world energy outlook 2008 (presentation to the press)

8/14/2019 World Energy Outlook 2008 (presentation to the press)

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OECD/IEA - 2008 OECD/IEA - 2008

OECD/IEA - 2008

The contextThe contextThe contextThe context

Soaring energy prices to mid-2008, followed by a collapse

what will it mean for demand?

How will the financial crisis & economic slowdown affect

energy demand & investment?

Will economic worries divert attention from strategicenergy-security & environmental challenges?

Are we setting ourselves up for a supply-crunch once the

economy is back on its feet?

Will negotiators at COP-15 in Copenhagen in 2009 have the

political support needed to succeed?


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OECD/IEA - 2008

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

1980 1990 2000 2010 2020 2030

Mtoe

Other renewables

Hydro

Nuclear

Biomass

Gas

Coal

Oil

World energy demand expands by 45% between now and 2030 an average rate of increase

of 1.6% per year with coal accounting for more than a third of the overall rise

World primary energy demand in tWorld primary energy demand in thehe

Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!

World primary energy demand in tWorld primary energy demand in thehe

Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!

OECD/IEA - 2008

The continuing importance of coal inThe continuing importance of coal in

world primary energy demandworld primary energy demand

The continuing importance of coal inThe continuing importance of coal in

world primary energy demandworld primary energy demand

0%

20%

40%

60%

80%

100%

Non-OECD OECD

All other fuels

Coal

Shares of incremental energy demand

Reference Scenario, 2006 - 2030Increase in primary demand, 2000 - 2007

Demand for coal has been growing faster than any other energy source & is projected to

account for more than a third of incremental global energy demand to 2030

Mtoe

0

100

200

300

400

500

600

700

800

900

1 000

Coal Oil Gas Renewables Nuclear

4.8%

1.6%2.6%

2.2%

0.8%

% = average annual rate of growth


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OECD/IEA - 2008

Share ofShare of renewablesrenewables in electricityin electricity

generation in the Reference Scenariogeneration in the Reference Scenario

Share ofShare of renewablesrenewables in electricityin electricity

generation in the Reference Scenariogeneration in the Reference Scenario

0% 5% 10% 15% 20% 25% 30%

2030

2015

2006

2030

2015

2006

2030

2015

2006

Non-O

ECD

OECD

World

Hydro

Other (wind, solar, etc)

Soon after 2010, renewables become the 2nd-largest source of electricity behind coal, thanks

to government support, prospects for higher fossil-fuel prices & declining investment costs

OECD/IEA - 2008

Change in oil demand by regionChange in oil demand by region

in the Reference Scenario, 2007in the Reference Scenario, 2007--20302030

Change in oil demand by regionChange in oil demand by region

in the Reference Scenario, 2007in the Reference Scenario, 2007--20302030

-2 0 2 4 6 8 10

China

Middle East

India

Other Asia

Latin AmericaE. Europe/Eurasia

Africa

OECD North America

OECD Europe

OECD Pacific

mb/d

All of the growth in oil demand comes from non-OECD, with China contributing 43%, the

Middle East & India each about 20% & other emerging Asian economies most of the rest


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OECD/IEA - 2008

Energy subsidies in nonEnergy subsidies in non--OECDOECD

countries, 2007countries, 2007

Energy subsidies in nonEnergy subsidies in non--OECDOECD

countries, 2007countries, 2007

0 10 20 30 40 50 60

BrazilVietnam

Chinese Taipei

NigeriaThailandMalaysiaPakistan

KazakhstanSouth Africa

ArgentinaUkraine

EgyptIndonesiaVenezuela

IndiaSaudi Arabia

ChinaRussia

Iran

Billion dollars

Oil

Gas

Coal

Electricity

Energy subsidies in the 20 largest non-OECD countries hit $310 billion in 2007 creating, in

many cases, an unsustainable economic burden & exacerbating environmental effects

OECD/IEA - 2008

Incremental world fossilIncremental world fossil--fuelfuel

production in the Reference Scenarioproduction in the Reference Scenario

Incremental world fossilIncremental world fossil--fuelfuel

production in the Reference Scenarioproduction in the Reference Scenario

Almost all incremental oil & gas comes from non-OECD regions, resulting in major structural

changes to the industry with implications for global energy markets

0

5

10

15

20

25

1980-2007 2007-2030 1980-2006 2006-2030 1980-2006 2006-2030

mb/d Non-OECD

OECD

- 200

200

400

600

800

1 000

1 200

1 400

1 600

Bcm

500

1 000

1 500

2 000

2 500

3 000

Mtce

Oil CoalGas


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OECD/IEA - 2008

Cumulative energyCumulative energy--supply investmentsupply investment

in the Reference Scenarioin the Reference Scenario, 2007, 2007--20302030

Cumulative energyCumulative energy--supply investmentsupply investment

in the Reference Scenarioin the Reference Scenario, 2007, 2007--20302030

Investment of $26 trillion, or over $1 trillion/year, is needed, but the credit squeeze could

delay spending, potentially setting up a supply-crunch once the economy recovers

Power

generation

50%

Transmission

& distribution

50%Mining

91%

Shipping &

ports

9%

Exploration and

development

80%

Refining

16%

Shipping

4%

Exploration &

development

61%LNG chain

8%

Transmission

& distribution

31%

Power52%

$13.6 trillion

Oil24%

$6.3 trillion

Gas21%

$5.5 trillion

Coal3%

$0.7 trillion

Biofuels


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OECD/IEA - 2008

World oil production by OPEC/nonWorld oil production by OPEC/non--OPECOPEC

in the Reference Scenarioin the Reference Scenario

World oil production by OPEC/nonWorld oil production by OPEC/non--OPECOPEC


Production rises to 104 mb/d in 2030, with Middle East OPEC taking the lions share of oil

market growth as conventional non-OPEC production declines

0

20

40

60

80

100

120

2000 2007 2015 2030

OPEC - other

OPEC - Middle East

Non-OPEC - non-

conventional

Non-OPEC -

conventional

OPEC share

mb/d

38%

40%

42%

44%

46%

48%

50%

52%

OECD/IEA - 2008

0

20

40

60

80

100

120

1990 2000 2010 2020 2030

mb/d Natural gas liquids

Non-conventional oil

Crude oil - yet to bedeveloped (inc. EOR)or found

Crude oil - currently

producing fields

World oil production by sourceWorld oil production by source


World oil production by sourceWorld oil production by source


64 mb/d of gross capacity needs to be installed between 2007 & 2030 six times the current

capacity of Saudi Arabia to meet demand growth & offset decline


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OECD/IEA - 2008

Average observed oilfieldAverage observed oilfield

decline ratesdecline rates

Average observed oilfieldAverage observed oilfield

decline ratesdecline rates

The production-weighted average decline rate worldwide is projected to rise from 6.7% in

2007 to 8.6% in 2030 as productions shifts to smaller oilfields, which tend to decline faster

0%

2%

4%

6%

8%

10%

12%

14%

16%

Pre-1970s 1970s 1980s 1990s 2000 - 2007

OPEC

Non-OPEC

Year production started

OECD/IEA - 2008

A sea change: world oil & gas production byA sea change: world oil & gas production by

company type in thecompany type in the Reference ScenarioReference Scenario

A sea change: world oil & gas production byA sea change: world oil & gas production by

company type in thecompany type in the Reference ScenarioReference Scenario

0

20

40

60

80

100

120

2007 2015 2030

mb/d

0

750

1 500

2 250

3 000

3 750

4 500

2006 2015 2030

Bcm

NOCs Private companies

Oil Gas

Almost 80% of the projected increase in output of both oil & gas comes from

national companies on the assumption that investment is forthcoming


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Post-2012

climate-policy scenarios

Post-2012

climate-policy scenarios

OECD/IEA - 2008

EnergyEnergy--related COrelated CO22 emissionsemissions


EnergyEnergy--related COrelated CO22 emissionsemissions


97% of the projected increase in emissions between now & 2030 comes from non-OECD

countries three-quarters from China, India & the Middle East alone

0

5

10

15

20

25

30

35

40

45

1980 1990 2000 2010 2020 2030

Gigatonnes International

marine bunkersand aviation

Non-OECD - gas

Non-OECD - oil

Non-OECD - coal

OECD - gas

OECD - oil

OECD - coal


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OECD/IEA - 2008

National

policies and

measures

The 550 Policy ScenarioThe 450 Policy Scenario

Cap and trade

from 2020

onwards

Copenhagen: aCopenhagen: a plausibleplausible postpost--2012 global2012 global

climateclimate--change policy regimechange policy regime

Copenhagen: aCopenhagen: a plausibleplausible postpost--2012 global2012 global

climateclimate--change policy regimechange policy regime

A combination of policy mechanisms reflecting nations varied circumstances & current

negotiating positions is a realistic outcome at the Copenhagen COP at end-2009

Cap and tradePower

generation

Buildings

Transport

Industry

International sectoral approaches

National policies and measures

International sectoral approaches

OECD+

Other Major

Economies

Other

Countries

National

policies and

measures

OECD/IEA - 2008

Reductions in energyReductions in energy--related COrelated CO22emissions in the climateemissions in the climate--policy scenariospolicy scenarios

Reductions in energyReductions in energy--related COrelated CO22emissions in the climateemissions in the climate--policy scenariospolicy scenarios

While technological progress is needed to achieve some emissions reductions, efficiency

gains and deployment of existing low-carbon energy accounts for most of the savings

20

25

30

35

40

45

2005 2010 2015 2020 2025 2030

Gigatonnes

Reference Scenario 550 Policy Scenario 450 Policy Scenario

CCS

Renewables & biofuels

Nuclear

Energy efficiency

550Policy

Scenario

450Policy

Scenario

54%

23%

14%

9%


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OECD/IEA - 2008

Total power generation capacity todayTotal power generation capacity today

and in 2030 by scenarioand in 2030 by scenario

Total power generation capacity todayTotal power generation capacity today

and in 2030 by scenarioand in 2030 by scenario

In the 450 Policy Scenario, the power sector undergoes a dramatic change with CCS,

renewables and nuclear each playing a crucial role

0 1 000 2 000 3 000

Other renewables

Wind

Hydro

Nuclear

Coal and gas with CCS

Gas

Coal

GW

1.2 x today

1.5 x today

13.5 x today

2.1 x today

1.8 x today

12.5 x today

15% of todays coal & gas capacity

Today Reference Scenario 2030 450 Policy Scenario 2030

OECD/IEA - 2008

World energyWorld energy--related COrelated CO22 emissionsemissions

in 2030 by scenarioin 2030 by scenario

World energyWorld energy--related COrelated CO22 emissionsemissions

in 2030 by scenarioin 2030 by scenario

OECD countries alone cannot put the world onto a 450-ppm trajectory,

even if they were to reduce their emissions to zero

Non-OECD

World

World

OECD

0

5

10

15

20

25

30

35

40

Reference Scenario 550 Policy Scenario 450 Policy Scenario

Gigatonnes


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OECD/IEA - 2008

Total oil production in 2030 byTotal oil production in 2030 by

scenarioscenario

Total oil production in 2030 byTotal oil production in 2030 by

scenarioscenario

Curbing CO2 emissions would improve energy security by cutting demand for fossil fuels, but

even in the 450 Policy Scenario, OPEC production increases by 12 mb/d from now to 2030

0

20

40

60

80

100

120

2007 Reference Scenario2030

550 Policy Scenario2030

450 Policy Scenario2030

Non-OPEC

OPEC

9 mb/d16 mb/d

mb/d

OECD/IEA - 2008

Key results of the postKey results of the post--20122012

climateclimate--policy analysispolicy analysis

Key results of the postKey results of the post--20122012

climateclimate--policy analysispolicy analysis

550 Policy Scenario

Corresponds to a c.3C global

temperature rise

Energy demand continues to

expand, but fuel mix is markedly

different

CO2 price in OECD countries

reaches $90/tonne in 2030

Additional investment equal to

0.25% of GDP

450 Policy Scenario

Corresponds to a c.2C global

temperature rise

Energy demand grows, but half

as fast as in Reference Scenario

Rapid deployment of low-carbon

technologies particularly CCS

Big fall in non-OECD emissions

CO2 price in 2030 reaches

$180/tonne

Additional investment equal to

0.6% of GDP


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OECD/IEA - 2008

Summary & conclusionsSummary & conclusionsSummary & conclusionsSummary & conclusions

Current energy trends are patently unsustainable socially,

environmentally, economically

Oil will remain the leading energy source but...

> The era of cheap oil is over, although price volatility will remain

> Oilfield decline is the key determinant of investment needs

> The oil market is undergoing major and lasting structural change, withnational companies in the ascendancy

To avoid "abrupt and irreversible" climate change we need amajor decarbonisation of the worlds energy system

> Copenhagen must deliver a credible post-2012 climate regime

> Limiting temperature rise to 2C will require significant emissionreductions in all regions & technological breakthroughs

> Mitigating climate change will substantially improve energy security

The present economic worries do not excuse back-tracking or delaysin taking action to address energy challenges

world energy outlook 2008 (presentation to the press)

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