Tanaka EU seminar on security By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies

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Transcript of Tanaka EU seminar on security By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies

  • Energy Security in the UncertainEnergy Security in the Uncertain  Energy WorldEnergy World Implications of IEA’s WEO 2011

    December 2 , 2011

    EU Energy Security SeminarEU Energy Security Seminar Nobuo TANAKA Former Executive Director of the IEA Global Associate of Energy Security and Sustainability IEEJ

    © OECD/IEA 2011 

    Global Associate of Energy Security and Sustainability, IEEJ

  • The context: A time of unprecedented  uncertainty…u ce a y

    Is Euro zone crisis becoming  global crisis ? 

    Growing Asian economies will shape the global energy future – where will their policy decisions lead us ? 

    More volatile Oil market? – MENA turmoil raised questions about  region’s investment plans.

    Natural gas markets are in the midst of a revolution – a golden era  for gas? 

    Climate Change Mitigation, Fossil Fuel Subsidy Phase Out by G20– do they go far enough & will they be implemented ? 

    What is the implication of Fukushima Nuclear accident to the global  energy landscape?

    2

  • Emerging economies continue  t d i l b l d dto drive global energy demand

    IEA WEO 2011 Growth in primary energy demand 

    4 000

    4 500

    M to e

    China

    IEA WEO 2011

    3 000

    3 500

    4 000M China

    India

    Other developing Asia

    1 500

    2 000

    2 500 Russia

    Middle East

    Rest of world

    500

    1 000

    1 500 OECD

    0 2010 2015 2020 2025 2030 2035

    Global energy demand increases by one‐third from 2010 to 2035,  with China & India accounting for 50% of the growth 

    3

  • Primary Energy Demand by Region (World) Reference

    7 000

    8,000 Mtoe

    AAGR* ’80 ’09

    2009 11.2 bil. toe

    World 7.6 bil. toeIEEJ Outlook 2011

    6,000

    7,000

    Asia

    ’80- ’09

    ’09- ’35

    World 1.8% 1.7%

    ↓ 2035

    17.3 bil. toe (1.5-fold increase)

    4,000

    5,000 Asia 4.6% 2.6% N. America 0.7% 0.4%

    (1.5 fold increase)

    Asia 2009

    3 9 bil toe 3.9 bil. toe

    3,000 N.Amerca

    OECD E

    3.9 bil. toe ↓

    2035 7.6 bil. toe

    (1 9 f ld i )

    *Average annual growth rate

    1,000

    2,000 OECD Europe Non-OECD Europe L. America

    Middle East Africa

    (1.9-fold increase)

    0

    19 71

    19 80

    19 90

    20 00

    20 09

    20 20

    20 30

    20 35

    Africa

    Oceania

    1 1 1 2 2 2 2 2

    By 2035, primary energy demand of Asia will double from the current level, reflecting high economic growth; 3.9 billion toe(2009) → 7.6 billion toe(2035).

    Non-OECD will represent 90% of incremental growth of global energy demand toward 2035. 4

  • Oil demand is driven higher  b i hiby soaring car ownership

    IEA WEO 2011 Vehicles per 1000 people in selected markets

    2010 800

    2035

    500

    600

    700

    300

    400

    500

    100

    200

    0 United States European

    Union China India Middle East

    The passenger vehicle fleet doubles to 1.7 billion in 2035; most cars are sold  outside the OECD by 2020, making non‐OECD policies key to global oil demand

    5

  • Changing oil import needs are set toChanging oil import needs are set to hift b t il ithift b t il itshift concerns about oil securityshift concerns about oil security

    IEA WEO 2011 Net imports of oil

    14

    m b/ d

    2000

    IEA WEO 2011

    10

    12m

    2010

    2035

    6

    8 2035

    2

    4

    0

    China India European Union

    United States

    Japan

    US 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

    6

  • What impact would dWhat impact would deferred eferred  investment in MENA have on markets?investment in MENA have on markets?investment in MENA have on markets?  investment in MENA have on markets?  

    i l h b lk f h h i il

    IEA WEO 2011

    MENA is set to supply the bulk of the growth in oil output to 2035, requiring investment of over $100 billion/annum

    ‘Deferred Investment Case’ looks at near‐term investment  falling short by one‐third

    possible drivers include new spending priorities, higher perceived risks

    MENA t t f ll 3 4 b/d b 2015 d 6 2 b/d b 2020MENA output falls 3.4 mb/d by 2015 and 6.2 mb/d by 2020

    Consumers face a near‐term rise in oil prices to $150/barrel

    MENA earns more initially, but then less as market share is lost

    7

  • d f i d i il l di id f i d i il l di i Petroleum Supply Security as Energy Security of the 20 C

    Need for cooperation during oil supply disruptionsNeed for cooperation during oil supply disruptions

    IEA stockholding cover of global oil demandIEA stockholding cover of global oil demand

    35 

    40 

    50%

    60%

    20

    25 

    30 

    30%

    40%

    l d em

    an d  co ve r

    rl d  oi l d

    em an d

    10 

    15 

    20 

    20%

    30%

    da ys  o f  w or ld  o i

    %  sh

    ar e  of  w

    or

    0%

    10%

    IEA 90 days of stockholding, share of world demand  with China with India with ASEAN

    Growing share of non‐OECD oil demand results in declining global demand  cover from IEA oil stocks

    Share of non‐OECD  in global oil demand

    8

  • Natural gas & renewables become  i i l i t tincreasingly important

    IEA WEO 2011 World primary energy demand

    Additional 5 000to e

    IEA WEO 2011

    to 2035

    2010 4 000

    M t

    2 000

    3 000

    1 000

    0 Oil Coal Gas Renewables Nuclear

    Renewables & natural gas collectively meet almost two‐thirds  of incremental energy demand in 2010‐2035

    9

  • Golden prospects for natural gasGolden prospects for natural gasGolden prospects for natural gasGolden prospects for natural gas IEA WEO 2011

    Largest natural gas producers in 2035

    U it d St t

    Russia Conventional

    IEA WEO 2011

    Iran

    China

    United States Unconventional

    Algeria

    Canada

    Qatar

    Norway

    India

    Australia

    g

    0 200 400 600 800 1 000

    Norway

    bcm

    Unconventional natural gas supplies 40% of the 1.7 tcm increase in global supply, but best practices are essential to successfully address environmental challenges

    10

  • Coal won the energy race in the Coal won the energy race in the  fi t d d f th 21 t tfi t d d f th 21 t tfirst decade of the 21st centuryfirst decade of the 21st century

    IEA WEO 2011 Growth in global energy demand, 2000‐2010

    1 600

    to e

    Nuclear

    1 000

    1 200

    1 400M t

    Renewables

    600

    800

    1 000

    Oil

    200

    400 Natural gas

    0

    CoalTotal non‐coal

    Coal accounted for nearly half of the increase in global energy use over the past decade, with the bulk of the growth coming from the power sector in emerging economies 

    11

  • Power investment focuses on  l b t h l ilow‐carbon technologies

    IEA WEO 2011 Share of new power generation and investment, 2011‐2035

    40% Generation

    25%

    30%

    35% Investment

    15%

    20%

    25%

    5%

    10%

    15%

    0% Coal Gas Nuclear Hydro Wind Solar PV

    Renewables are often capital‐intensive, representing 60% of investment for 30% of  additional generation, but bring environmental benefits & have minimal fuel costs

    12

  • The overall value of subsidiesThe overall value of subsidies t bl i t t it bl i t t ito renewables is set to riseto renewables is set to rise

    IEA WEO 2011

    Biofuels 250

    20 10 )

    IEA WEO 2011

    Electricity200

    on  d ol la rs  (2

    100

    150

    Bi lli o

    50

    0

    2007 2008 2009 2010 2015 2020 2025 2030 2035

    Renewable subsidies of $66 billion in 2010 (compared with $409 billion for fossil fuels), need to  climb to $250 billion in 2035 as rising deployment outweighs improved competitiveness

    13

  • Russia remains a cornerstone Russia remains a cornerstone  f th l b lf th l b lof the global energy economyof the global energy economy

    IEA WEO 2011 Russian revenue from fossil fuel exports

    2010 $255 billion

    2035 $420 billion

    Other

    21% European Union

    17%

    China European UnionOther

    Ch