspian region producers and Russia in the Reference Scenario 47113.4 Europes gas balance by scenario 47813.5 LNG supplies and indicative total costs for new supplies to Europe, 2020 48113.6 Pipeline routes, assumptions and indicative costs for new supplies to Europe, 2020 48313.7 Major gas projects in Qatar based on North Field gas reserves 48913.8 South Pars development phases 49213.9 Africas proven natural gas reserves and production 49813.10 Algerias gas export capacity 50013.11 Australian LNG projects 502 OECD/IEA, 2009Table of contents 35Chapter 14: Prospects for natural gas pricing14.1 Composition of wholesale gas transactions by price-formation mechanism and region, 2007 51014.2 Impacts of changes in oil prices on gas prices in the United States 512Part D: Energy prospects in Southeast AsiaChapter 15. Overview of energy trends in Southeast Asia15.1 Key energy indicators for ASEAN by country 53815.2 Energy sector overview for ASEAN by country 53915.3 ASEAN key economic indicators and GDP growth assumptions by country in the Reference Scenario 54015.4 ASEAN oil rening capacity and planned additions by country 54915.5 ASEAN existing and planned LNG infrastructure 55315.6 Plans for nuclear power plant construction in ASEAN by country 55815.7 Current status of the ASEAN power utilities by country 56015.8 ASEAN electricity access by country, 2008 56115.9 Biofuels policies in selected ASEAN countries 56215.10 ASEAN emissions of major pollutants in the Reference Scenario 56515.11 ASEAN cumulative investment in energy-supply infrastructure in the Reference Scenario 56615.12 ASEAN primary energy demand in the 450 Scenario 56815.13 ASEAN Plan of Action for Energy Co-operation, 2010-2015 57115.14 Existing bilateral gas pipeline interconnections 57415.15 Planned gas pipeline interconnections 576Chapter 16. ASEAN-4 country proles16.1 Key energy indicators for Indonesia 58216.2 GDP and population growth assumptions in Indonesia in the Reference Scenario 58316.3 Indonesias energy-related CO2 and local air pollutant emissions in the Reference Scenario 59316.4 Key energy indicators for Thailand 59416.5 GDP and population growth assumptions in Thailand in the Reference Scenario 59516.6 Thailands energy-related CO2 and local air pollutant emissions in the Reference Scenario 60116.7 Key energy Indicators for Malaysia 60216.8 GDP and population growth assumptions in Malaysia in the Reference Scenario 60316.9 Malaysias energy-related CO2 and local air pollutant emissions in the Reference Scenario 61116.10 Key energy indicators for Philippines 61116.11 GDP and population growth assumptions in Philippines in the Reference Scenario 61216.12 Philippine energy-related CO2 and local air pollutant emissions in the Reference Scenario 618 OECD/IEA, 200936 World Energy Outlook 2009List of boxesIntroduction1 To what extent are high oil prices to blame for the economic crisis? 60Part A: Global energy trends to 2030Chapter 1. Global energy trends in the Reference Scenario1.1 Interpreting the Reference Scenario results 751.2 Impact of falling investment on oileld decline rates 861.3 Changes in power-generation projections in this years Outlook 98Chapter 2. Implications of current energy policies2.1 The future of the IEA oil emergency response mechanisms 1192.2 The 2009 Russia-Ukraine gas dispute 1212.3 The implications of phasing out energy subsidies 1252.4 The Universal Electricity Access Case 132Chapter 3. Impact of the nancial crisis on energy investment3.1 How has the crisis affected energy demand so far? 137Part B: Post-2012 climate policy frameworkChapter 4. Climate change and the energy outlook4.1 Embedded energy 1794.2 Analysis of the EU ETS in the Reference Scenario 1824.3 Environmental impacts of a 6C temperature rise 192Chapter 5. Energy and CO2 implications of the 450 Scenario5.1 Key new features of WEO-2009 climate change analysis 1975.2 Carbon markets and carbon prices in the 450 Scenario 208Chapter 6. The 450 Scenario at the sectoral level6.1 The policy framework for the power generation sector in the 450 Scenario 2236.2 The policy framework for the transport sector in the 450 Scenario 2386.3 Fuel-pricing policy and its impact on the sectoral agreement 2406.4 The policy framework for the industry sector in the 450 Scenario 2486.5 The policy framework for the buildings sector in the 450 Scenario 252Chapter 7. Costs and benets in the 450 Scenario7.1 Calculating the investment needs 2607.2 Uncertainties about calculating mitigation costs for transport 285 OECD/IEA, 2009Table of contents 37Chapter 8. Funding low-carbon growth 8.1 WEO-2009 carbon-ow modelling 3028.2 Negative-cost efciency investments? Turning potential into reality 3158.3 Financing research and development of clean energy 3168.4 Greening the national tax system 317Part C: Prospects for natural gas Chapter 10. Outlook for gas demand10.1 The potential for natural gas vehicles 371Chapter 11. Gas resources, technology and production proles11.1 Resource and reserve denitions 39211.2 Assessments of unconventional resources 39611.3 Shale-gas production technology 40111.4 The IEA eld-by-eld gas production database 41811.5 Dening eld production proles, plateaus and decline rates 421Chapter 12. Outlook for gas supply and investment12.1 Modelling natural gas production and trade in WEO-2009 426Chapter 13. Regional analysis13.1 Azerbaijan: a tale of higher GDP and lower energy demand 46413.2 South Yolotan/Osman: a Turkmen super-giant 47413.3 Qatars booming LNG industry 490Chapter 14: Prospects for natural gas pricing14.1 Pricing mechanisms dened 51114.2 The mechanics of netback market value pricing 51614.3 Evolution of the pricing of Japans LNG imports 52014.4 The Australian gas market: a case study of competitive pricing in Asia-Pacic 523Part D: Energy prospects in southeast AsiaChapter 15. Overview of energy trends in Southeast Asia15.1 Nuclear power: what role could it play in ASEAN? 54515.2 Energy strategy for an island state: Singapore 54715.3 Bypassing piracy in the Strait of Malacca 55115.4 Territorial claims in the South China Sea 55515.5 Increasing the role of renewables in Southeast Asia 564Chapter 16. ASEAN-4 country proles16.1 The important role of PETRONAS in the Malaysian economy 60816.2 Geothermal in Philippines 617 OECD/IEA, 200938 World Energy Outlook 2009List of spotlightsPart A: Global energy trends to 2030Chapter 1. Global energy trends in the Reference ScenarioHow do the energy demand projections compare with WEO-2008? 77Chapter 2. Implications of current energy policiesDo energy producers need greater security of demand? 127Chapter 3. Impact of the nancial crisis on energy investmentCanadian oil sands: is the boom over or taking a breather? 147Part B: Post-2012 climate policy frameworkChapter 4. Climate change and the energy outlookIs the nancial crisis an unexpected opportunity to step up the climatechange effort? 171Chapter 5. Energy and CO2 implications of the 450 ScenarioOther possible stabilisation targets where does the current debate stand? 198Chapter 7. Costs and benets in the 450 ScenarioCO2 savings for free? 277Part C: Prospects for natural gas Chapter 10. Outlook for gas demandDoes carbon pricing mean more or less gas use? 384Chapter 11. Gas resources, technology and production prolesWhat might prevent the take-off of unconventional gas production worldwide? 415Chapter 12. Outlook for gas supply and investmentIs peak gas on the horizon? 433Chapter 14: Prospects for natural gas pricingIs the Gas Exporting Countries Forum the new Gas-OPEC? 530Part D: Energy prospects in Southeast AsiaChapter 15. Overview of energy trends in Southeast AsiaTime for Southeast Asia to reduce its reliance on exports for growth? 541 OECD/IEA, 2009Table of contents 39World Energy Outlook SeriesWorld Energy Outlook 1993World Energy Outlook 1994World Energy Outlook 1995World Energy Outlook 1996World Energy Outlook 1998World Energy Outlook 1999 Insights Looking at Energy Subsidies: Getting the Prices RightWorld Energy Outlook 2000World Energy Outlook 2001 Insights Assessing Todays Supplies to Fuel Tomorrows GrowthWorld Energy Outlook 2002 World Energy Investment Outlook 2003 Insights World Energy Outlook 2004World Energy Outlook 2005 Middle East and North Africa InsightsWorld Energy Outlook 2006 World Energy Outlook 2007 China and India Insights World Energy Outlook 2008 World Energy Outlook 2009More information available at www.worldenergyoutlook.org OECD/IEA, 2009 OECD/IEA, 200941 Executive summaryEXECUTIVE SUMMARYThe past 12 months have seen enormous upheavals in energy markets around the world, yet the challenges of transforming the global energy system remain urgent and daunting. The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets, particularly in the next few years. World energy demand in aggregate has already plunged with the economic contraction; how quickly it rebounds depends largely on how quickly the global economy recovers. Countries have responded to the threat of economic melt-down as a result of the financial crisis with prompt and co-ordinated fiscal and monetary stimuli on an unprecedented scale. In many cases, stimulus packages have included measures to promote clean energy with the aim of tackling an even bigger, and just as real, long-term threat that of disastrous climate change.How we rise to that challenge will have far-reaching consequences for energy markets. As the leading source of greenhouse-gas emissions, energy is at the heart of the problem and so must be integral to the solution. The time to act has arrived: the 15th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) in Copenhagen (December 2009) presents a decisive opportunity to negotiate a successor treaty to the Kyoto Protocol one that puts the world onto a truly sustainable energy path. The World Energy Outlook 2009 (WEO-2009)quantifies the challenge and shows what is required to overcome it. The scale and breadth of the energy challenge is enormous far greater than many people realise. But it can and must be met. The recession, by curbing the growth in greenhouse-gas emissions, has made the task of transforming the energy sector easier by giving us an unprecedented, yet relatively narrow, window of opportunity to take action to concentrate investment on low-carbon technology. Energy-related carbon-dioxide (CO2) emissions in 2009 will be well below what they would have been had the recession not occurred. But this saving will count for nothing if a robust deal is not reached in Copenhagen and emissions resume their upward path. Households and businesses are largely responsible for making the required investments, but governments hold the key to changing the mix of energy investment. The policy and regulatory frameworks established at national and international levels will determine whether investment and consumption decisions are steered towards low-carbon options. Accordingly, this Outlook presents the results of two scenarios: a Reference Scenario, which provides a baseline picture of how global energy markets would evolve if governments make no changes to their existing policies and measures; and a 450 Scenario, which depicts a world in which collective policy action is taken to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of CO2-equivalent (ppm CO2-eq), an objective that is gaining widespread support around the world. OECD/IEA, 200942 World Energy Outlook 2009The financial crisis brings a temporary reprieve from rising fossil-energy use Global energy use is set to fall in 2009 for the first time since 1981 on any significant scale as a result of the financial and economic crisis; but, on current policies, it would quickly resume its long-term upward trend once economic recovery is underway. In our Reference Scenario, world primary energy demand is projected to increase by 1.5% per year between 2007 and 2030, from just over 12 000 million tonnes of oil equivalent (Mtoe) to 16 800 Mtoe an overall increase of 40%. Developing Asian countries are the main drivers of this growth, followed by the Middle East. Projected demand growth is slower than in WEO-2008, reflecting mainly the impact of the crisis in the early part of the projection period, as well as of new government policies introduced during the past year. On average, demand declines marginally in 2007-2010, as a result of a sharp drop in 2009 preliminary data point to a fall in that year of up to 2%. Demand growth rebounds thereafter, averaging 2.5% per year in 2010-2015. The pace of demand growth slackens progressively after 2015, as emerging economies mature and global population growth slows.Fossil fuels remain the dominant sources of primary energy worldwide in the Reference Scenario, accounting for more than three-quarters of the overall increase in energy use between 2007 and 2030. In absolute terms, coal sees by far the biggest increase in demand over the projection period, followed by gas and oil. Yet oil remains the single largest fuel in the primary fuel mix in 2030, even though its share drops, from 34% now to 30%. Oil demand (excluding biofuels) is projected to grow by 1% per year on average over the projection period, from 85 million barrels per day in 2008 to 105 mb/d in 2030. All the growth comes from non-OECD countries: OECD demand actually falls. The transport sector accounts for 97% of the increase in oil use. As conventional oil production in countries not belonging to the Organization of the Petroleum Exporting Countries (OPEC) peaks around 2010, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources. The main driver of demand for coal and gas is the inexorable growth in energy needs for power generation. World electricity demand is projected to grow at an annual rate of 2.5% to 2030. Over 80% of the growth takes place in non-OECD countries. Globally, additions to power-generation capacity total 4 800 gigawatts (GW) by 2030 almost five times the existing capacity of the United States. The largest additions (around 28% of the total) occur in China. Coal remains the backbone fuel of the power sector, its share of the global generation mix rising by three percentage points to 44% in 2030. Nuclear power output grows in all major regions bar Europe, but its share in total generation falls.The use of non-hydro modern renewable energy technologies (including wind, solar, geothermal, tide and wave energy, and bio-energy) sees the fastest rate of increase in the Reference Scenario. Most of the increase is in power generation: the share of non-hydro renewables in total power output rises from 2.5% in 2007 to 8.6% in 2030, with wind power seeing the biggest absolute increase. The consumption of biofuels for transport also rises strongly. The share of hydropower, by contrast, drops from 16% to 14%. OECD/IEA, 2009Executive summary 43Falling energy investment will have far-reaching consequencesEnergy investment worldwide has plunged over the past year in the face of a tougher financing environment, weakening final demand for energy and lower cash flow. All these factors stem from the financial and economic crisis. Energy companies are drilling fewer oil and gas wells, and cutting back spending on refineries, pipelines and power stations. Many ongoing projects have been slowed and a number of planned projects have been postponed or cancelled. Businesses and households are spending less on new, more efficient energy-using appliances, equipment and vehicles, with important knock-on effects for the efficiency of energy use in the long term. In the oil and gas sector, most companies have announced cutbacks in capital spending, as well as project delays and cancellations, mainly as a result of lower cash flow. We estimate that global upstream oil and gas investment budgets for 2009 have been cut by around 19% compared with 2008 a reduction of over $90 billion. Oil sands projects in Canada account for the bulk of the suspended oil capacity. Power-sector investment is also being severely affected by financing difficulties, as well as by weak demand, which is reducing the immediate need for new capacity additions. In late 2008 and early 2009, investment in renewables fell proportionately more than that in other types of generating capacity; for 2009 as a whole, it could drop by close to one-fifth. Without the stimulus provided by government fiscal packages, renewables investment would have fallen by almost 30%. Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty. Any prolonged downturn in investment threatens to constrain capacity growth in the medium term, particularly for long lead-time projects, eventually risking a shortfall in supply. This could lead to a renewed surge in prices a few years down the line, when demand is likely to be recovering, and become a constraint on global economic growth. These concerns are most acute for oil and electricity supplies. Any such shortfalls could, in turn, undermine the sustainability of the economic recovery. Weaker fossil-fuel prices are also undermining the attractiveness of investments in clean energy technology (though recent government moves to encourage such investment, as part of their economic stimulus packages, are helping to counter this effect). Cutbacks in energy-infrastructure investments also threaten to impede access by poor households to electricity and other forms of modern energy. The financial crisis has cast a shadow over whether all the energy investment needed to meet growing energy needs can be mobilised. The capital required to meet projected energy demand through to 2030 in the Reference Scenario is huge, amounting in cumulative terms to $26 trillion (in year-2008 dollars) equal to$1.1 trillion (or 1.4% of global gross domestic product [GDP]) per year on average. The power sector requires 53% of total investment. Over half of all energy investment worldwide is needed in developing countries, where demand and production are projected to increase fastest. With little prospect of a quick return to the days of cheap and easy credit, financing energy investment will, in most cases, be more difficult and costly in the medium term than it was before the crisis took hold. OECD/IEA, 200944 World Energy Outlook 2009Current policies put us on an alarming fossil-energy pathContinuing on todays energy path, without any change in government policy, would mean rapidly increasing dependence on fossil fuels, with alarming consequences for climate change and energy security. The Reference Scenario sees a continued rapid rise in energy-related CO2 emissions through to 2030, resulting from increased global demand for fossil energy. Having already increased from 20.9 gigatonnes (Gt) in 1990 to 28.8 Gt in 2007, CO2 emissions are projected to reach 34.5 Gt in 2020 and 40.2 Gt in 2030 an average rate of growth of 1.5% per year over the full projection period. In 2020, global emissions are 1.9 Gt or 5% lower than in the Reference Scenario of WEO-2008. The economic crisis and resulting lower fossil-energy demand growth account for three-quarters of this improvement, while government stimulus spending to promote low-carbon investments and other new energy and climate policies account for the remainder. Preliminary data suggest that global energy-related emissions of CO2 may decline in 2009 possibly by around 3% although they are expected to resume an upward trajectory from 2010. Non-OECD countries account for all of the projected growth in energy-related CO2 emissions to 2030. Three-quarters of the 11-Gt increase comes from China (where emissions rise by 6 Gt), India (2 Gt) and the Middle East (1 Gt). OECD emissions are projected to fall slightly, due to a slowdown in energy demand (resulting from the crisis in the near term and from big improvements in energy efficiency in the longer term) and the increased reliance on nuclear power and renewables, in large part due to the policies already adopted to mitigate climate change and enhance energy security. By contrast, all major non-OECD countries see their emissions rise. However, while non-OECD countries today account for 52% of the worlds annual emissions of energy-related CO2, they are responsible for only 42% of the worlds cumulative emissions since 1890.These trends would lead to a rapid increase in the concentration of greenhouse gases in the atmosphere. The rate of growth of fossil-energy consumption projected in the Reference Scenario takes us inexorably towards a long-term concentration of greenhouse gases in the atmosphere in excess of 1 000 ppm CO2-eq. The CO2 concentration implied by the Reference Scenario would result in the global average temperature rising by up to 6C. This would lead almost certainly to massive climatic change and irreparable damage to the planet.The Reference Scenario trends also heighten concerns about the security of energy supplies. While the OECD imports less oil in 2030 than today in the Reference Scenario, some non-OECD countries, notably China and India, see big increases in their imports. Most gas-importing regions, including Europe and developing Asia, also see their net imports rise. The Reference Scenario projections imply an increasingly high level of spending on energy imports, representing a major economic burden for importers. Oil prices are assumed to fall from the 2008 level of $97 per barrel to around $60 per barrel in 2009 (roughly the level of mid-2009), but then rebound with the economic recovery to reach $100 per barrel by 2020 and $115 per barrel by 2030 (in year-2008 dollars). As a result, OECD countries as a group are projected to spend on average close to 2% of their GDP on oil and gas imports to 2030. The burden is even OECD/IEA, 2009Executive summary 45higher in most importing non-OECD countries. On a country basis, China overtakes the United States soon after 2025 to become the worlds biggest spender on oil and gas imports (in monetary terms) while Indias spending on oil and gas imports surpasses that of Japan soon after 2020 to become the worlds third-largest importer. The increasing concentration of the worlds remaining conventional oil and gas reserves in a small group of countries, including Russia and resource-rich Middle East countries, would increase their market power and ability to influence prices. Expanding access to modern energy for the worlds poor remains a pressing matter. We estimate that 1.5 billion people still lack access to electricity well over one-fifth of the worlds population. Some 85% of those people live in rural areas, mainly in Sub-Saharan Africa and South Asia. In the Reference Scenario, the total number drops by only around 200 million by 2030, though the number actually increases in Africa. Expanding access to modern energy is a necessary condition for human development. With appropriate policies, universal electricity access could be achieved with additional annual investment worldwide of $35 billion (in year-2008 dollars) through to 2030, or just 6% of the power-sector investment projected in the Reference Scenario. The accompanying increase in primary energy demand and CO2 emissions would be very modest.Limiting temperature rise to 2C requires a low-carbon energy revolutionAlthough opinion is mixed on what might be considered a sustainable, long-term level of annual CO2 emissions for the energy sector, a consensus on the need to limit the global temperature increase to 2C is emerging. To limit to 50% the probability of a global average temperature increase in excess of 2C, the concentration of greenhouse gases in the atmosphere would need to be stabilised at a level around 450 ppm CO2-eq. We show how this objective can be achieved in the 450 Scenario, through radical and co-ordinated policy action across all regions. In this scenario, global energy-related CO2 emissions peak at 30.9 Gt just before 2020 and decline thereafter to 26.4 Gt in 2030 2.4 Gt below the 2007 level and 13.8 Gt below that in the Reference Scenario. These reductions result from a plausible combination of policy instruments notably carbon markets, sectoral agreements and national policies and measures tailored to the circumstances of specific sectors and groups of countries. Only by taking advantage of mitigation potential in all sectors and regions can the necessary emission reductions be achieved. OECD+ countries (a group that includes the OECD and non-OECD EU countries) are assumed to take on national emission-reduction commitments from 2013. All other countries are assumed to adopt domestic policies and measures, and to generate and sell emissions credits. After 2020, commitments are extended to Other Major Economies a group comprising China, Russia, Brazil, South Africa and the Middle East.The reductions in energy-related CO2 emissions required in the 450 Scenario (relative to the Reference Scenario) by 2020 just a decade away are formidable, but the financial crisis offers what may be a unique opportunity to take the necessary steps as the political mood shifts. At 30.7 Gt, emissions in 2020 in the OECD/IEA, 200946 World Energy Outlook 2009450 Scenario are 3.8 Gt lower than in the Reference Scenario. In non-OECD countries, national policies currently under consideration, along with sectoral approaches in transport and industry, yield 1.6 Gt of emission abatement. But this abatement will not happen in the absence of an appropriate international framework. The challenge for international negotiators is to find instruments that will give the right level of additional incentive to ensure that the necessary measures are implemented. With national policies, China alone accounts for 1 Gt of emissions reductions in the 450 Scenario, placing the country at the forefront of global efforts to combat climate change. The remaining reductions in 2020 are delivered by OECD+ countries through an emissions cap in the power and industry sectors, domestic policies, and by financing, through the carbon market, additional abatement in non-OECD countries. In 2020, the OECD+ carbon price reaches $50 per tonne of CO2. The financial and economic crisis has temporarily slowed the lock-in of high-carbon energy technologies. With the prospect of demand picking up over the next few years, it is crucial to put in place an agreement providing clear economic signals to encourage the deployment of low-carbon technologies. With a new international climate policy agreement, a comprehensive and rapid transformation in the way we produce, transport and use energy a veritable low-carbon revolution could put the world onto this 450-ppm trajectory. Energy needs to be used more efficiently and the carbon content of the energy we consume must be reduced, by switching to low- or zero-carbon sources. In the 450 Scenario, primary energy demand grows by 20% between 2007 and 2030. This corresponds to an average annual growth rate of 0.8%, compared with 1.5% in the Reference Scenario. Increased energy efficiency in buildings and industry reduces the demand for electricity and, to a lesser extent, fossil fuels. The average emissions intensity of new cars is reduced by more than half, cutting oil needs. The share of non-fossil fuels in the overall p