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OECD/IEA 2012
World Energy Outlook 2012 Presentation to the press
London, 12 November 2012
OECD/IEA 2012
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
OECD/IEA 2012
Emerging economies steer energy markets
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-OECD Rest of non-OECD 6 030 Mtoe 12 380 Mtoe 16 730 Mtoe
OECD/IEA 2012
A United States oil & gas transformation
US oil and 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
OECD/IEA 2012
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
1
2
3
4
5
6
7
8
9
2012 2020 2035
mb/d North
Centre
South
Iraq oil exports
1
2
3
4
5
6
7
8
9
2012 2020 2035
mb/d Other
Asia
OECD/IEA 2012
Middle East oil to Asia: a new silk road
Middle East oil export by destination
By 2035, almost 90% of Middle Eastern oil exports go to Asia; North Americas emergence as a net exporter accelerates the eastward shift in trade
7
United States Japan & Korea Europe China India
mb/d 2000
2011
2035
1
2
3
4
5
6
OECD/IEA 2012
Natural gas: towards a 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
OECD/IEA 2012
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
OECD/IEA 2012
3 000 4 000 5 000 6 000
TWh
2 000
A power shift to emerging economies
The need for electricity in emerging economies drives a 70% increase in worldwide 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
OECD/IEA 2012
The multiple benefits of renewables come at a cost
Renewable subsidies were $88 billion in 2011; over half the $4.8 trillion required to 2035 has been committed to existing projects or is needed to meet 2020 targets
Global renewable energy subsidies
$50
$100
$150
$200
$250
2011 2015 2020 2025 2030 2035
Billion
2012-2035
$960 billion
$2 600 billion
$1 200 billion
Existing capacity
Electricity:
2011-2035
Biofuels:
OECD/IEA 2012
Wide variations in the price of power
Electricity prices are set to increase with the highest prices persisting in the European Union & Japan, well above those in China & the United States
Average household electricity prices, 2035
5
10
15
20
25
China United States European Union Japan
cents/kWh
2011 Non-OECD average
2011 OECD average
OECD/IEA 2012
2010
Energy is becoming thirstier in the face of growing water constraints
The energy sectors water needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects
20%
40%
60%
80%
100%
2010
Coal
Nuclear
Other
Energy
Biofuels Fossil fuels
Power
Global water use Water for energy
OECD/IEA 2012
Energy efficiency: a huge opportunity going unrealised
20%
40%
60%
80%
100%
Industry Transport Power generation
Buildings
Unrealised energy efficiency potential
Realised energy efficiency potential
Two-thirds of the economic potential to improve energy efficiency remains untapped in the period to 2035
Energy efficiency potential used by sector in the New Policies Scenario
OECD/IEA 2012
The Efficient World Scenario: a blueprint for an efficient world
Economically viable efficiency measures can halve energy demand growth to 2035;
Total primary energy demand
12 000
13 000
14 000
15 000
16 000
17 000
18 000
2010 2015 2020 2025 2030 2035
Mtoe
New Policies Scenario
Efficient World Scenario
Reduction in 2035
Coal 1 350 Mtce
Oil 12.7 mb/d
Gas 680 bcm
Others 250 Mtoe
oil demand savings equal the current production of Russia & Norway
OECD/IEA 2012
Energy efficiency brings economic gains
In addition to cutting energy expenditures by an average of 20%, improved efficiency brings wider economic gains, particularly for India, China, the United States & Europe
Energy expenditure in 2035 compared with 2010
Trillion
Efficient World Scenario
New Policies Scenario Additional in the New Policies Scenario
-$0.3
$0
$0.3
$0.6
$0.9
$1.2
$1.5
China India European Union
United States
Japan
OECD/IEA 2012
Room to manoeuvre
The Efficient World Scenario delays carbon lock-in
Energy efficiency can delay lock-in of CO2 emissions permitted under a 2 C trajectory which is set to happen in 2017 until 2022, buying five extra years
5
10
15
20
25
30
2011 2015 2020 2025 2030 2035
Gt
2 C trajectory
Lock-in of existing infrastructure
2017
Lock-in of infrastructure in New Policies Scenario in 2017
2022 35
Lock-in of infrastructure in Efficient World Scenario in 2022
OECD/IEA 2012
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 set to play a pivotal role in global oil markets
As climate change slips off policy radar, the lock-in point moves closer & the costs of inaction rise
The gains promised by energy efficiency are within reach & are essential to underpin a more secure & sustainable energy system