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An Atlantic Basin Energy System?
Paul IsbellCalouste Gulbenkian Fellow
Center for Transatlantic RelationsJohns Hopkins University
School for Advanced International Studies (SAIS)
September 12, 2012
Formation of an Atlantic Basin Energy System (ABES)
• Why Energy and the Atlantic?
• Pre-conditions for the formation of ABES
• Remaining Barriers
• Policy Implications
The Importance of Atlantic Energy
• From the end of the Cold War to the rise of China and the BRICS: the “forgotten” Atlantic
• Shifting pattern of US oil import dependence– Traditional: Middle East, Persian Gulf, Saudi Arabia– New rivals to Saudi Arabia and the Arab World (7 of top 10
national suppliers from the Atlantic Basin)– Proliferation of suppliers large enough to negatively impact
security of US oil supply• Increasing specific mass of the Atlantic Basin in the
broad global energy system – geopolitical implications: the return of a new Atlantic?
Geography of Top 10 Oil Sources
• Atlantic Basin– Canada (1)– Mexico (2)– Nigeria (4)– Venezuela (5)– Colombia (8)– Angola (9)– Brazil (10)
• Broader Middle East• Saudi Arabia (3) • Iraq (6)• Algeria (7)
Atlantic sources will grow in the future, while others could slide. Ecuador is 11th, Congo (Bzza) 14th, Cameroon 15th
Pre-conditions for an ABES
• Dynamic basin energy demand• Dynamic basin energy supply• Sufficient basin autonomy• Intra-basin complementarity
Dynamic Atlantic Basin Demand• Approximately 40% of world demand• Northern Atlantic demand flat to 2050• Southern Atlantic demand in line with the rest
of the world• Southern Atlantic’s share of global energy
demand set to double to around 20% by 2050.• Atlantic demand will be outstripped by the
rest of the world, but Atlantic supply is set to boom
Atlantic vs World Demand to 2050
2010 2020 2030 2040 20500.000
200.000
400.000
600.000
800.000
1000.000
1200.000
1400.000
Rest of the WorldSouthern AtlanticNorthern AtlanticEJ
/yr
Source: Global Energy Assessment, IIASA
Northern vs Southern Atlantic Demand to 2050
2010 2020 2030 2040 20500.000
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
LACAfricaEuropeNorth America
EJ/y
r
Source: Global Energy Assessment, IIASA
Dynamic Atlantic Basin Supply
• Boom in Atlantic energy supply– Oil (over 1/3 of global production, over 40% of global
reserves) • New players: Brazil, Guyana Basin, Atlantic Africa• Traditional players with enlarged reserves: Canada, Venezuela
– Gas (over 1/3 of global gas and LNG production; 12% of conventional reserves, but over 60% of shale reserves – four of the five largest shale reserves in the Atlantic Basin)
– Renewables (over four-fifths of global installed capacity and biofuels production)
Sufficient Basin Autonomy
• Over a quarter of world oil trade• Only 15% extra-basin oil dependence• 30% of global LNG trade• Only 6% extra-basin gas dependence
(concentrated in EU dependence on Russia)• Over 80% of global biofuels trade
Center for Transatlantic RelationsSource: BP Statistical Review of World Energy 2011 . Elaborated by the Center for Transatlantic Relations, Johns Hopkins SAIS
Intra-Atlantic Basin Oil Trade
Center for Transatlantic Relations
Intra-Basin Complementarity
• Traditional complementarity between North and South (northern investment in southern supply for importation)
• Emerging complementarity in the southern Atlantic• Southern Cone shale gas with South African gas-to-
liquids• Brazilian biofuels collaborations with West Africa• Others: LNG trade, petroleum products markets,
northern investment in southern renewables
Barriers and Other External Factors
• Financial instability in the Northern Atlantic• Price environment (fossil fuel subsidies, global
oil prices, the price of carbon) providing a partial, but insufficient driver of low-carbon energy
• Insufficient policy and regulatory environments around the basin (energy nationalism)
• Lack of diplomatic structure in the Basin
Pre-conditions and Barriers
Pre-conditions Met/unmet Strong/medium/weakfulfillment or remaining barrier
Dynamic energy demand Met Medium
Dynamic energy supply Met Strong
Sufficient energy autonomy Met Medium-Strong
Intra-basin complementarity Met Strong
Financial and economic stability in the Northern Atlantic
Unmet Weak-Medium
Appropriate pricing environment Unmet Medium-Strong
Stable and rigorous policy and regulatory environments
Unmet Medium-Strong
Diplomatic/governance structure Unmet Medium-Strong
Pre-conditions for the Emergence of an Atlantic Basin Energy System
Source: own elaboration.
Policy Implications• Energy Security
– Middle East and Central Asia– China and East Asia
• Broader Atlantic Integration: Sustainable Development and Climate Change
• Atlantic Basin Consciousness and Atlantic Institutions
• Reconfiguration of the Atlantic – renewal of the West
Supporting Graphs
Atlantic Basin Petroleum Production in the World, 1980-2009
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
Rest of World
Atlantic Basin Broad
Atlantic Basin Narrow
Thou
sand
bar
rels
per d
ay
Source: EIA and own elaboration.
Atlantic Basin Petroleum Consumption in the World, 1980-2009
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Rest of World
Atlantic Basin Broad
Atlantic Basin Narrowest
Thou
sand
bar
rels
per d
ay
Source: EIA and own elaboration.
Atlantic Basin Petroleum Reserves (without Venezuela’s super-heavy oil) 1980-2010
Petroleum Reserves in the Atlantic Basin
0
200
400
600
800
1000
1200
1400
1600
Billion Barrels
Rest of World
Atlantic Basin Broad
Atlantic Basin Narrow
Source: EIA and own elaboration.
Atlantic Basin Natural Gas Reserves (pre-shale revolution) in the World (trillion cubic feet)
19801981
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20100
1000
2000
3000
4000
5000
6000
7000
World
Atlantic Basin Broad
Atlantic Basin Narrow
Trill
ion
cubi
c fee
t
Source: EIA and own elaboration.
Atlantic Basin Gas Consumption in the World (trillion cubic feet annually) 1980-2009
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
20000
40000
60000
80000
100000
120000
Rest of World
Atlantic Basin Broad
Atlantic Basin Narrowest
Billi
on cu
bic f
eet
Source: EIA and own elaboration.
Assessed Global Shale Gas Resources, 2011
Source: EIA
Global Shale Gas Resources, “technically recoverable” reserves by country (tcf), 2011
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