The document discusses trends in global energy markets from 2010 to 2035 according to projections from the International Energy Agency's World Energy Outlook 2012. It notes that energy demand is expected to rise by over one-third by 2035, driven by economic growth in China, India, and the Middle East. While dependence on oil and gas imports is projected to increase in many countries, the US is expected to reduce its dependence due to increased domestic unconventional oil and gas production. The growth of liquefied natural gas trade is also expected to diversify international gas markets away from traditional oil-linked pricing.

1. Shale Revolution and Energy Security
: Role of LNG
February 2013, Bangkok
Nobuo TANAKA
Former Executive Director of the IEA
Global Associate of Energy Security and Sustainability, IEEJ
© OECD/IEA 2011

2. Emerging economies steer energy markets
Share of global energy demand
6 030 Mtoe 12 380 Mtoe 16 730 Mtoe
100% Rest of non-OECD
Non-OECD
Middle East
80%
India
China
60%
OECD
40%
IEA WEO2012
20%
1975 2010 2035
Global energy demand rises by over one-third in the period to 2035,
underpinned by rising living standards in China, India & the Middle East
2

3. Primary Energy Demand by Fuel
IEA WEO2012
3

4. A United States oil & gas transformation
US oil and gas production
mboe/d 25 IEA WEO2012
20
Unconventional gas
15
10 Conventional gas
Unconventional oil
5
Conventional oil
1980 1990 2000 2010 2020 2030 2035
The surge in unconventional oil & gas production has implications
well beyond the United States
4

5. Iraq oil poised for a major expansion
IEA WEO2012
Iraq oil production Iraq oil exports
mb/d 9 North mb/d 9 Other
8 Centre 8 Asia
7 South 7
6 6
5 5
4 4
3 3
2 2
1 1
2012 2020 2035 2012 2020 2035
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
5

6. Middle East oil to Asia:
a new Energy Silk Road
Middle East oil export by destination
mb/d 7 2000
6 2011
2035
5
4 IEA WEO2012
3
2
1
China India Japan & Korea Europe United States
By 2035, almost 90% of Middle Eastern oil exports go to Asia; North America’s
emergence as a net exporter accelerates the eastward shift in trade
6

7. Different trends in oil & gas
import dependency IEA WEO 2012
Net oil & gas import dependency in selected countries
100% Japan & Korea
Gas
2010
Gas imports
80% European Union 2035
60%
40% China
20% India
United States
0%
Gas exports
-20%
ASEAN
-40%
-60%
0% 20% 40% 60% 80% 100%
Oil Imports Oil
While dependence on imported oil & gas rises in many countries,
the United States swims against the tide
7

8. IEA WEO2012
8

9. Overseas Investments by Chinese National Oil Companies: Assessing the Drivers and Impacts
9

10. Golden Age for Natural Gas?
IEA WEO2012
10

11. Natural gas: towards a globalised market
IEA WEO2012
Major global gas trade flows, 2010
2035
Rising supplies of unconventional gas & LNG help to diversify trade flows,
putting pressure on conventional gas suppliers & oil-linked pricing mechanisms
11

12. Russia goes to East :Russian Natural Gas Pipelines
ECD/IEA, 2011
Figure 8.15 Major gas fields and supply infrastructure in Russia
Selected gas field Chukchi
Sea
Existing gas pipeline
Other offshore Arctic
IEA WEO 2011
Pipeline planned/under const. Bering
Sea
Existing LNG export terminal E S
ast iberianSea
Planned LNG export terminal
Barents Sea
Norway Other offshore Arctic
Shtokman LaptevSea
Neth. Den. Sweden
Finland Murmansk K ea
araS
Export to BarentsSea
Germany N
o
d
r S
e
r
t
a
m
BalticSea
Finland Yamal
Cz. Poland Estonia Peninsula SouthT ambei
Export to Latvia Timan Bovanenkovo
Rep. Pechora
Europe Lithuania St. Petersburg
Slov. Rep. SR
. usskoe
Yamburg
Hungary Belarus N
n
e
h
t
r
o L t
h s
ig Zapolyarnoe Yakutsk
Medvezhye Sakhalin
Ukhta Seaof
Moscow Urengoy Eastern Siberia Okhotsk
Romania Sakhalin
Export to
Mol. Ukraine
Surgut
R U S S I A Island
Europe Volga/ Komsomolsk
Sth
Urals Western Siberia
ou Tyumen Chayandin
Sa
trem Khabarovsk
Orenburg Krasnoyarsk
Black
S ea Volgograd Tomsk Kovykta
Caspian Kemerovo Daqing
Astrakhan Novosibirsk
Georgia Irkutsk Harbin
Turkey K hvalynskoe Vladivostok
T sentralnoe Kazakhstan
Arm. China Japan
Azer. Caspian North
Syria Mongolia
Sea
China Korea
U b ki
This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
12

13. February 2012 saw a jump of the European hub price level due to a sudden increase in demand as
result of extremely cold weather and reduced Russian supplies. However, Day-Ahead prices returne
International Gas Prices
to normalcy within two weeks after Russian supplies dropped below nominated levels (see Box 1).
How can Asia reduce Asian coal and Brent, 2008-12
Figure 54 International gas prices, Asian Premium?
25
20
15
USD/MBtu
10
5
0
Henry Hub NBP German border price Japan LNG Brent Asian coal marker
Source: ICE, Japanese Customs, and the German customs.
IEA Mid Term Gas Market Review 2012
13

14. IEA WEO2012
14

15. Golden Rules for a Golden Age of Gas
The “Golden Rules” are principles that can allow governments, industry & other
stakeholders to address these environmental & social impacts:
1. Measure, disclose & engage
2. Watch where you drill
3. Isolate well & prevent leaks
4. Treat water responsibly
5. Eliminate venting, minimise flaring & other emissions
6. Be ready to think big
7. Ensure a consistently high level of environmental performance
They are “Golden
Rules” because their
application can ensure
operators have a
“social license to
operate”, paving the
way for a golden age
of gas
15

16. Conversion or Diversion?
Trends of International Gas Prices
1.6 Natural gas:
Fuel price divided by oil price
1.4 Japan
Europe
1.2
United States
1.0
Coal:
0.8
OECD
0.6
0.4
0.2 IEA WEO 2012
0
1990 2000 2010 2020 2030 2035
Natural gas prices are assumed to remain low relative to oil prices,
while coal prices rise much less than those of both oil & gas
16

17. Technology helps! Hydrogen Economy with MCH
• Large volume Hydrogen transportation & storage technology will be essential to build ‘Hydrogen Community’.
• ‘Hydrogen Community’ realizes Low Emission Carbon Recycling Society, with empowered resistance against disasters.
• New path toward the Hydrogen Society will enhance innovation and create New Industries.
・CO2 Recycle
Renewable Energy (Global) Energy Sector ( CO2 + H2→CO+H2O)
Industrial Sector
City Gas
・H2 Mixture
Petroleum
Chemical
Power Gen. ・Feedstock ・Desulfurization
Green Hydrogen Power Storage ・Heat Recycle ・Cracking
(Renewable Sources) MCH
・Elec. Stabilizer
・Pure H2/ Mixed Fuel Steel
Clean Hydrogen ・Stand-by for Emergency
・Fuel Cell ・H2 Reduction
(Hydrocarbon Sources)
Logistics Sector
MCH Port Facility
・Petro/Chem. By-product ・FC /Engines
Hydrogen Supply Logistics
・SRM with EOR/CCS Tanker / Ferry
(Dehydrogenation) MCH
・FC forklift
・Gasification MCH
MCH ・H2mixed Fuel GHP ・Fuel Cell Ship
MCH MCH ・Hydrogen mixed fuel Engine
MCH Truck
Strategic Energy Reserve Hydrogen / H2-CNG Office & Commercial Sector
(Large volume) Train Fueling Station
・FCV
Bus ・Heat Recycle
・H2-CNG Engine MCH
・Fuel Cell Train
・H2 mixed fuel Engine Office & Commercial
Solar Residential Sector ・FCV Building
MCH
・H2-CNG Engine
Wind
MCH
MCH MCH
Renewable Energy Distributed House / Condominium
(Local) Power Gen. Distributed DHC
MCH Car Power Gen. ・Boiler / Chiller
MCH ・Fuel Cells
・H2 mixed fuel Engine ・FCV (Pure H2/mixed)
・CNG mixed engine ・Cogeneration
Hydrogen ・Backup Power
・Energy Storage
Heat
Electricity
(Note) MCH : Methylcyclohexane FC : Fuel Cell FCV : Fuel Cell Vehicle GHP : Gas Heat Pump DHC : District Heating and Cooling 17

18. A power shift to emerging economies
Change in power generation, 2010-2035
IEA WEO2012
Coal Gas Nuclear Renewables
China
India
United States
European Union
Japan
-1 000 0 1 000 2 000 3 000 4 000 5 000 6 000
TWh TWh
The need for electricity in emerging economies drives a 70% increase in worldwide
demand, with renewables accounting for half of new global capacity
18

19. The multiple benefits of renewables
come at a cost
Global renewable energy subsidies IEA WEO2012
Billion $250
Biofuels:
$1 200 billion
$200 2011-2035
$150
Electricity:
$100 2012-2035
$2 600 billion
Existing capacity
$50
$960 billion
2011 2015 2020 2025 2030 2035
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
19

20. IEA WEO2012
About 1/5 of German pretax price for electricity was due to
renewables. 12% in Italy, 11% in UK and 4% in France. 20

21. Japan’s Power Sector: Renewables, gas and
energy efficiency leading the charge
IEA WEO2012
A decline in nuclear is compensated by a 3-fold increase in electricity from
renewables, a continued high reliance on LNG imports & improvements in efficiency
21

22. Wide variations in the price of power
IEA WEO2012
Average household electricity prices, 2035
cents/kWh 25
20
2011
15 OECD average
10 2011
Non-OECD
5 average
China United States European Union Japan
Electricity prices are set to increase with the highest prices persisting in the
European Union & Japan, well above those in China & the United States
22

23. Not only Feed-in-tariffs but Grid integration !
Snapshot of present penetration potentials
“Harnessing Variable Renewables” by IEA
23

24. Power Grid Connection in Europe
Physical energy flows between European countries, 2008 (GWh)
Source: ENTSO-E
24

25. Power grid in Japan
Generating Hokkaido
Hydro Gas Coal company
Oil Nuclear Other In-house
Power utility company generation
Tohoku
60 hz <-------
Chugoku Kansai Hokuriku
Tokyo
Kyushu
29GW
Shikoku
12GW
Okinawa Chubu --- 50 hz
2GW 40GW
Source: Agency for Natural Resources and Energy, The Federation of Electric Power Companies
of Japan, Electric Power System Council of Japan, The International Energy Agency
25

26. Nuclear Power in World Energy Outlook 2012
IEA WEO2012
In aggregate, world nuclear capacity reaches 580GW in 2035, 50GW lower from
2011 WEO. Production rises from 2756TWh to 4370TWh, almost 60%
increase, though the share in total generation falls from 13% to 12%.
26

27. Lessons of the Fukushima
• Lessons to be Shared
– Think about the unthinkable; Tsunami and Station Black Out. Large scale Blackout. Change
total mind set for “Safety”.
– Prepare for the severe accidents by defense in depth, common cause failure & compound
disasters.
– Clarify why it happened only to Fukushima Daiichi and NOT to other sites.
• Safety Principles
– Fukushima accident was caused by human error and should have been avoided. (Parliament
Investigation Commission report )
– International Cooperation : A nuclear accident anywhere is an accident everywhere.
– Independent Regulatory authority ; Transparency and Trust, “Back Fitting” of regulation
• Secured supply of Electricity
– Power station location
– Strengthened interconnection of grid lines
• Once disaster has happened, Recovery from disaster is at least as important as preparing
for it.
– FEMA like organization and training of the nuclear emergency staff including the self defense
force ; integration of safety and security.
– New Technology. New type of Reactors such as Integral Fast Reactor, Thorium Reactor
27

28. Integral Fast Reactor and Pyroprocessing
Dr. YOON IL CHANG
Argonne National Laboratory
IFR has features as Inexhaustible Energy Supply ,Inherent Passive Safety ,Long-term Waste
Management Solution , Proliferation-Resistance , Economic Fuel Cycle Closure.
28

29. What is Energy Security in the
21st Century?
29

30. Diversity means Energy Security .
”Safety and certainty in oil lie in variety and variety alone.” ( Churchill )
Energy Self -Sufficiency rates by fuels in 2010
ASEAN 96% 30% 0%
IEA 51% 8% 11%
EU 27 26% 10% 14%
0% 20% 40% 60% 80% 100% 120% 140%
Self sufficiency
=inland production / tpes
(2010 estimates)
IEA
Nuclear is an important option for countries with limited indigenous energy resources .
30

31. North American Gas Infrastructure
Mid-Term Oil & Gas Market 2010, IEA
31

32. ンとＬＮＧ基地を建設中。
Gas Infra in Europe: New Pipelines and LNG ports.
現在 ロシア以外からのパイプライン
ロシアからのパイプライン
ＬＮＧ基地（1999年までに運開）
ＬＮＧ基地（2000年以降運開）
ＬＮＧ基地（建設中・計画中）
（出所）ガス事業のあり方に関する検討会資料（日本ガス協会） - 31-
32

33. Connecting MENA and Europe: " Desertec" as
visionary “Energy for Peace"
Source: DESRETEC Foundation
33

34. ASEAN is working on Power Grid Interconnections.
34

35. © OECD/IEA, 2009
ASEAN is working on Gas Pipeline System.
Figure 15.16 The Trans-ASEAN Gas Pipeline (TAGP)
Chapter 15 - Overview of energy trends in S
Existing gas pipeline
CHINA Planned or under construction gas pipeline
INDIA
Gas production area
LNG liquifaction plant
Hanoi Planned LNG liquifaction plant
MYANMAR
LAOS Planned LNG regasification terminal
Vientiane
Yangon THAILAND Luzon
VIETNAM Mariveles Manila
outheast Asia
Bangkok
Map Ta Phut CAMBODIA LNG(Baatan)
Phnom Penh PHILIPPINES
Ho Chi Minh
Khanom Palawan
Krabi Mindanao
Arun Lubuan
M A L A Y S I A Lumut BRUNEI
Medan Natuna Bandar Seri
Kuala Lumpur Begawan
Dumai SINGAPORE Bintulu MLNG
Jurong Isl. Bontang
Sumatra Sungiasalak Kalimantan Senipah
Tangguh
Plaju Sulawesi Seram
I N D O N E S I A Papua
Bali
W Java
est Lombok
Km Surabaya
Jakarta Sumbawa Flores EAST TIMOR
0 500 Pasuruan Masela
Java East Java Dili
575
The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA.
Source: ASCOPE Secretariat
35
15

36. New concepts for North East Asia Gas & Pipeline Infrastructure
36

37. Energy for Peace in Asia. A New Asian Vision?
Presentation by Mr. Masayoshi SON
37

38. One cannot enhance energy security by risking someone
else‘s.
’
38

39. ANNEX
39

40. Global Middle-class expands from 1 to 3 billion by 2030
（Global Trends 2030 by National Intelligence Council )
Middle-class membership is
defined as per capita
household expenditures of
$10-50 per day at PPP.
Goldman Sachs used a
comparable GDP per capita
of $6,000-30,000 per year,
Addition of 2 billion people triggers the price revolution in commodities, labor, etc.
40

41. The Efficient World Scenario:
a blueprint for an efficient world
Total primary energy demand by scenario
Mtoe 18 000
New Policies Reduction in 2035
17 000
Scenario Coal 1350 Mtce
16 000 Oil 12.7 mb/d
Gas 680 bcm
15 000
Others 250 Mtoe
14 000 Efficient
World Scenario
13 000
12 000
2010 2015 2020 2025 2030 2035
Economically viable efficiency measures can halve energy demand growth to 2035;
oil demand savings equal the current production of Russia & Norway
41

42. Game changers : China then India. 6 billion people join 1 billion.
WEO 2007 42

43. Economic Death Spiral may hit Japan
• Blockage of the Strait of Hormuz
– Oil Price may double to $160 / barrel
– Japan’s current account surplus ( 9 trillion yen in 2011 )
may turn to deficit of 6 trillion yen.
– Without further restarting of nuclear power plants,
deficits may reach 12 trillion yen.
• Confidence on Japan’s public finance may be lost.
– Current Account surplus is the basis for confidence
– Persisting Deficit may lead to capital flight from Japan
– Power crisis enhances flight of manufacturing industries
• Loss of Confidence in JGB and Yen. Capital move into
commodities means higher prices of oil.
• Total Economic Melt Down may happen.
43

44. Fossil Fuel Consumption Subsidies
IEA WEO2012
In 2011, fossil-fuel consumption
subsidies worldwide are estimated to
have totalled $523 billion, $111
billion higher than in 2010, at a
weighted-average rate of 24%
44

45. Dr. YOON IL CHANG
Argonne National Laboratory 45