fatih birol
DESCRIPTION
An outlook for natural gasTRANSCRIPT
© OECD/IEA 2013
An outlook for natural gas
Fatih BirolIEA Chief Economist
22 January 2013
© OECD/IEA 2013
The context
Foundations of global natural gas markets are shifting Advances in technology have led to a surge in unconventional gas
supply in North America
Strong divergence in regional gas market conditions & prices Many countries are lining up to emulate North America’s success;
notably in China, Australia, Latin America & parts of Europe But concerns remain that production might involve unacceptable
environmental & social damage Major implications for local communities, land use & water resource Serious hazards include the potential for air & water pollution
Improperly addressed, these concerns could hold back, & perhaps halt, the unconventional gas revolution
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De-coupling of regional gas prices
At its lowest level in 2012, natural gas in the United States tradedat around one-fifth of import prices in Europe & one-eighth of those in Japan
0
2
4
6
8
10
12
14
16
18
20
1991 1994 1997 2000 2003 2006 2009 2012
$201
2/M
Btu
US (Henry Hub)
Europe (German import)
Japan (LNG import)
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Canada following the unconventional path
Canadian oil & gas production
Production from oil sands & from shale make Canadaone of the pioneers of unconventional resource development
Unconventional gas
Conventional gas
Unconventional oil
Conventional oil
mboe/d
5
10
1980 1990 2000 2010 2020 2030 2035
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A United States oil & gas transformation
US oil & gas production
The surge in unconventional oil & gas production has implications well beyond the United States
Unconventional gas
Conventional gas
Unconventional oil
Conventional oil
mboe/d
5
10
15
20
25
1980 1990 2000 2010 2020 2030 2035
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A changing power mix
Over the past 5 years, natural gas & renewables were the main sources of growthin electricity generation in the United States, with implications for GHG emissions
-300 -200 -100 0 100 200 300
Coal
Oil
Nuclear
Renewables
Natural gas
TWh
US electricity generation growth, 2006-2011
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Growth in world coal demand, 2011
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Japan Russia World EuropeanUnion
UnitedStates
LatinAmerica
DevelopingAsia
European Union coal demand rose by a historical 7% in 2011, benefitting from cheap US imports
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Different trends in oil & gasimport dependency
Dependence on imported oil and gas rises in many countries, though the US swims against the tide
Net oil & gas import dependency in selected countries
0%
20%
40%
60%
80%
100%
20% 40% 60% 80% 100%Oil imports
Gas Imports
United States
ChinaIndia
European Union
Japan20102035
20%Gas Exports
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The (gradual) spread of the unconventional revolution
0 100 200 300 400 500 600
European UnionAlgeria
IndonesiaMexico
ArgentinaRussia
IndiaAustralia
CanadaChina
United States
bcm
Shale
Coalbed methane
Tight
Outside Canada & the United States, 80% of anticipated growthin unconventional gas production takes place after 2020
Unconventional gas production, 2035
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Looking to the future, emerging economies will drive energy demand growth
Share of global energy demand
Global energy demand rises by over one-third in the period to 2035, underpinned by rising living standards in China, India & the Middle East
20%
40%
60%
80%
100%
1975 2010 2035
Middle East
India
China
OECD
Non-OECDRest of non-OECD6 030 Mtoe 12 380 Mtoe 16 730 Mtoe
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3 000 4 000 5 000 6 000TWh
2 000
The power sector points to the diverse drivers for gas demand growth
A mixture of factors leads to increased gas use: cheaper gas, nuclear phase-outs,a desire to diversify the fuel mix, and local and global environmental concerns
Change in power generation, 2010-2035
-1 000 0 1 000
Japan
European Union
United States
China
TWh
Coal Gas Nuclear Renewables
India
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The shifting balance of supply & demand points to a more globalised market
Major global gas trade flows, 2010
Rising supplies of unconventional gas & LNG help to diversify trade flows,putting pressure on conventional gas suppliers & oil-linked pricing mechanisms
Major global gas trade flows, 2035
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Conclusions
Factors on both the supply & demand side pushing gas towardsa higher share in the global energy mix
Changing patterns of gas production & use have profound implications for global gas trade, with new connections between regional markets
Improperly addressed, social & environmental concerns couldhold back the unconventional gas revolution
Natural gas has a role to play in moving us towardsa low-carbon energy economy
IEA-led high-level forum can address key policy & regulatory issues for safe & sustainable gas development, building on the “Golden Rules”