1.
© OECD/IEA 2018
Outlook for fuels webinar
23 November 2018

2.
© OECD/IEA 2018
Oil
Advanced
economies
Developing
economies
Gas
Advanced
economies
Developing
economies
Fuelling the demand for energy
The increase in demand would be twice as large without continued improvements
in energy efficiency, a powerful tool to address energy security & sustainability concerns
Coal
Advanced
economies
Developing
economies
Change in global energy demand, 2017-2040
-600
-300
0
300
600
900
1 200
1 500
Renewables & nuclear
Mtoe
Advanced
economies
Developing
economies
Renewables
Nuclear
Industry
Other
Power
Cars
Other
Petro-
chemical
Cars
Power
Other
Power

3.
© OECD/IEA 2018
Efficiency is key to mitigating rises in oil demand in cars
Energy efficiency is the key mechanism that curbs oil consumption in cars.
By 2040 there are no cars sold that have an efficiency worse than 6.5 litres/100 km.
10
20
30
40
2017 2040
Electric
Gas
< 4
4 - 6
6 - 8
> 8
Fuel efficiency
(litres/100km)
Change in global oil demand for cars
Fleet growth
Fuel efficiency
Natural gas
Biofuels
Electricity
Reductions
Increases
20%
40%
60%
80%
100%
2017 2040
Global car sales
mb/d

4.
© OECD/IEA 2018
What impact of plastics recycling on demand?
Increased recycling do not offset the underlying growth in demand for chemical products;
If recycling rates were to double, this would cut demand in 2040 by 1.5 mb/d
Impact of plastic recycling on oil demand for petrochemical feedstock
10%
20%
30%
40%
5
10
15
20
2017 2025 2030 2035 2040
mb/d
Oil demand
Recycling rates (right axis)
Increased recycling rates
(right axis)
Reduction by
increased recycling

5.
© OECD/IEA 2018
Can US shale alone avoid a turbulent oil market?
Global oil outlook
Oil demand looks robust in the near term; if approvals of new conventional projects
remain low, market stability would require continuous exceptional growth in US shale
65
70
75
80
85
90
95
100
105mb/d
Growth required from US shale
Growth from other sources
(at current project approval rates)
Demand
2010 2015 2020 2025
Currently producing fields

6.
© OECD/IEA 2018
In most regions, oil is currently around 20-40% of energy demand…
Oil demand and shares by region
200
400
600
800
0% 10% 20% 30% 40% 50% 60%
Mtoe
share in the energy mix
United States
Europe
Korea
China
India Southeast
Asia
Russia
Middle East
Japan
20402017
OilNatural gas
...while the role of gas varies significantly, and evolves in different directions
Gas demand and shares by region
Oil and gas share differences

7.
© OECD/IEA 2018
Gas goes east
Selected LNG and pipeline gas exports to Europe and Asia in the New Policies Scenario
In Europe, the import picture becomes more diverse, but most of the additional growth in
global gas trade to 2040 is to satisfy demand in Asia
300 200 100 100 200 300
bcm
Exports to Europe Exports to Asia
Russia
Middle East
Africa
Australia
United States
Caspian
Pipeline
LNG
(2017) (2017)(2040) (2040)

8.
© OECD/IEA 2018
Coal: a rock in a hard place?
Global coal production from existing mines drops markedly by 2030.
More than 40% of coal production in 2040 is from new mines.
1 000
2 000
3 000
4 000
5 000
6 000
2015 2020 2025 2030 2035 2040
New mines:
greenfield investment
Existing mines:
brownfield investment
Existing mines
Mtce
Coal production in the New Policies Scenario

9.
© OECD/IEA 2018
Fossil fuels in the Sustainable Development Scenario
Fossil fuel demand in the New Policies Scenario & Sustainable Development Scenario
Coal & oil demand drop in the Sustainable Development Scenario. Gas is the largest fossil
fuel in 2040 while low-carbon technologies & improvements in efficiency expand rapidly
0
1 000
2 000
3 000
4 000
5 000
2000 2005 2010 2015 2020 2025 2030 2035 2040
Coal
Oil
Gas
Mtoe
New Policies Scenario
Sustainable Development
Scenario

10.
© OECD/IEA 2018
Not all oil is created equal
Indirect GHG emissions from oil production, refining and transport, 2017
Indirect emissions of oil are 10% to 30% of its full lifecycle emissions intensity; reducing
methane emissions and flaring are some of the most cost-effective ways to reduce this
50
100
150
200
250
300
0 10 20 30 40 50 60 70 80 90
mboe/d
Product transport
Refining
Crude transport
Methane
Flaring
Energy for extraction
kg CO2-eq/boe

11.
© OECD/IEA 2018
The forgotten side of energy transitions
 Indirect emissions from oil & gas operations are around 5 200 million tonnes CO2-eq
globally. This is around 15% of total energy sector GHG emissions
 Eliminating methane leaks and reducing flaring are some of the most cost-effective
ways to provide drastic reductions to the emissions intensity of oil and gas supply
 Another option is to combine CO2 capture with enhanced oil recovery projects.
Doing so could also help reduce the costs of future CCUS projects more widely
 Multiple upstream projects are being developed that use renewable-generated steam
or electricity. New LNG facilities could also benefit from electrification or use of CCUS
 A $50/tCO2 is already used by many companies when screening projects. If applied
across the oil & gas supply chains, this would cut emissions in 2040 by 1 000 MtCO2

12.
© OECD/IEA 2018
Is hydrogen heading back to the future?
Supply routes for low-carbon hydrogen
There are multiple options for the production, transportation and
consumption of zero-carbon hydrogen and hydrogen-based fuels

13.
© OECD/IEA 2018
2017
What is the future role of bioenergy?
Bioenergy currently dominates renewable heat and transport; despite growing use of
electricity, bioenergy remains the largest renewable energy source for these sectors
200
400
600
800
1000
New
Policies
Scenario
Sustainable
Development
Scenario
2017
Bioenergy Renewable electricity Solar Geothermal
mtoe 1200
Renewable energy use in transport Renewable energy use in heat
2040 2040
New
Policies
Scenario
Sustainable
Development
Scenario

14.
© OECD/IEA 2018
Conclusions
 The links between energy & geopolitics are strengthening & becoming more
complex, a major factor in the outlook for energy security
 A mismatch between robust oil demand in the near term & a shortfall in new projects
risks a sharp tightening of oil markets in the 2020s
 Demand growth in Asia has given developers confidence to progress new LNG
projects. Exporters will need to adapt business models to the demands of buyers
 There is significant potential to reduce the indirect emissions from existing oil and
gas operations, especially from methane and flaring
 Modern bioenergy, carbon capture, utilisation and storage (CCUS), and hydrogen are
set to be increasingly important aspects of the outlook for fuels