global energy trends: focus on oil and gas
DESCRIPTION
Maria van der Hoeven, Executive Director of the International Energy Agency presentation at The Future of Energy on Global Energy Trends: Focus on oil and gasTRANSCRIPT
© OECD/IEA 2011
Maria van der Hoeven Executive Director
International Energy Agency
International Seminar: “The Future of Energy” Mexico City, 29 February 2012
Global Energy Trends: Focus on oil & gas
© OECD/IEA 2011
Oil prices remain high
Crude prices remain high in historical terms. Oil burden in 2011 marginally exceeds 2008, in both
years standing above 5% of world GDP. Longer term trend to higher prices, but short-term risk
of derailing economic recovery.
Crude FuturesFront Month Close
708090
100110120130
Feb 11 May 11 Aug 11 Nov 11 Feb 12
$/bbl
NYMEX WTI ICE Brent
Source: Platts
World: Oil Burden & Price
0%1%2%3%4%5%6%7%8%9%
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Nom
inal
Oil
Expe
nditu
res
as %
of
Nom
inal
GD
P
152535455565758595105115
$/bbl
Oil Burden WTI (real, 2008 base)
Contributing to the next shock?
1st oil shock
2nd oil shock
3rd oil shock
Post-recession recoveries
* ICE Brent from 2009 onwards
© OECD/IEA 2011
Oil prices remain high
Crude prices remain high in historical terms. Oil burden in 2011 marginally exceeds 2008, in both
years standing above 5% of world GDP. Longer term trend to higher prices, but short-term risk
of derailing economic recovery.
Crude FuturesFront Month Close
708090
100110120130
Feb 11 May 11 Aug 11 Nov 11 Feb 12
$/bbl
NYMEX WTI ICE Brent
Source: Platts
World: Oil Burden & Price
0%1%2%3%4%5%6%7%8%9%
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Nom
inal
Oil
Expe
nditu
res
as %
of
Nom
inal
GD
P
152535455565758595105115
$/bbl
Oil Burden WTI (real, 2008 base)
Contributing to the next shock?
1st oil shock
2nd oil shock
3rd oil shock
Post-recession recoveries
* ICE Brent from 2009 onwards
© OECD/IEA 2011
2011- The year of supply surprises
2011 was the year of unwelcome supply surprises (Libya, outages in MENA countries, North Sea unplanned shut-ins)
But non-OPEC supply should recover in 2012
-50 -130 -180 -70 -20-140
-270-350
-190-160
-130
-360-360
-470 -590
-850
-650
-450
-250
-50
1Q11 2Q11 3Q11 4Q11 1Q12
kb/d Non-OPEC Supply 2011 and 1Q12 Selected Shut-ins & Maintenance
Planned Maintenance (N. Sea)Unplanned Outages (N.Sea)Other Unplanned Outages
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
1Q11 3Q11 1Q12 3Q12
mb/d Non-OPEC Supply - Yearly Change
NAM OECD EUR FSUChina Other Asia LAMPG & Biofuels Other Total
0.0
0.4
0.8
1.2
1.6
2.0
2010 2011 2012 2013 2014 2015 2016
mb/d Libyan Crude Oil Capacity
June 2011 December 2011
If 2010 was the year of the post-recession demand surge, then…
© OECD/IEA 2011
2011- The year of supply surprises
2011 was the year of unwelcome supply surprises (Libya, outages in MENA countries, North Sea unplanned shut-ins)
But non-OPEC supply should recover in 2012
-50 -130 -180 -70 -20-140
-270-350
-190-160
-130
-360-360
-470 -590
-850
-650
-450
-250
-50
1Q11 2Q11 3Q11 4Q11 1Q12
kb/d Non-OPEC Supply 2011 and 1Q12 Selected Shut-ins & Maintenance
Planned Maintenance (N. Sea)Unplanned Outages (N.Sea)Other Unplanned Outages
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
1Q11 3Q11 1Q12 3Q12
mb/d Non-OPEC Supply - Yearly Change
NAM OECD EUR FSUChina Other Asia LAMPG & Biofuels Other Total
0.0
0.4
0.8
1.2
1.6
2.0
2010 2011 2012 2013 2014 2015 2016
mb/d Libyan Crude Oil Capacity
June 2011 December 2011
If 2010 was the year of the post-recession demand surge, then…
© OECD/IEA 2011
2012 Uncertainties abound
Weak economic growth expected in 2012, keeping oil demand growth below 1.0 mb/d for 2012.
Iran increases the geopolitical risk premium
2012 likely to be year of two mutually counteracting forces – economic and geopolitical risks.
3.0
3.5
4.0
4.5
5.0
5.5
2010 2011 2012 2013
Y-o-Y, %Global GDP Growth Assumption Difference vs. Previous MTOGM
Current Previous
0
500
1000
1500
2000
2500
3000
0
250
500
750
1000
1250
1500
Jan-11 Apr-11 Jul-11 Oct-11
Iranian Crude Imports, 2011
Total (right) Japan/Korea China/IndiaOther non-IEA Gre/It/Sp/Tur Other Europe
kb/d
2.0
2.5
3.0
3.5
4.0
2010 2011 2012 2013 2014 2015 2016
mb/d Iran Crude Oil Capacity
June 2011 December 2011
© OECD/IEA 2011
2012 Uncertainties abound
Weak economic growth expected in 2012, keeping oil demand growth below 1.0 mb/d for 2012.
Iran increases the geopolitical risk premium
2012 likely to be year of two mutually counteracting forces – economic and geopolitical risks.
3.0
3.5
4.0
4.5
5.0
5.5
2010 2011 2012 2013
Y-o-Y, %Global GDP Growth Assumption Difference vs. Previous MTOGM
Current Previous
0
500
1000
1500
2000
2500
3000
0
250
500
750
1000
1250
1500
Jan-11 Apr-11 Jul-11 Oct-11
Iranian Crude Imports, 2011
Total (right) Japan/Korea China/IndiaOther non-IEA Gre/It/Sp/Tur Other Europe
kb/d
2.0
2.5
3.0
3.5
4.0
2010 2011 2012 2013 2014 2015 2016
mb/d Iran Crude Oil Capacity
June 2011 December 2011
© OECD/IEA 2011
Longer term, oil retains its importance
Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035
But oil retains the largest fuel share at 28%
Additional to 2035
2010
World primary energy demand
0
1 000
2 000
3 000
4 000
5 000
Oil Coal Gas Renewables Nuclear
Mto
e
Source: World Energy Outlook 2011
© OECD/IEA 2011
Longer term, oil retains its importance
Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035
But oil retains the largest fuel share at 28%
Additional to 2035
2010
World primary energy demand
0
1 000
2 000
3 000
4 000
5 000
Oil Coal Gas Renewables Nuclear
Mto
e
Source: World Energy Outlook 2011
© OECD/IEA 2011
Transport sector to drive oil demand
Change in primary oil demand by sector & region in the New Policies Scenario, 2010-2035
Transport net demand grows by 14 mb/d during 2010-2035, outweighing a decline of more than 1 mb/d in other sectors
- 4 - 2 0 2 4 6 8
OECD Americas OECD Europe
OECD Asia Oceania Latin America
E. Europe/Eurasia Africa
Other Asia Middle East
India China
mb/d
Transport
Buildings
Industry
Other
Source: World Energy Outlook 2011
© OECD/IEA 2011
Transport sector to drive oil demand
Change in primary oil demand by sector & region in the New Policies Scenario, 2010-2035
Transport net demand grows by 14 mb/d during 2010-2035, outweighing a decline of more than 1 mb/d in other sectors
- 4 - 2 0 2 4 6 8
OECD Americas OECD Europe
OECD Asia Oceania Latin America
E. Europe/Eurasia Africa
Other Asia Middle East
India China
mb/d
Transport
Buildings
Industry
Other
Source: World Energy Outlook 2011
© OECD/IEA 2011
Iraq is the largest source of oil supply growth
Major changes in world liquids supply in the New Policies Scenario, 2010-2035
The rise in MENA production is over 90% of the growth in global oil output to 2035, while companies operating elsewhere turn increasingly to more
difficult & costly sources
mb/d
Iraq
Saudi Arabia
Venezuela
UAE
Kuwait
0 1 3 4 6
OPEC
5 2
Non-OPEC
Brazil
Canada
Kazakhstan
United States
© OECD/IEA 2011
Iraq is the largest source of oil supply growth
Major changes in world liquids supply in the New Policies Scenario, 2010-2035
The rise in MENA production is over 90% of the growth in global oil output to 2035, while companies operating elsewhere turn increasingly to more
difficult & costly sources
mb/d
Iraq
Saudi Arabia
Venezuela
UAE
Kuwait
0 1 3 4 6
OPEC
5 2
Non-OPEC
Brazil
Canada
Kazakhstan
United States
© OECD/IEA 2011
Changing oil import needs shift concerns about oil security
Net imports of oil
US oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020
0
2
4
6
8
10
12
14
European Union
United States
Japan China India ASEAN
Mb/
d
2000
2010
2035
© OECD/IEA 2011
Changing oil import needs shift concerns about oil security
Net imports of oil
US oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020
0
2
4
6
8
10
12
14
European Union
United States
Japan China India ASEAN
Mb/
d
2000
2010
2035
© OECD/IEA 2011
Are we entering a Golden Age of Gas ?
Natural gas can enhance security of supply: global resources exceed 250 years of current production; while in each region, resources exceed 75 years of current consumption
© OECD/IEA 2011
Are we entering a Golden Age of Gas ?
Natural gas can enhance security of supply: global resources exceed 250 years of current production; while in each region, resources exceed 75 years of current consumption
© OECD/IEA 2011
The majority of energy subsidies still go to fossil fuels
Fossil-fuels subsidies amounted to $409 billion in 2010 – down from $550 billion in 2008 but still much larger than subsidies to renewables, which reached $66 billion in 2010
World subsidies to fossil fuels consumption & renewable energy
Fossil fuel consumption
Renewable energy production
0
100
200
300
400
500
600
2007 2008 2009 2010
Billi
on d
olla
rs (n
omin
al)
© OECD/IEA 2011
The majority of energy subsidies still go to fossil fuels
Fossil-fuels subsidies amounted to $409 billion in 2010 – down from $550 billion in 2008 but still much larger than subsidies to renewables, which reached $66 billion in 2010
World subsidies to fossil fuels consumption & renewable energy
Fossil fuel consumption
Renewable energy production
0
100
200
300
400
500
600
2007 2008 2009 2010
Billi
on d
olla
rs (n
omin
al)
© OECD/IEA 2011
Improving energy efficiency is the quickest and cheapest way to address energy security, environmental & economic challenges
The IEA has developed 25 recommendations for promoting energy efficiency which could save: 82 EJ/year by 2030 (17% of the current global energy demand)
Governments have a critical role to play in improving energy efficiency:
stimulate investment in energy efficiency
accelerate implementation through national energy efficiency strategies
monitoring, enforcement & evaluation
International collaboration is also vital
Unlocking the potential of energy efficiency
© OECD/IEA 2011
Improving energy efficiency is the quickest and cheapest way to address energy security, environmental & economic challenges
The IEA has developed 25 recommendations for promoting energy efficiency which could save: 82 EJ/year by 2030 (17% of the current global energy demand)
Governments have a critical role to play in improving energy efficiency:
stimulate investment in energy efficiency
accelerate implementation through national energy efficiency strategies
monitoring, enforcement & evaluation
International collaboration is also vital
Unlocking the potential of energy efficiency
© OECD/IEA 2011
0
5
10
15
20
25
30
35
40
2010 2020 2025 2030 2035
Delay until 2017 Delay until 2015
2015
Emissions from existing infrastructure
Energy is at the heart of the climate challenge
Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc
45 6°C trajectory
2°C trajectory
CO2 e
mis
sion
s (g
igga
tonn
es)
© OECD/IEA 2011
0
5
10
15
20
25
30
35
40
2010 2020 2025 2030 2035
Delay until 2017 Delay until 2015
2015
Emissions from existing infrastructure
Energy is at the heart of the climate challenge
Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc
45 6°C trajectory
2°C trajectory
CO2 e
mis
sion
s (g
igga
tonn
es)
© OECD/IEA 2011
Mexico in the global energy context
The IEA projects Mexico’s oil production to gradually decline in the medium term, but then to once again grow in line with the country’s resource potential
Thanks to its large reserves of unconventional gas, Mexico could be among the leaders in any potential ‘Golden age of Gas’
Energy efficiency: Mexico has already had considerable success with its end-use programme
With its vast potential in renewable energy, Mexico could become an avant-garde player in areas such as geothermal, solar and wind energy
Mexico has established itself as a proactive player in both national & international climate policy
© OECD/IEA 2011
Mexico in the global energy context
The IEA projects Mexico’s oil production to gradually decline in the medium term, but then to once again grow in line with the country’s resource potential
Thanks to its large reserves of unconventional gas, Mexico could be among the leaders in any potential ‘Golden age of Gas’
Energy efficiency: Mexico has already had considerable success with its end-use programme
With its vast potential in renewable energy, Mexico could become an avant-garde player in areas such as geothermal, solar and wind energy
Mexico has established itself as a proactive player in both national & international climate policy
© OECD/IEA 2011
Key Messages
In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher
Rising transport demand and upstream costs reconfirm the end of cheap oil
New options are opening up for natural gas, but ‘golden standards’ will be needed if it is to enter a ‘golden age’
Energy efficiency is the first step toward enhancing energy security & climate change mitigation
Despite steps in the right direction, the door to 2OC is closing
© OECD/IEA 2011
Key Messages
In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher
Rising transport demand and upstream costs reconfirm the end of cheap oil
New options are opening up for natural gas, but ‘golden standards’ will be needed if it is to enter a ‘golden age’
Energy efficiency is the first step toward enhancing energy security & climate change mitigation
Despite steps in the right direction, the door to 2OC is closing