Global Energy Trends: Focus on oil and gas
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Maria van der Hoeven, Executive Director of the International Energy Agency presentation at The Future of Energy on Global Energy Trends: Focus on oil and gas

Maria van der Hoeven, Executive Director of the International Energy Agency presentation at The Future of Energy on Global Energy Trends: Focus on oil and gas

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Global Energy Trends: Focus on oil and gas Presentation Transcript

  • 1. Global Energy Trends: Focus on oil & gas Maria van der Hoeven Executive Director International Energy Agency International Seminar: “The Future of Energy” Mexico City, 29 February 2012 © OECD/IEA 2011
  • 2. Oil prices remain high World: Oil Burden & Price $/bbl Crude Futures$/bbl 9% 115 Nominal Oil Expenditures as % Front Month Close Contributing to 2nd oil 8% the next shock? 105130 shock 95 of Nominal GDP 7%120 85 6%110 1st oil Post- 75 5% shock recession 3rd oil 65100 4% recoveries shock 55 90 3% 45 Source: Platts 2% 80 35 1% 25 70 0% 15 Feb 11 May 11 Aug 11 Nov 11 Feb 12 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 NYMEX WTI ICE Brent Oil Burden WTI (real, 2008 base) * ICE Brent from 2009 onwards Crude prices remain high in historical terms. Oil burden in 2011 marginally exceeds 2008, in both years standing above 5% of world GDP. Longer term trend to higher prices, but short-term risk of derailing economic recovery. © OECD/IEA 2011
  • 3. Oil prices remain high World: Oil Burden & Price $/bbl Crude Futures$/bbl 9% 115 Nominal Oil Expenditures as % Front Month Close Contributing to 2nd oil 8% the next shock? 105130 shock 95 of Nominal GDP 7%120 85 6%110 1st oil Post- 75 5% shock recession 3rd oil 65100 4% recoveries shock 55 90 3% 45 Source: Platts 2% 80 35 1% 25 70 0% 15 Feb 11 May 11 Aug 11 Nov 11 Feb 12 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 NYMEX WTI ICE Brent Oil Burden WTI (real, 2008 base) * ICE Brent from 2009 onwards Crude prices remain high in historical terms. Oil burden in 2011 marginally exceeds 2008, in both years standing above 5% of world GDP. Longer term trend to higher prices, but short-term risk of derailing economic recovery. © OECD/IEA 2011
  • 4. 2011- The year of supply surprises Non-OPEC Supply 2011 and 1Q12 mb/d Libyan Crude Oil Capacity kb/d Selected Shut-ins & Maintenance If 2010 was 2.0 -50 -50 -130 -180 -70 -20 -160 -140 the year of 1.6 -250 -130 -270 -190 the post- 1.2 -450 -350 -470 -590 recession 0.8 -650 -360 -360 demand 0.4 -850 surge, then… 0.0 1Q11 2Q11 3Q11 4Q11 Planned Maintenance (N. Sea) 1Q12 2010 2011 2012 2013 2014 2015 2016 Unplanned Outages (N.Sea) June 2011 December 2011 Other Unplanned Outages 2011 was the year of unwelcome mb/d Non-OPEC Supply - Yearly Change supply surprises (Libya, outages in 1.5 1.0 MENA countries, North Sea unplanned 0.5 shut-ins) 0.0 But non-OPEC supply should recover in -0.5 2012 -1.0 -1.5 1Q11 3Q11 1Q12 3Q12 NAM OECD EUR FSU China Other Asia LAM PG & Biofuels Other Total © OECD/IEA 2011
  • 5. 2011- The year of supply surprises Non-OPEC Supply 2011 and 1Q12 mb/d Libyan Crude Oil Capacity kb/d Selected Shut-ins & Maintenance If 2010 was 2.0 -50 -50 -130 -180 -70 -20 -160 -140 the year of 1.6 -250 -130 -270 -190 the post- 1.2 -450 -350 -470 -590 recession 0.8 -650 -360 -360 demand 0.4 -850 surge, then… 0.0 1Q11 2Q11 3Q11 4Q11 Planned Maintenance (N. Sea) 1Q12 2010 2011 2012 2013 2014 2015 2016 Unplanned Outages (N.Sea) June 2011 December 2011 Other Unplanned Outages 2011 was the year of unwelcome mb/d Non-OPEC Supply - Yearly Change supply surprises (Libya, outages in 1.5 1.0 MENA countries, North Sea unplanned 0.5 shut-ins) 0.0 But non-OPEC supply should recover in -0.5 2012 -1.0 -1.5 1Q11 3Q11 1Q12 3Q12 NAM OECD EUR FSU China Other Asia LAM PG & Biofuels Other Total © OECD/IEA 2011
  • 6. 2012 Uncertainties abound Global GDP Growth Assumption kb/d Iranian Crude Imports, 2011 Y-o-Y, % Difference vs. Previous MTOGM 1500 3000 5.5 1250 2500 5.0 1000 2000 4.5 750 1500 4.0 500 1000 3.5 250 500 3.0 0 0 2010 2011 2012 2013 Jan-11 Apr-11 Jul-11 Oct-11 Current Previous Total (right) Japan/Korea China/India Other non-IEA Gre/It/Sp/Tur Other Europe Weak economic growth expected in 2012, keeping oil demand growth below 1.0 mb/d for 2012. mb/d 4.0 Iran Crude Oil Capacity Iran increases the geopolitical risk 3.5 premium 2012 likely to be year of two 3.0 mutually counteracting forces – 2.5 economic and geopolitical risks. 2.0 2010 2011 2012 2013 2014 2015 2016 June 2011 December 2011 © OECD/IEA 2011
  • 7. 2012 Uncertainties abound Global GDP Growth Assumption kb/d Iranian Crude Imports, 2011 Y-o-Y, % Difference vs. Previous MTOGM 1500 3000 5.5 1250 2500 5.0 1000 2000 4.5 750 1500 4.0 500 1000 3.5 250 500 3.0 0 0 2010 2011 2012 2013 Jan-11 Apr-11 Jul-11 Oct-11 Current Previous Total (right) Japan/Korea China/India Other non-IEA Gre/It/Sp/Tur Other Europe Weak economic growth expected in 2012, keeping oil demand growth below 1.0 mb/d for 2012. mb/d 4.0 Iran Crude Oil Capacity Iran increases the geopolitical risk 3.5 premium 2012 likely to be year of two 3.0 mutually counteracting forces – 2.5 economic and geopolitical risks. 2.0 2010 2011 2012 2013 2014 2015 2016 June 2011 December 2011 © OECD/IEA 2011
  • 8. Longer term, oil retains itsimportance World primary energy demand 5 000 Additional Mtoe to 2035 4 000 2010 3 000 2 000 1 000 0 Oil Coal Gas Renewables Nuclear  Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035  But oil retains the largest fuel share at 28%Source: World Energy Outlook 2011 © OECD/IEA 2011
  • 9. Longer term, oil retains itsimportance World primary energy demand 5 000 Additional Mtoe to 2035 4 000 2010 3 000 2 000 1 000 0 Oil Coal Gas Renewables Nuclear  Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035  But oil retains the largest fuel share at 28%Source: World Energy Outlook 2011 © OECD/IEA 2011
  • 10. Transport sector to drive oil demand Change in primary oil demand by sector & region in the New Policies Scenario, 2010-2035 China Transport India Buildings Middle East Other Asia Industry Africa Other E. Europe/Eurasia Latin America OECD Asia Oceania OECD Europe OECD Americas -4 -2 0 2 4 6 8 mb/d  Transport net demand grows by 14 mb/d during 2010-2035, outweighing a decline of more than 1 mb/d in other sectorsSource: World Energy Outlook 2011 © OECD/IEA 2011
  • 11. Transport sector to drive oil demand Change in primary oil demand by sector & region in the New Policies Scenario, 2010-2035 China Transport India Buildings Middle East Other Asia Industry Africa Other E. Europe/Eurasia Latin America OECD Asia Oceania OECD Europe OECD Americas -4 -2 0 2 4 6 8 mb/d  Transport net demand grows by 14 mb/d during 2010-2035, outweighing a decline of more than 1 mb/d in other sectorsSource: World Energy Outlook 2011 © OECD/IEA 2011
  • 12. Iraq is the largest source of oil supply growth Major changes in world liquids supply in the New Policies Scenario, 2010-2035 OPEC Iraq Non-OPEC Saudi Arabia Brazil Canada Kazakhstan Venezuela UAE Kuwait United States 0 1 2 3 4 5 6 mb/dThe rise in MENA production is over 90% of the growth in global oil output to 2035, while companies operating elsewhere turn increasingly to more difficult & costly sources © OECD/IEA 2011
  • 13. Iraq is the largest source of oil supply growth Major changes in world liquids supply in the New Policies Scenario, 2010-2035 OPEC Iraq Non-OPEC Saudi Arabia Brazil Canada Kazakhstan Venezuela UAE Kuwait United States 0 1 2 3 4 5 6 mb/dThe rise in MENA production is over 90% of the growth in global oil output to 2035, while companies operating elsewhere turn increasingly to more difficult & costly sources © OECD/IEA 2011
  • 14. Changing oil import needsshift concerns about oil security Net imports of oil 14 Mb/d 2000 12 2010 10 2035 8 6 4 2 0 European United Japan China India ASEAN Union StatesUS oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020 © OECD/IEA 2011
  • 15. Changing oil import needsshift concerns about oil security Net imports of oil 14 Mb/d 2000 12 2010 10 2035 8 6 4 2 0 European United Japan China India ASEAN Union StatesUS oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020 © OECD/IEA 2011
  • 16. Are we entering a Golden Age of Gas ? Natural gas can enhance security of supply: global resources exceed 250 years of current production; while in each region, resources exceed 75 years of current consumption © OECD/IEA 2011
  • 17. Are we entering a Golden Age of Gas ? Natural gas can enhance security of supply: global resources exceed 250 years of current production; while in each region, resources exceed 75 years of current consumption © OECD/IEA 2011
  • 18. The majority of energy subsidiesstill go to fossil fuels World subsidies to fossil fuels consumption & renewable energy 600 Fossil fuel Billion dollars (nominal) consumption 500 Renewable energy 400 production 300 200 100 0 2007 2008 2009 2010Fossil-fuels subsidies amounted to $409 billion in 2010 – down from $550 billion in 2008 but still much larger than subsidies to renewables, which reached $66 billion in 2010 © OECD/IEA 2011
  • 19. The majority of energy subsidiesstill go to fossil fuels World subsidies to fossil fuels consumption & renewable energy 600 Fossil fuel Billion dollars (nominal) consumption 500 Renewable energy 400 production 300 200 100 0 2007 2008 2009 2010Fossil-fuels subsidies amounted to $409 billion in 2010 – down from $550 billion in 2008 but still much larger than subsidies to renewables, which reached $66 billion in 2010 © OECD/IEA 2011
  • 20. Unlocking the potential of energyefficiency  Improving energy efficiency is the quickest and cheapest way to address energy security, environmental & economic challenges  The IEA has developed 25 recommendations for promoting energy efficiency which could save:  82 EJ/year by 2030 (17% of the current global energy demand)  Governments have a critical role to play in improving energy efficiency:  stimulate investment in energy efficiency  accelerate implementation through national energy efficiency strategies  monitoring, enforcement & evaluation  International collaboration is also vital © OECD/IEA 2011
  • 21. Unlocking the potential of energyefficiency  Improving energy efficiency is the quickest and cheapest way to address energy security, environmental & economic challenges  The IEA has developed 25 recommendations for promoting energy efficiency which could save:  82 EJ/year by 2030 (17% of the current global energy demand)  Governments have a critical role to play in improving energy efficiency:  stimulate investment in energy efficiency  accelerate implementation through national energy efficiency strategies  monitoring, enforcement & evaluation  International collaboration is also vital © OECD/IEA 2011
  • 22. Energy is at the heart ofthe climate challenge 45 CO2 emissions (giggatonnes) 6°C trajectory 40 35 30 2°C trajectory 25 20 Delay until 2017 Delay until 2015 15 10 Emissions from existing 5 infrastructure 0 2010 2015 2020 2025 2030 2035 Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc © OECD/IEA 2011
  • 23. Energy is at the heart ofthe climate challenge 45 CO2 emissions (giggatonnes) 6°C trajectory 40 35 30 2°C trajectory 25 20 Delay until 2017 Delay until 2015 15 10 Emissions from existing 5 infrastructure 0 2010 2015 2020 2025 2030 2035 Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc © OECD/IEA 2011
  • 24. Mexico in the global energycontext The IEA projects Mexico’s oil production to gradually decline in the medium term, but then to once again grow in line with the country’s resource potential Thanks to its large reserves of unconventional gas, Mexico could be among the leaders in any potential ‘Golden age of Gas’ Energy efficiency: Mexico has already had considerable success with its end-use programme With its vast potential in renewable energy, Mexico could become an avant-garde player in areas such as geothermal, solar and wind energy Mexico has established itself as a proactive player in both national & international climate policy © OECD/IEA 2011
  • 25. Mexico in the global energycontext The IEA projects Mexico’s oil production to gradually decline in the medium term, but then to once again grow in line with the country’s resource potential Thanks to its large reserves of unconventional gas, Mexico could be among the leaders in any potential ‘Golden age of Gas’ Energy efficiency: Mexico has already had considerable success with its end-use programme With its vast potential in renewable energy, Mexico could become an avant-garde player in areas such as geothermal, solar and wind energy Mexico has established itself as a proactive player in both national & international climate policy © OECD/IEA 2011
  • 26. Key Messages In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher Rising transport demand and upstream costs reconfirm the end of cheap oil New options are opening up for natural gas, but ‘golden standards’ will be needed if it is to enter a ‘golden age’ Energy efficiency is the first step toward enhancing energy security & climate change mitigation Despite steps in the right direction, the door to 2OC is closing © OECD/IEA 2011
  • 27. Key Messages In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher Rising transport demand and upstream costs reconfirm the end of cheap oil New options are opening up for natural gas, but ‘golden standards’ will be needed if it is to enter a ‘golden age’ Energy efficiency is the first step toward enhancing energy security & climate change mitigation Despite steps in the right direction, the door to 2OC is closing © OECD/IEA 2011