World Energy Outlook 2009
© OECD/IEA - 2009
Presentation to the PressLondon, 10 November 2009
The contextThe context
The worst economic slump since the 2nd World War & signs of recovery – but how fast?
An oil price collapse & then a rebound – rising marginal costs point to higher prices in the longer term but are current levels sustainable?
© OECD/IEA - 2009
higher prices in the longer term, but are current levels sustainable?
A slump in energy investment due to the financial & economic crisis –will it bounce back quickly enough to avert a supply squeeze later?
Difficult negotiations on a post-2012 climate deal leading up to Copenhagen – what is needed to avert catastrophic climate change?
World primary energy demand World primary energy demand in the Reference Scenario in the Reference Scenario
8 000
10 000
12 000
Mto
e China and India
Rest of non-OECD
OECD
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Non-OECD countries account for 93% of the increase in global demand between 2007 & 2030, driven largely by China & India
0
2 000
4 000
6 000
1980 1990 2000 2010 2020 2030
Change in primary energy demandChange in primary energy demandin the Reference Scenario, 2007in the Reference Scenario, 2007--20302030
N l
Gas
Oil
Coal OECD
Non-OECD
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Fossil fuels account for 77% of the increase in world primary energy demand in 2007-2030, with oil demand rising from 85 mb/d in 2008 to 88 mb/d in 2015 & 105 mb/d in 2030
- 500 0 500 1 000 1 500 2 000
Other renewables
Biomass
Hydro
Nuclear
Mtoe
Worldwide upstream oil & gas Worldwide upstream oil & gas capital expenditurescapital expenditures
300
400
500
Billi
on d
olla
rs
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Global upstream spending (excluding acquisitions) is budgeted to fall by over $90 billion, or 19%, in 2009 – the first fall in a decade
0
100
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
* Budgeted spending
Oil productionOil productionin the Reference Scenarioin the Reference Scenario
NGLs
Unconventional oil
Crude oil – fields yet to be developedor foundCrude oil – currently producing fields
80
100
120m
b/d
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Sustained investment is needed mainly to combat the decline in output at existing fields, which will drop by almost two-thirds by 2030
0
20
40
60
2000 2008 2030
Impact of decline on world natural gas productionImpact of decline on world natural gas productionin the Reference Scenarioin the Reference Scenario
3
4
5
tcm Fields yet to be developed or found
Currently producing fields
60%
80%
100%
Share from fields not yet producing
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Additional capacity of around 2 700 bcm, or 4 times current Russian capacity, is needed by 2030 – half to offset decline at existing fields & half to meet the increase in demand
0
1
2
3
2007 2015 2020 2025 20300%
20%
40%
60%(right axis)
US natural gas supply US natural gas supply in the Reference Scenarioin the Reference Scenario
400
500
600
700
bcm Net imports
Conventional
Unconventional
40%
50%
60%
70%
Share of unconventionall l
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Thanks mainly to shale gas, US gas output grows gradually through to 2030,outstripping demand & squeezing imports
0
100
200
300
400
1990 1995 2000 2005 2008 2015 2020 2025 20300%
10%
20%
30%
40% in total supply
Natural gas transportation capacity Natural gas transportation capacity
500
600
700
800
bcm Unutilised LNG liquefaction
& pipeline capacity
LNG trade
73%
88%
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A glut of gas is developing – reaching 200 bcm by 2015 – due to weaker than expected demand & plentiful US unconventional supply, with far-reaching implications for gas pricing
0
100
200
300
400
500
2007 2015
Pipeline trade
% Capacity utilisation rate
Indicative costs for potential new sources of gas Indicative costs for potential new sources of gas delivered to Europe, 2020 ($/delivered to Europe, 2020 ($/MBtuMBtu))
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Although indigenous resources are limited & output is declining, Europe isgeographically well placed to secure gas supplies from a variety of external sources
Average annual expenditure on net imports Average annual expenditure on net imports of oil & gas in the Reference Scenarioof oil & gas in the Reference Scenario
400
500
600
on d
olla
rs (
2008
)
1971-2008
2008-2030
% Share of GDP
2%
2%
3%
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The Reference Scenario implies persistently high spending on oil & gas imports, with China overtaking the United States by around 2025 to become the world's biggest spender
0
100
200
300
EuropeanUnion
UnitedStates
China Japan India ASEAN
Billi
o
1%1%
1%2%
3%
3%
3% 6%
3%
0.4%
Number of people without access to electricityNumber of people without access to electricityin the Reference Scenario (millions)in the Reference Scenario (millions)
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$35 billion per year more investment than in the Reference Scenario would be needed to 2030 – equivalent to just 5% of global power-sector investment – to ensure universal access
World population withoutaccess to electricity
2008: 1.5 billion people2030: 1.3 billion people
The policy mechanismsThe policy mechanismsin the 450 Scenarioin the 450 Scenario
A combination of policy mechanisms, which best reflects nations’ varied circumstances & negotiating positionsWe differentiate on the basis of three country groupings> OECD+: OECD & other non-OECD EU countries> Other Major Economies (OME): Brazil, China, Middle East, Russia & South Africa
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j , , , f> Other Countries (OC): all other countries, including India & ASEAN
A graduated approach> Up to 2020, only OECD+ have national emissions caps> After 2020, Other Major Economies are also assumed to adopt emissions caps> Through to 2030, Other Countries continue to focus on national measures
Emissions peaking by 2020 will require> A CO2 price of $50 per tonne for power generation & industry in OECD+> Investment needs in non-OECD countries of $200 billion in 2020, supported by
OECD+ through carbon markets & co-financing
Abatement by policy type in the 450 Scenario Abatement by policy type in the 450 Scenario relative to the Reference Scenario, 2020relative to the Reference Scenario, 2020
EmissionsReference ScenarioAbatement:
OECD+
Other Major Economies
Other Countries
Domestic policies and measures
Sectoral agreements
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After realising the abatement potential of policies & measures and sectoral approaches, cap-and-trade in OECD+ yields a further 1.8 Gt
30 31 32 33 34 35Gt
450 Scenario
Other CountriesOECD+ cap-and-trade for power and industry(including international credits)
World primary energy demand by fuel World primary energy demand by fuel in the 450in the 450 Scenario Scenario
8 000
10 000
12 000
Mto
e
24%
30%
36% Fossil fuels
Zero-carbon fuelsShare of zero- carbon fuels (right axis)
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In the 450 Scenario, demand for fossil fuels peaks by 2020, and by 2030 zero-carbon fuels make up a third of the world's primary sources of energy demand
0
2 000
4 000
6 000
1990 2000 2010 2020 20300%
6%
12%
18%
World oil productionWorld oil productionby scenarioby scenario
80
100
120m
b/d Non-OPEC
OPEC
16 mb/d
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Curbing CO2 emissions would also improve energy security by cutting oil demand, but even in the 450 Scenario, OPEC production increases by 11 mb/d between now and 2030
36mb/d
0
20
40
60
2008 Reference Scenario2030
450 Scenario2030
11 mb/d
Cumulative OPEC oil export revenuesCumulative OPEC oil export revenuesby scenarioby scenario
8
1216
2024
28
lion
dolla
rs (
2008
)
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Though slightly lower than in the Reference Scenario, OPEC revenues in the 450 Scenario are over four times as high as in the last 20 years
0
48
1985-2007
Reference Scenario 450 Scenario
2008-2030
Tril
World primary natural gas demand World primary natural gas demand by scenarioby scenario
3 000
3 750
4 500
bcm Reference Scenario
450 Scenario+41% (1 264 bcm)
+17% (511 bcm)
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Gas demand continues to grow in both scenarios, peaking by around 2025 in the 450 Scenario & highlighting the potential role of gas as a transition fuel to a clean energy future
0
750
1 500
2 250
2007 2015 2020 2025 2030
World abatement of energyWorld abatement of energy--related COrelated CO22 emissionsemissionsin the 450 Scenarioin the 450 Scenario
36
38
40
42Gt
Reference Scenario
OECD+
World abatement by technology
20203.8 Gt
203013.8 Gt
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An additional $10.5 trillion of investment is needed in total in the 450 Scenario, with measures to boost energy efficiency accounting for most of the abatement through to 2030
26
28
30
32
34
2007 2010 2015 2020 2025 2030
450 Scenario
OME
OC
3.8 Gt
13.8 Gt
CCSNuclear
Renewables& biofuels
Efficiency 65%
19%
13%3%
57%
23%
10%10%
Abatement in the 450 Scenario by key emitters, 2020Abatement in the 450 Scenario by key emitters, 2020
0.8
1.0
1.2
1.4Gt
International carbon markets
Cap & trade in power& industry sectorsInternation sectoral standardsin transport & industryNational policies
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China, the United States, the European Union, India, Russia & Japan account for almost three-quarters of the 3.8 Gt reduction in the 450 Scenario
0
0.2
0.4
0.6
China UnitedStates
EuropeanUnion
India Russia Japan
National policies
Incremental world electricity productionIncremental world electricity productionin the Reference and 450 Scenarios, 2007in the Reference and 450 Scenarios, 2007--20302030
4 000
5 000
6 000
7 000
TWh
Reference Scenario
450 Scenario
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Renewables, nuclear and plants fitted with CCS account for around 60% of electricity generation globally in 2030 in the 450 Scenario, up from less than one-third today
-1 000
0
1 000
2 000
3 000
Coal Gas Oil Nuclear Hydro Wind Biomass Solar Otherrenewables
World passenger vehicle sales & average new vehicle World passenger vehicle sales & average new vehicle COCO22 intensity in the 450intensity in the 450 ScenarioScenario
6
80%
100% Electric vehiclesPlug-in hybridsHybrid vehiclesICE vehicles
hare
of
sale
s
205
200
250
per
kilo
met
re
CO i i
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Improvements to the internal combustion engine & the uptake of next-generation vehicles & biofuels lead to a 56% reduction in new-car emission intensity by 2030
0%
20%
40%
60%
2007 2020 2030
S
125
90
0
50
100
150
Gra
mm
es CO2 intensity
of new vehicles(right axis)
Summary & conclusionsSummary & conclusions
The financial crisis has halted the rise in global fossil-energy use, but its long-term upward path will resume soon on current policiesTackling climate change & enhancing energy security require a massive decarbonisation of the energy system> We are now on course for a 6°C temperature rise & rising energy costs
i i i i ill i bi i i d i i ll
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> Limiting temperature rise to 2°C will require big emission reductions in allregions
A 450 path towards ‘Green Growth’ would bring substantial benefits> Avoiding the worst effects & costs of climate change> Energy-security benefits, lower oil & gas imports & reduced energy bills> Much less air pollution & huge health benefits
Natural gas can play a key role as a bridge to a cleaner energy futureThe challenge is enormous – but it can and must be met> Improved energy efficiency & technology deployment are critical > Each year of delay adds $500 bn to mitigation costs between today & 2030