© OECD/IEA 2013

Mapping the new global energy landscape

Paweł OLEJARNIK Senior Energy Analyst

Paris, 27 February 2013

© OECD/IEA 2013

The context

Foundations of global energy system shifting

Resurgence in oil & gas production in some countries

Retreat from nuclear in some others

Signs of increasing policy focus on energy efficiency

All-time high oil prices acting as brake on global economy

Divergence in natural gas prices affecting Europe (with prices 5-times US levels) and Asia (8-times)

Symptoms of an unsustainable energy system persist

Fossil fuel subsidies up almost 30% to $523 billion in 2011, led by MENA

CO2 emissions at record high, while renewables industry under strain

Despite new international efforts, 1.3 billion people still lack electricity

Water increasingly crucial for assessing the viability of energy projects

© OECD/IEA 2013

The rise & rise of light tight oil?

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0.5

1.0

1.5

2.0

2.5

3.0

3.5

United States light tight oil

2012 Iraq total oil

mb/d

2007-2012

2012-2017

US light tight oil resources may end up being larger than currently expected; Canada, China, Argentina, Mexico & even Russia may join the future LTO club

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Different trends in oil & gas import dependency

While dependence on imported oil & gas rises in many countries,

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

China India

European Union

Japan

2010

2035

20% Gas Exports

the United States swims against the tide

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Iraq oil poised for a major expansion

Iraq oil production

Iraq accounts for 45% of the growth in global production to 2035; by the 2030s it becomes the second-largest global oil exporter, overtaking Russia

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2012 2020 2035

mb/d North

Centre

South

Iraq oil exports

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2

3

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5

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9

2012 2020 2035

mb/d Other

Asia

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3 000 4 000 5 000 6 000

TWh

2 000

A power shift to emerging economies

Need for electricity in emerging economies drives a 70% increase in global demand, with renewables accounting for half of new global capacity

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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Coal 63%

Oil 22%

Gas 15%

Potential emissions from fossil fuels reserves

2 860 Gt CO2

Staying within a 2°C world

CO2 equivalent of today’s fossil fuel reserves

In a 2°C world, more than two-thirds of current fossil fuel reserves cannot be consumed before 2050 unless CCS is widely deployed

2°C carbon budget

© OECD/IEA 2013

Foundations of energy system shifting

Policy makers face critical choices in reconciling energy, environmental & economic objectives

Changing outlook for energy production & use may redefine global economic & geopolitical balances

Iraq & Brazil together account for 75% of the growth in global oil production to 2035

Schemes to support low carbon technologies need to be carefully designed, while fossil fuel subsidies need to be removed

The gains promised by energy efficiency are within reach & are essential to underpin a more secure & sustainable energy system