PART A L GLOBAL ENERGY TRENDS TO 2030 E O F · Long-term oil-supply cost curve 217 Field-by-field...

PART BOIL AND GAS PRODUCTION PROSPECTS

PART CTHE ROLE OFENERGY INCLIMATE POLICY

ANNEXES

PART AGLOBAL ENERGY TRENDS TO 2030

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FOREWORD

CLIMATE POLICY SCENARIOS

IMPLICATIONS FOR ENERGY INVESTMENT

THE POST-2012 CLIMATE POLICY FRAMEWORK

IMPLICATIONS OF THE REFERENCE SCENARIO FOR THE GLOBAL CLIMATE 16

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ENERGY USE IN CITIES

OIL MARKET OUTLOOK

NATURAL GAS MARKET OUTLOOK

POWER SECTOR OUTLOOK

GLOBAL ENERGY TRENDS

COAL MARKET OUTLOOK

CONTEXT AND PRINCIPAL ASSUMPTIONS 1

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RENEWABLE ENERGY OUTLOOK

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ANNEXES

NATURAL GAS RESOURCES AND PRODUCTION PROSPECTS

UPSTREAM INVESTMENT PROSPECTS

TURNING OIL RESOURCES INTO RESERVES

FIELD-BY-FIELD ANALYSIS OF OIL PRODUCTION

PROSPECTS FOR OIL PRODUCTION

THE STRUCTURE OF THE UPSTREAM INDUSTRY

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PROSPECTS IN OIL- AND GAS-EXPORTING SUB-SAHARAN AFRICAN COUNTRIES 15

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14 World Energy Outlook 2008

Foreword 3Acknowledgements 5List of Figures 20List of Tables 28List of Boxes 32List of Spotlights 34Executive Summary 37Introduction 51

Part A: Global energy trends to 2030 56

Context and principal assumptions 59Highlights 59Government policies and measures 60Population 63Economic growth 64Energy prices 68

Oil prices 68Natural gas prices 72Steam coal prices 73

Technology 73

Global energy trends 77Highlights 77Demand 78

Primary energy mix 78Regional trends 80Sectoral Trends 83

Energy production and trade 85Resources and production prospects 85Inter-regional trade 87

Energy investment 88Trends by region and energy source 88

Oil market outlook 91Highlights 91Demand 92

Trends in primary oil demand 92Regional trends 97Sectoral trends 98Implications for spending on oil 100

Production 102Inter-regional trade 105

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Natural gas market outlook 109Highlights 109Demand 110

Regional trends 112Sectoral trends 113

Production 115Inter-regional trade 119

Coal market outlook 123Highlights 123Demand 124Reserves and production 127Inter-regional trade 131Coal prices and supply costs 134Coal investment 136

Power sector outlook 139Highlights 139Electricity demand 140Electricity supply 142

Outlook for electricity generation 142Trends in coal-fired generation 144Trends in gas-fired generation 146Trends in oil-fired generation 147Trends in nuclear power 147Trends in renewable energy 149Trends in CO2 capture and storage 149New capacity and investment needs in infrastructure 151

Electricity generating costs 152Trends in construction costs 152Cost and efficiency assumptions 153

Electricity prices 156

Renewable energy outlook 159Highlights 159Global trends in the use of renewable energy 160Renewables for electricity 162

Hydropower 165Wind power 166Solar photovoltaics 168Concentrating solar thermal power 170Geothermal power 170Tide and wave power 171Biomass for electricity 171

Biofuels 171

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Renewables for heat 176Traditional biomass 177Investment in renewable energy 178

Energy use in cities 179Highlights 179Why focus on cities? 180Current and projected energy use in cities 182United States 184

Background 184Reference Scenario projections 185

European Union 187Background 187Reference Scenario projections 188

Australasia 189Background 189Reference Scenario projections 190

China 191Background 191Reference Scenario projections 192

Part B: Oil and gas production prospects 194

Turning oil resources into reserves 197Highlights 197Classifying hydrocarbon resources 198Latest estimates of conventional oil reserves and resources 201

Proven reserves 201Ultimately recoverable resources 204

Reserves growth and enhanced oil recovery 209Carbon-dioxide enhanced oil recovery (CO2-EOR) 213

Non-conventional oil resources 215Extra-heavy oil and oil sands 215Oil shales: a technological milestone in sight? 217

Long-term oil-supply cost curve 217

Field-by-field analysis of oil production 221Highlights 221Understanding production patterns and trends 222

The importance of size 225Regional differences 227

Oilfield production profiles and characteristics 229Standard production profiles 229Focus on giant fields 232Changes in production profiles over time 233

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Measuring observed production decline rates 233Approach and definitions 233Results of the analysis 236The impact of field age and maturity 240Trends in observed decline rates 241Deriving an estimate of the average global observed decline rate 242

Trends in natural decline rates 243Estimating historical trends 243Long-term prospects for natural decline rates 247

Prospects for oil production 249Highlights 249Global oil production trends 250

Summary of projections in the Reference Scenario 250Crude oil output at existing fields 255Contribution of new fields to crude oil production 256Enhanced oil recovery (EOR) 260Natural gas liquids (NGLs) 261Non-conventional oil 262Crude oil quality 265

Outlook by country and region 266Non-OPEC production 266OPEC production 272

Sensitivity of oil output to decline rates 276

Natural gas resources and production prospects 279Highlights 279Gas resources and reserves 280

Conventional gas 280Non-conventional gas 284

Gas production prospects 289Regional trends 291

OECD North America 291OECD Europe 293OECD Oceania 294Eastern Europe/Eurasia 294Non-OECD Asia 297Middle East 298Africa 300Latin America 302

Upstream investment prospects 303Highlights 303Recent investment trends and near-term outlook 304

New upstream projects 310Capital-cost trends 311

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Trends in upstream activity 320Implications for oil-production capacity 322

Outlook for investment to 2030 323Potential barriers to upstream investment 325

Depletion policies of resource-rich countries 325Profitable opportunities for international companies to invest 328Political constraints 329Availability of people and equipment 329

The structure of the upstream industry 333Highlights 333The emergence of a new world order for oil 334The resurgence of the national oil companies 336International oil companies in profitable retreat 343Implications for future investment and supply 348

Towards a more efficient industry 350Strengthening strategic partnerships 351

Prospects in oil- and gas-exporting sub-Saharan African countries 355Highlights 355Overview 356Outlook for oil and gas production, exports and government revenues 358

Resources and reserves 358Oil and gas production and exports 359Oil refining 363Oil and gas export revenues 364

Household energy access in sub-Saharan African countries 364Cooking practices 365Electricity access 366Projected trends in access to modern energy services 369Quantifying the costs involved in expanding access 370

Managing revenues from oil and gas 374

Part C: The role of energy in climate policy 378

Implications of the Reference Scenario for the global climate 381Highlights 381Projected trends in energy-related CO2 emissions 382

Overview 382Regional trends 384Trends per capita and per unit of GDP 388Sectoral trends 391

Projected trends in overall greenhouse-gas emissions 397Long-term greenhouse-gas concentrations and average global temperature 401The impact of global warming on the energy sector 402

Hydropower 402Other renewable energy systems 403

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Thermal and nuclear power 404Local and regional air pollution 404

Projected trends in local and regional air pollution 404

The post-2012 climate policy framework 407Highlights 407Co-ordinated global action to address climate change 408Defining the long-term global climate objective 410

Environmental and societal effects of different stabilisation levels 410Practical considerations in reducing emissions 411Climate scenarios modelled in WEO-2008 413

Participation 416Principles for allocating responsibilities 419

Policy mechanisms 421Cap-and-trade systems 423Sectoral agreements 427National policies and measures 432

Climate policy scenarios 435Highlights 435Methodology and assumptions 436

Modelling approach 436Economic growth 437Energy prices 437Carbon prices 439

Overview of the results of the climate scenarios 439Primary energy demand 439Energy-related CO2 emissions 442Emissions of gases other than energy-related CO2 447

The 550 Policy Scenario: results by sector 450Power generation 450Industry 457Transport 461Buildings and other sectors 464

The 450 Policy Scenario: results by sector 467Power generation 467Industry 472Transport 473Buildings and other sectors 474

Co-benefits in the 550 and 450 Policy Scenarios 475Energy security 475Local and regional air pollution 476

Implications for energy investment 479Highlights 479The investment challenge of transforming energy 480Investment implications of the 550 Policy Scenario 480

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Regional implications of the 550 Policy Scenario 481Implications of the 550 Policy Scenario for the electricity sector 483Implications of the 550 Policy Scenario for the transport sector 485Implications of the 550 Policy Scenario for buildings and industry 487Costs and benefits of the 550 Policy Scenario 487

Investment implications of the 450 Policy Scenario 488Replacement of capital stock in the power sector 492Technology diffusion and interaction with carbon markets 495

Carbon markets 495Technology diffusion 499

Implications for policy 501

ANNEXES 503Annex A. Tables for Reference Scenario projections 505Annex B. Abbreviations, definitions and conversion factors 541Annex C. Acronyms 551Annex D. References 555

List of fi gures

Part A: Global energy trends to 2030

Chapter 1. Context and principal assumptions 1.1 Energy subsidies in non-OECD countries, 2007 621.2 Population by major region 631.3 Rate of growth of per-capita income by region 671.4 Average IEA crude oil import price 691.5 Assumed natural gas and coal prices relative to crude oil 721.6 Typical lifetimes of energy-related capital stock 75

Chapter 2. Global energy trends 2.1 World primary energy demand by fuel in the Reference Scenario 802.2 World primary energy demand by region in the Reference Scenario 812.3 Incremental primary energy demand by fuel in the Reference Scenario, 2006-2030 822.4 Per-capita primary energy demand by region, 2030 832.5 Incremental world fossil-fuel production in the Reference Scenario 872.6 Cumulative investment in energy-supply infrastructure in the Reference Scenario, 2007-2030 89

Chapter 3. Oil market outlook 3.1 Change in world primary oil demand and real GDP growth 933.2 Oil intensity by region in the Reference Scenario 943.3 Global oil demand and the oil price in the three oil shocks 953.4 Average IEA crude oil import price in different currencies 953.5 Change in primary oil demand by region in the Reference Scenario, 2007-2030 97

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21Table of contents

3.6 Incremental oil demand by sector in the Reference Scenario, 2006-2030 983.7 Light-duty vehicle stock by region in the Reference Scenario 1003.8 Share of oil spending in real GDP at market exchange rates in the Reference Scenario 1023.9 World oil production by source in the Reference Scenario 1043.10 Oil-import dependence by major importing region in the Reference Scenario 1053.11 Oil export fl ows from the Middle East 107

Chapter 4. Natural gas market outlook4.1 Change in gas intensity by region in the Reference Scenario 1124.2 Increase in primary demand for natural gas by region in the Reference Scenario 1124.3 Increase in world primary natural gas demand by sector in the Reference Scenario, 2006-2030 1134.4 World primary natural gas demand by sector in the Reference Scenario 1144.5 Natural gas production by region in the Reference Scenario 1164.6 Main net inter-regional natural gas trade fl ows in the Reference Scenario, 2006 and 2030 1204.7 World inter-regional natural gas trade by type in the Reference Scenario 1214.8 Inter-regional exports of LNG by source in the Reference Scenario 121

Chapter 5. Coal market outlook5.1 Incremental world primary energy demand by fuel, 2000-2006 1245.2 Sectoral shares in coal demand by region in the Reference Scenario 1265.3 World energy-related CO2 emissions by fuel in the Reference Scenario 1275.4 Proven coal reserves in leading producing countries, 2005 1285.5 World coal production by type in the Reference Scenario 1295.6 Net inter-regional hard coal trade in the Reference Scenario 1335.7 Index of selected fuel prices 1355.8 Coal supply cash-cost curve for internationally traded steam coal for 2007 and selected average FOB prices for 2007 and fi rst-half 2008 1365.9 Structure of coal-supply costs for major exporting countries 1375.10 Cumulative investment in coal-supply infrastructure by region in the Reference Scenario, 2007-2030 137

Chapter 6. Power sector outlook6.1 Electricity demand growth rates by region in the Reference Scenario 1416.2 Per-capita electricity demand by selected region in the Reference Scenario 1426.3 World electricity generation by fuel in the Reference Scenario 1436.4 Power-generation capacity under construction worldwide 1446.5 Coal-fi red capacity under construction in OECD countries 1456.6 Effi ciency improvements in coal-fi red generation in the Reference Scenario 1466.7 Commodity price indices 1526.8 Electricity generating costs in selected regions 1546.9 Indices of real end-use fuel and electricity prices in OECD 1566.10 European wholesale prices of electricity and EU emission allowances 157

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Chapter 7. Renewable energy outlook7.1 Contribution of biomass to world primary energy demand, 2006 1617.2 Share of total electricity generation from renewables by region in the Reference Scenario 1627.3 Increase in world electricity generation from renewables in the Reference Scenario 1637.4 Increase in OECD electricity generation by energy source in the Reference Scenario 1637.5 Projected generating costs of renewable energy technologies

in the Reference Scenario 1647.6 Projected investment costs of renewable energy technologies

in the Reference Scenario 1657.7 Hydropower capacity under construction by region 1667.8 World biofuels consumption by type in the Reference Scenario 1727.9 World investment in new power-generation plants by fuel in the Reference Scenario 178

Chapter 8. Energy use in cities 8.1 Regional trends in urbanisation 1808.2 World and city primary energy consumption in the Reference Scenario 1848.3 US energy consumption in cities by state, 2006 1868.4 Per-capita energy demand in the European Union and EU cities

in the Reference Scenario 1898.5 Per-capita energy demand and gross regional product in selected Chinese cities, 2006 192

Part B: Oil and gas production prospects

Chapter 9. Turning oil resources into reserves9.1 Hydrocarbon resource classifi cation 1999.2 Estimated remaining world oil reserves, end-2007 2029.3 Proven remaining oil reserves by region, 1980-2007 2039.4 Oil discoveries and production, 1960-2006 2039.5 New fi eld discoveries and reserves growth in 1996-2003 compared with USGS 2000 assessments 2059.6 Global offshore oil discoveries to end-2006 versus exploration wells 2089.7 Maximum water depth of offshore exploration and production wells worldwide 2099.8 A case study of oil reserves growth: the impact of technology on oil production from the Weyburn fi eld in Canada 2109.9 Potential additional recoverable oil resources using CO2-EOR by region 2159.10 Long-term oil-supply cost curve 218

Chapter 10. Field-by-fi eld analysis of oil production10.1 World crude oil production from super-giant and giant fi elds by fi eld vintage 22710.2 Crude oil production by region and size of fi eld, 2007 228

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10.3 Standard oilfi eld-production profi les by category of fi eld 23210.4 Standard oilfi eld-production profi les of giant fi elds 23310.5 Selected production profi les of recently developed medium-sized onshore fi elds compared with the standardised profi le 23410.6 Production-weighted average post-peak and post-plateau observed decline rates by fi eld size 23910.7 Production-weighted average post-peak observed decline rates by type of producer and year of fi rst production 24010.8 Year-on-year change in the production-weighted average production from post-peak fi elds 24210.9 Methodology for estimating natural decline rates 24410.10 Indicative natural decline rates by region 24510.11 Natural decline rates and reserves-to-production ratios by region, 2007 24710.12 Projected change in natural decline rates and reserves-to-production ratios by region, 2007 to 2030 248

Chapter 11. Prospects for oil production11.1 World oil production by source in the Reference Scenario 25011.2 Architecture of the Oil Supply Model 25411.3 Crude oil production from existing fi elds in OPEC and non-OPEC countries in the Reference Scenario 25611.4 Crude oil production decline of existing fi elds by region in the Reference Scenario, 2007-2030 25611.5 World crude oil production from new fi elds in the Reference Scenario 25711.6 Crude oil production from yet-to-be-developed fi elds in OPEC and non-OPEC countries by location in the Reference Scenario 25811.7 Conventional proven and probable crude oil reserves in yet-to-be-developed fi elds by region, end-2007 25811.8 Number of yet-to-be-developed oilfi elds by region and location, end-2007 25911.9 World crude oil production of yet-to-be-found oilfi elds in OPEC and non-OPEC countries by location in the Reference Scenario 26011.10 Enhanced oil recovery by country in the Reference Scenario 26111.11 World natural gas liquids production by OPEC and non-OPEC countries in the Reference Scenario 26111.12 World non-conventional oil production by type in the Reference Scenario 26211.13 Crude oil quality worldwide in the Reference Scenario 26511.14 Change in oil production by country/region, 2007-2030 26611.15 Non-OPEC oil production by type in the Reference Scenario 26811.16 OPEC oil production by type in the Reference Scenario 273

Chapter 12. Natural gas resources and production prospects12.1 Proven reserves of natural gas 28012.2 Regional share in natural gas production and proven reserves, 2007 28112.3 Natural gas discoveries and cumulative production, 1960-2006 281

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12.4 Tight gas drilling in the United States 28512.5 Location of gas-hydrate resources 28912.6 Change in natural gas production by country/region, 2007-2030 29112.7 US natural gas balance 29312.8 Natural gas production in Eastern Europe/Eurasia 296

Chapter 13. Upstream investment prospects13.1 World investment in oil and gas exploration and production 30413.2 Upstream investment of surveyed companies by type of company 30613.3 Upstream oil and gas investment of surveyed companies by activity 30813.4 Investment in oil and gas exploration of surveyed companies 30913.5 Investment in new upstream oil and gas projects, 2008-2015 31013.6 Finding and development costs for US FRS companies 31113.7 Worldwide upstream drilling cost indices 31513.8 Day-rates for drilling rigs 31613.9 Drilling rig day-rates and the average IEA crude oil import price, 1995-2007 31613.10 Average capital cost of upstream projects under development 31713.11 IEA Upstream Investment Cost Index by activity 31813.12 Offshore rigs under construction and effective utilisation rates 31913.13 Year-on-year change in world upstream investment and dollar-cost infl ation rate 32113.14 Indicators of upstream activity 32113.15 Gross peak-oil production capacity additions from current projects by region, 2008-2015 32213.16 Cumulative upstream investment by region in the Reference Scenario, 2007-2030 32413.17 OPEC oil and gas export revenues in the Reference Scenario 32613.18 OPEC countries’ external account price thresholds to balance the external account 32713.19 Demand for and supply of mid-career petrotechnical professionals aged 30 to 39 in North America and Europe 330

Chapter 14. The structure of the upstream industry14.1 World oil and gas reserves and production by company, 2007 33514.2 Foreign company access to proven oil reserves, end-2007 33614.3 Share of national oil and gas companies’ upstream production from overseas assets, 2007 34214.4 Year-on-year increase in oil production of surveyed companies by type of company 34314.5 Net income of the super-majors versus the average IEA crude oil import price, 2000-2007 34414.6 International oil company outlays from operating cash-fl ow 34514.7 International oil company oil and gas reserves replacement ratio 34614.8 Return on average capital employed of the super-majors 347

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14.9 World oil and gas production by type of company in the Reference Scenario 34914.10 Revenue and hydrocarbon production per employee by type of company, 2007 350

Chapter 15. Prospects in oil- and gas-exporting sub-Saharan African countries15.1 Share of oil and gas in total exports and of oil and gas revenues in government revenues in assessed sub-Saharan African countries, 2006 35715.2 Proven oil and gas reserves in assessed sub-Saharan African countries, end-2007 35915.3 Oil and gas production in assessed sub-Saharan African countries 36015.4 Gas fl aring in assessed sub-Saharan African countries 36215.5 Oil and gas supply and infrastructure in sub-Saharan Africa 36315.6 Cumulative government oil and gas revenues in assessed sub-Saharan African countries, 2006-2030 36415.7 Regional power pools in Africa 36815.8 Total additional cost of universal access to electricity and clean cooking stoves in assessed sub-Saharan African countries 371

Part C: The role of energy in climate policy

Chapter 16. Implications of the Reference Scenario for the global climate16.1 Energy-related CO2 emissions in the Reference Scenario by fuel and region 38216.2 Average annual growth in world primary energy demand and energy related CO2 emissions in the Reference Scenario 38416.3 Average annual increase in energy-related CO2 emissions by region in the Reference Scenario 38516.4 Incremental energy-related CO2 emissions by country and region, 2006-2030 38616.5 Ten largest inter-regional fl ows of energy-related CO2 emissions embedded in exports of goods and services, 2006 38816.6 Average annual rate of change in energy-related CO2 emissions per unit of GDP by region, 2006-2030 38916.7 Energy-related CO2 emissions in cities by region in the Reference Scenario 39116.8 Energy-related CO2 emissions from power plants by fuel and region in the Reference Scenario 39216.9 CO2 intensity of power generation by region in the Reference Scenario 39216.10 Change in transport sector CO2 emissions by mode and region in the Reference Scenario, 2006-2030 39416.11 Industry sector energy-related CO2 emissions by region in the Reference Scenario 39516.12 Increase in direct and indirect energy-related CO2 emissions by region in the residential, services and agriculture sectors, 2006-2030 39616.13 World anthropogenic greenhouse-gas emissions by source, 2005 398

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16.14 World anthropogenic greenhouse-gas emissions by source in the Reference Scenario, 2005-2030 40016.15 Total greenhouse-gas emissions other than energy-related CO2

by region in the Reference Scenario 40016.16 Energy-related CO2 emissions in the Reference Scenario to 2030 compared with other published scenarios to 2100 402

Chapter 17. The post-2012 climate policy framework17.1 Potential effects of stabilisation of atmospheric concentrations of greenhouse gases at different levels 41217.2 Energy-related CO2 emissions from existing and future power plants in the Reference Scenario 41317.3 Greenhouse-gas concentration trajectories by scenario 41417.4 Energy-related CO2 emissions in the 550 Policy Scenario and 450 Policy Scenario 41517.5 Regional shares of world energy-related CO2 emissions in the Reference Scenario for different levels of participation, 2020 41717.6 Reduction in world energy-related CO2 emissions in the 450 and 550 Policy Scenarios compared with total OECD emissions in the Reference Scenario in 2030 41817.7 Hybrid policy framework assumed in the 450 and 550 Policy Scenarios 42217.8 Suitability of sectors to sectoral agreements 430

Chapter 18. Climate policy scenarios18.1 Change in electricity prices in OECD+ countries in the 550 Policy Scenario compared with the Reference Scenario 43818.2 Change in primary energy demand in the 550 Policy Scenario relative to the Reference Scenario by fuel and region, 2030 44018.3 Energy-related CO2 emissions reduction by region in the 550 and 450 Policy Scenarios relative to the Reference Scenario 44318.4 Energy-related CO2 emissions by source in the 550 and 450 Policy Scenarios relative to the Reference Scenario 44618.5 Global emissions of all greenhouse gases in the Reference, 550 and 450 Policy Scenarios 44918.6 CO2 emissions per MWh of electricity generated in the 550 Policy Scenario compared with the Reference Scenario 45218.7 Fuel shares in world electricity generation in the Reference and 550 Policy Scenarios 45318.8 Change in coal- and gas-fi red generation by region in the 550 Policy Scenario 45418.9 World non-hydropower renewable electricity generation by source in the 550 Policy Scenario 45518.10 Share of nuclear power in electricity generation by region in the 550 Policy Scenario 45618.11 Energy-related CO2 emissions from industry by region in the Reference and 550 Policy Scenarios 458

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18.12 CO2 intensity improvement in the iron and steel sector and the cement sector by region in the Reference and 550 Policy Scenarios 46018.13 Energy-related CO2 emissions from the iron and steel and non-metallic minerals sectors in the Reference Scenario, 2030 46118.14 CO2 intensity standards of light-duty vehicles by region in the 550 Policy Scenario 46318.15 Change in energy-related CO2 emissions in the buildings and other sectors in the Reference and 550 Policy Scenarios, 2006-2030 46518.16 CO2 emissions reduction from the power sector in the 550 and 450 Policy Scenarios relative to the Reference Scenario 46818.17 World electriticity generation fuel mix in the 450 Policy Scenario relative to the 550 Policy Scenario 46918.18 Electricity generation by fuel and by regional grouping in the 450 Policy Scenario, 2030 47018.19 Shares in world electricity generation by type of coal plant in the Reference, 550 and 450 Policy Scenarios 47118.20 OECD+ net oil and gas imports in the Reference and 550 Policy Scenarios, 2030 47518.21 Percentage reduction in NOx and SO2 emissions by region in the 550 Policy Scenario relative to the Reference Scenario 477

Chapter 19. Implications for energy investment19.1 Change in total world energy-related investments by sector in the 550 Policy Scenario relative to the Reference Scenario, 2010-2030 48119.2 Additional investment in power plants and energy effi ciency by region in the 550 Policy Scenario relative to the Reference Scenario, 2010-2030 48219.3 Investment in the power sector in Other Major Economies and Other Countries in the 550 Policy Scenario and Reference Scenario, 2010-2030 48219.4 Additional investment per capita by private consumers in the 550 Policy Scenario relative to the Reference Scenario, 2010-2030 48319.5 Electricity generating costs in Europe and the United States assuming different carbon prices in the 550 Policy Scenario, 2030 48419.6 Average light-duty vehicle fl eet effi ciency by region, 2006 48619.7 Fuel cost savings by region in the 550 Policy Scenario relative to the Reference Scenario, 2010-2030 48819.8 Change in power plant and energy effi ciency investments in the Policy Scenarios relative to the Reference Scenario 48919.9 Additional energy-related investment by region in the 450 Policy Scenario relative to the Reference Scenario, 2010-2030 49019.10 Additional energy-related investment per private consumer in the 450 Policy Scenario relative to the Reference Scenario, 2021-2030 49019.11 Age distribution of power plants in the OECD+ region, 2006 492

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19.12 Global carbon market trading volumes and values, 2006 and 2007 49619.13 Revenues from full auctioning of CO2 allowances compared with additional investment in the 450 and 550 Policy Scenarios relative to the Reference Scenario, 2013-2030 499

List of tables


Chapter 1. Context and principal assumptions1.1 Major new energy-related policy initiatives adopted between mid-2007 and mid-2008 601.2 Population growth by region 641.3 Real GDP growth by region 661.4 Fossil-fuel price assumptions 68

Chapter 2. Global energy trends2.1 World primary energy demand by fuel in the Reference Scenario 782.2 World primary energy demand by region in the Reference Scenario 812.3 World fi nal energy consumption by sector in the Reference Scenario 842.4 Cumulative investment in energy-supply infrastructure in the

Reference Scenario, 2007-2030 88

Chapter 3. Oil market outlook3.1 World primary oil demand in the Reference Scenario 933.2 Share of transport in primary oil demand by region in the Reference Scenario 993.3 World oil supply in the Reference Scenario 1033.4 Net inter-regional oil trade in the Reference Scenario 106

Chapter 4. Natural gas market outlook4.1 World primary demand for natural gas in the Reference Scenario 1104.2 World natural gas production in the Reference Scenario 1154.3 Net inter-regional natural gas trade in the Reference Scenario 1184.4 Natural gas liquefaction capacity 122

Chapter 5. Coal market outlook5.1 World primary coal demand in the Reference Scenario 1255.2 World coal production in the Reference Scenario 1295.3 Net inter-regional hard coal trade in the Reference Scenario 132

Chapter 6. Power sector outlook6.1 World fi nal electricity consumption by region in the Reference Scenario 1406.2 Nuclear power plants under construction as of end-August 2008 148

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6.3 Recent CCS proposals and developments 1506.4 Projected capacity additions and investment needs in power

infrastructure in the Reference Scenario 1516.5 Factors infl uencing power plant pricing 153

Chapter 7. Renewable energy outlook7.1 Top-ten wind power markets, 2006 1667.2 Final consumption of biofuels by region in the Reference Scenario 172

Chapter 8. Energy use in cities8.1 Overview of city energy use and urbanisation rate in regions

and countries analysed in-depth, 2006 1828.2 World energy demand in cities by fuel in the Reference Scenario 1838.3 US energy demand in cities by fuel in the Reference Scenario 1878.4 European Union energy demand in cities by fuel in the Reference

Scenario 1898.5 Australasian energy demand in cities by fuel in the Reference Scenario 1918.6 Chinese energy demand in cities by fuel in the Reference Scenario 193


Chapter 9. Turning oil resources into reserves9.1 World ultimately recoverable conventional oil and NGL resources, end-2007 2059.2 Estimated 2007 incremental production from EOR projects by technology 2139.3 Pre-screening criteria for EOR 2149.4 Extra-heavy oil and oil sands resources 216

Chapter 10. Field-by-fi eld analysis of oil production 10.1 The world’s 20 biggest oilfi elds by production 22510.2 World crude oil production by output and age of fi eld 22610.3 Geographical distribution of the world’s super-giant and giant oilfi elds 22710.4 Average depletion factor of producing fi elds by size, 2007 22910.5 Initial reserves of oilfi eld dataset for production profi ling 23010.6 Production characteristics of sample oilfi eld dataset for production profi ling 23110.7 Number of oilfi elds in dataset for decline rate calculations 23610.8 Production-weighted average observed decline rates by size and type of fi eld 23810.9 Production-weighted average annual observed decline rates by region 23910.10 Production-weighted average post-peak observed decline rates by vintage 240

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10.11 Production-weighted average annual observed decline rates by decline phase 24110.12 Estimated production-weighted average annual observed post-peak decline rates for all fi elds worldwide by region 24310.13 Average year-on-year decline rates for selected North Sea oilfi elds 246

Chapter 11. Prospects for oil production11.1 World oil production and supply in the Reference Scenario 25111.2 Average size of yet-to-be-developed oilfi elds by region, end-2007 25911.3 Non-OPEC oil production in the Reference Scenario 26711.4 OPEC oil production in the Reference Scenario 27211.5 World cumulative investment in the upstream oil sector under different decline rate assumptions for existing fi elds, 2007-2030 277

Chapter 12. Natural gas resources and production prospects12.1 Remaining proven reserves and mean estimates of ultimately recoverable conventional resources of natural gas, end-2007 28212.2 World proven sour gas reserves, end-2006 28312.3 Enhanced coalbed methane CO2 sequestration potential by country/region 28712.4 Natural gas production in the Reference Scenario 29012.5 Qatari LNG projects 299

Chapter 13. Upstream investment prospects13.1 Companies in investment survey, 2007 30713.2 New upstream oil and gas projects, 2008-2015 31213.3 Cumulative upstream investment by region in the Reference Scenario, 2007-2030 324

Chapter 14. The structure of the upstream industry14.1 Key indicators of leading oil and gas companies, 2007 338

Chapter 15. Prospects in oil- and gas-exporting sub-Saharan African countries15.1 Production and reserves in assessed sub-Saharan African countries 35615.2 Number of people without access to electricity and relying on fuelwood and charcoal for cooking in assessed sub-Saharan African countries 35815.3 Oil production maturity of assessed sub-Saharan African countries, 2007 36015.4 Annual premature death and disability associated with indoor air pollution in assessed sub-Saharan African countries 36615.5 Access to electricity and reliance on fuelwood and charcoal in assessed sub-Saharan African countries 370

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15.6 Cumulative cost of providing universal access to modern energy in assessed sub-Saharan African countries, 2006-2030 374


Chapter 16. Implications of the Reference Scenario for the global climate16.1 Impact of retail-price increases on primary energy demand and energy-related CO2 emissions by region, 2004-2006 38316.2 Energy-related CO2 emissions by region in the Reference Scenario 38516.3 Per-capita energy-related CO2 emissions by region in the Reference Scenario 38916.4 Transport sector energy-related CO2 emissions by region in the Reference Scenario 39316.5 Emissions of major air pollutants by region in the Reference Scenario 405

Chapter 17. The post-2012 climate policy framework17.1 The world’s fi ve biggest emitters of energy-related CO2 41717.2 Change in 2020 of regional energy-related CO2 emissions, under different allocation mechanisms, to achieve a 10% reduction in global emissions relative to the Reference Scenario 42017.3 Existing, announced and proposed emissions-trading systems 42517.4 Examples of city climate-change policy targets 433

Chapter 18. Climate policy scenarios18.1 Macroeconomic cost of mitigation 43718.2 World primary energy demand in the 550 Policy Scenario 43918.3 World primary energy demand in the 450 Policy Scenario 44118.4 Energy-related CO2 emissions by sector and fuel in the 550 and 450 Policy Scenarios 44418.5 Major initiatives to reduce energy-related CO2 emissions in Other Major Economies 44518.6 Electricity generation and related CO2 emissions in the 550 Policy Scenario compared with the Reference Scenario 45118.7 Capacity additions in the 550 Policy Scenario 45618.8 Energy demand and energy-related CO2 emissions in industry in the 550 Policy Scenario 45818.9 Energy demand and energy-related CO2 emissions in transport in the 550 Policy Scenario 46218.10 Energy demand and energy-related CO2 emissions by fuel and region in the buildings and other sectors in the 550 Policy Scenario 46718.11 Power generation and energy-related CO2 emissions in the 450 Policy Scenario, 2030 46818.12 Capacity additions in the 450 Policy Scenario relative to the 550 Policy Scenario, 2020-2030 471

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List of boxes


Chapter 1. Context and principal assumptions1.1 Improvements to the modelling framework in WEO-2008 611.2 Implications of new estimates of purchasing power parity 67

Chapter 2. Global energy trends2.1 How do the new WEO assumptions affect global energy trends compared with last year? 79

Chapter 3. Oil market outlook3.1 The impact on demand of removing oil subsidies 963.2 Averting a post-2010 oil-supply crunch 104

Chapter 4. Natural gas market outlook4.1 Adequacy of gas-supply infrastructure and risks of shortages 116

Chapter 5. Coal market outlook5.1 Alternative energy supplies: underground coal gasifi cation and coal-mine methane 130

Chapter 7. Renewable energy outlook7.1 Land use required to grow biomass for energy 1617.2 Energy storage 169

Chapter 8. Energy use in cities8.1 Methodological issues and city energy data 181


Chapter 9. Turning oil resources into reserves9.1 Defi ning and measuring conventional and non-conventional hydrocarbon reserves in the WEO 2009.2 Proposed new SEC reserve-reporting rules 2019.3 Potential for exploiting Arctic resources 2069.4 Pre-salt deepwater potential in Brazil 2079.5 Deploying EOR: when, how and at what cost? 214

Chapter 10. Field-by-fi eld analysis of oil production10.1 The IEA fi eld-by-fi eld oil production database 22410.2 Oilfi eld production-profi ling methodology 23110.3 How do we defi ne and calculate decline rates? 23510.4 The Ghawar fi eld: the super-giant among super-giants 237

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Chapter 11. Prospects for oil production11.1 Modelling oil production in WEO-2008 252

Chapter 12. Natural gas resources and production prospects12.1 Sour gas reserves: a costly nuisance? 28312.2 CO2-enhanced coalbed methane (ECBM) production: a dual benefi t? 286

Chapter 13. Upstream investment prospects13.1 Approach to assessing the outlook for upstream investment 30513.2 Impact of the credit crunch on upstream fi nancing 30913.3 IEA Upstream Investment Cost Index 318

Chapter 14. The structure of the upstream industry14.1 The rise of the oilfi eld-services companies 341

Chapter 15. Prospects in oil- and gas-exporting sub-Saharan African countries15.1 Gas fl aring: what are the costs? 36115.2 Regional power pools and the Grand Inga project 36715.3 Government programmes to promote the use of clean cooking fuels and rural electrifi cation in Africa: success stories 36915.4 The prospects for renewables to meet rural household energy needs 37215.5 Subsidies: how best to safeguard energy-poor households? 37315.6 Revenue management in Botswana: a success story 375


Chapter 16. Implications of the Reference Scenario for the global climate16.1 Projected energy-related CO2 emissions compared with WEO-2007 38316.2 Global city energy-related CO2 emissions in the Reference Scenario 39016.3 Greenhouse-gas emissions data and projections 397

Chapter 17. The post-2012 climate policy framework17.1 Discerning a stabilisation limit from the IPCC fi ndings 41117.2 Principles for differentiating responsibilities 41917.3 Non-binding targets for non-OECD countries? 42717.4 Carbon leakage and loss of competitiveness 42917.5 Sectoral approaches and the power-generation sector 43117.6 CO2 savings potential of cities 432

Chapter 18. Climate policy scenarios18.1 Outlook for energy-related CO2 emissions to 2050 44718.2 Vintages of capital stock in iron and steel and cement sectors 461

Chapter 19. Implications for energy investment19.1 Stepping up research, development and demonstration to promote climate-friendly technologies 491

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19.2 Shutting down coal-fi red power plants in Ontario, Canada 49319.3 What next for the Clean Development Mechanism? 49719.4 The importance of intellectual property laws for technology diffusion 500

List of spotlights


Chapter 1. Context and principal assumptionsAre speculators to blame for soaring oil prices? 71

Chapter 3. Oil market outlookWhat is the scope for switching from oil-fuelled to electric vehicles? 101

Chapter 4. Natural gas market outlookAre high prices choking off demand for gas? 111

Chapter 6. Power sector outlookWhat are the risks of investing in the power sector? 155

Chapter 7. Renewable energy outlookTo what extent are biofuels driving up the price of food? 173


Chapter 9. Turning oil resources into reservesHow soon — if ever — could oil recovery factors be raised to 50%? 212

Chapter 10. Field-by-fi eld analysis of oil productionWhat do rising decline rates mean for oil production and investment? 223

Chapter 13. Upstream investment prospectsIs strong demand leading to more drilling capacity? 320


Chapter 16. Implications of the Reference Scenario for the global climateHow much of the world’s energy-related CO2 emissions are “embedded”in internationally traded goods and services? 386

Chapter 17. The post-2012 climate policy frameworkWhy is it an absolute “must” for non-OECD countries to play their partin a global climate-change regime? 418

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World Energy Outlook Series

World Energy Outlook 1993World Energy Outlook 1994World Energy Outlook 1995World Energy Outlook 1996World Energy Outlook 1998World Energy Outlook: 1999 Insights Looking at Energy Subsidies: Getting the Prices RightWorld Energy Outlook 2000World Energy Outlook 2001 Insights Assessing Today’s Supplies to Fuel Tomorrow’s GrowthWorld Energy Outlook 2002 World Energy Investment Outlook: 2003 Insights World Energy Outlook 2004World Energy Outlook 2005 Middle East and North Africa InsightsWorld Energy Outlook 2006 World Energy Outlook 2007 China and India Insights World Energy Outlook 2008 World Energy Outlook 2009 (forthcoming)

More information available at www.worldenergyoutlook.org

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PART A L GLOBAL ENERGY TRENDS TO 2030 E O F · Long-term oil-supply cost curve 217 Field-by-field...

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Transcript of PART A L GLOBAL ENERGY TRENDS TO 2030 E O F · Long-term oil-supply cost curve 217 Field-by-field...