© OECD/IEA - 2009

World Energy Outlook 2009

Dr. Fatih BirolIEA Chief EconomistRome, 18 November 2009

© OECD/IEA - 2009

Change in primary energy demandin the Reference Scenario, 2007-2030

Fossil fuels account for 77% of the increase in world primary energy demand in 2007-2030, with oil demand rising from 85 mb/d in 2008 to 88 mb/d in 2015 & 105 mb/d in 2030

- 500 0 500 1 000 1 500 2 000

Other renewables

Biomass

Hydro

Nuclear

Gas

Oil

Coal

Mtoe

OECD

Non-OECD

© OECD/IEA - 2009

Worldwide upstream oil & gas capital expenditures

Global upstream spending (excluding acquisitions) is budgeted to fall by over $90 billion, or 19%, in 2009 – the first fall in a decade

0

100

200

300

400

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Billion

dolla

rs

* Budgeted spending

© OECD/IEA - 2009

Oil productionin the Reference Scenario

Sustained investment is needed mainly to combat the decline in output at existing fields, which will drop by almost two-thirds by 2030

NGLs

Unconventional oil

Crude oil – fields yet to be developed

or found

Crude oil – currently producing fields

0

20

40

60

80

100

120

2000 2008 2030

mb

/d

© OECD/IEA - 2009

Impact of decline on world natural gas productionin the Reference Scenario

Additional capacity of around 2 700 bcm, or 4 times current Russian capacity, is needed by 2030 – half to offset decline at existing fields & half to meet the increase in demand

0

1

2

3

4

5

2007 2015 2020 2025 2030

tcm Fields yet to be developed or found

Currently producing fields

0%

20%

40%

60%

80%

100%

Share from fields not yet producing

(right axis)

© OECD/IEA - 2009

US natural gas supply in the Reference Scenario

Thanks mainly to shale gas, US gas output grows gradually through to 2030,outstripping demand & squeezing imports

0

100

200

300

400

500

600

700

1990 1995 2000 2005 2008 2015 2020 2025 2030

bcm Net imports

Conventional

Unconventional

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Natural gas transportation capacity

A glut of gas is developing – reaching 200 bcm by 2015 – due to weaker than expected demand & plentiful US unconventional supply, with far-reaching implications for gas pricing

0

100

200

300

400

500

600

700

800

2007 2015

bcm Unutilised LNG liquefaction

& pipeline capacity

LNG trade

Pipeline trade

73%

% Capacity utilisation rate

88%

© OECD/IEA - 2009

Indicative costs for potential new sources of gas delivered to Europe, 2020 ($/MBtu)

Although indigenous resources are limited & output is declining, Europe isgeographically well placed to secure gas supplies from a variety of external sources

© OECD/IEA - 2009

Average annual expenditure on net imports of oil & gas in the Reference Scenario

The Reference Scenario implies persistently high spending on oil & gas imports, with China overtaking the United States by around 2025 to become the world's biggest spender

0

100

200

300

400

500

600

European

Union

United

States

China Japan India ASEAN

Billion d

ollars

(2008)

1971-2008

2008-2030

1%1%

1%

2%

3%

% Share of GDP

2%

2%

3%

3% 6%

3%

0.4%

© OECD/IEA - 2009

Number of people without access to electricityin the Reference Scenario (millions)

$35 billion per year more investment than in the Reference Scenario would be needed to 2030 – equivalent to just 5% of global power-sector investment – to ensure universal access

World population withoutaccess to electricity

2008: 1.5 billion people2030: 1.3 billion people

© OECD/IEA - 2009

The policy mechanismsin the 450 Scenario

A combination of policy mechanisms, which best reflects nations’ varied circumstances & negotiating positions

We differentiate on the basis of three country groupings> OECD+: OECD & other non-OECD EU countries

> Other Major Economies (OME): Brazil, China, Middle East, Russia & South Africa

> Other Countries (OC): all other countries, including India

A graduated approach> Up to 2020, only OECD+ have national emissions caps

> After 2020, Other Major Economies are also assumed to adopt emissions caps

> Through to 2030, Other Countries continue to focus on national measures

Emissions peaking by 2020 will require> A CO2 price of $50 per tonne for power generation & industry in OECD+

> Investment needs in non-OECD countries of $200 billion in 2020, supported by OECD+ through carbon markets & co-financing

© OECD/IEA - 2009

World primary energy demand by fuel in the 450 Scenario

In the 450 Scenario, demand for fossil fuels peaks by 2020, and by 2030 zero-carbon fuels make up a third of the world's primary sources of energy demand

0

2 000

4 000

6 000

8 000

10 000

12 000

1990 2000 2010 2020 2030

Mto

e

0%

6%

12%

18%

24%

30%

36% Fossil fuels

Zero-carbon fuels

Share of zero- carbon fuels

(right axis)

© OECD/IEA - 2009

Cumulative OPEC oil export revenuesby scenario

Though slightly lower than in the Reference Scenario, OPEC revenues in the 450 Scenario are over four times as high as in the last 20 years

0

4

8

12

16

20

24

28

1985-2007

Reference Scenario 450 Scenario

2008-2030

Trillion

dolla

rs (2

00

8)

© OECD/IEA - 2009

EU primary natural gas imports by scenario

EU gas imports continue to grow in the 450 Scenario, but plateaus by around mid-2020s

+65% (204 bcm)

+37% (116 bcm)

0

100

200

300

400

500

600

2007 2015 2020 2025 2030

Bcm Reference Scenario

450 Scenario

© OECD/IEA - 2009

World abatement of energy-related CO2 emissionsin the 450 Scenario

An additional $10.5 trillion of investment is needed in total in the 450 Scenario, with measures to boost energy efficiency accounting for most of the abatement through to 2030

26

28

30

32

34

36

38

40

42

2007 2010 2015 2020 2025 2030

Gt

450 Scenario

Reference Scenario

OECD+

OME

OC

CCS - 10%

Nuclear - 10%

Renewables & biofuels - 23%

Efficiency - 57%

World abatement by technology, 2030

3.8 Gt

13.8 Gt

© OECD/IEA - 2009

Abatement in the 450 Scenario by key emitters, 2020

China, the United States, the European Union & India account for almost70% of the 3.8 Gt reduction in the 450 Scenario

0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

China United

States

European

Union

India

Gt

CDM

Cap & trade in power

& industry sectors

International sectoral standards

in transport & industry

National policies

© OECD/IEA - 2009

Incremental EU electricity productionby scenario, 2007-2030

Renewables, nuclear and plants fitted with CCS account for 80% of electricity generation in EU in 2030 in the 450 Scenario, up from 44% today

- 800

- 600

- 400

- 200

0

200

400

600

800

TWh

Reference Scenario

450 Scenario

Coal Gas Oil Nuclear Hydro Wind Biomass Solar Other

renewables

© OECD/IEA - 2009

European Union passenger vehicle sales & average new vehicle CO2 intensity in the 450 Scenario

170

100

70

0%

20%

40%

60%

80%

100%

2007 2020 2030

0

50

100

150

200

250

Gra

mm

es

per

kilo

metr

e Electric vehicles

Plug-in hybrids

Hybrid vehicles

ICE vehicles

CO2 intensity (right axis)

The already strong policy action to reduce CO2 emissions in EU road transport must be further strengthened in order to reach a 450 trajectory.

© OECD/IEA - 2009

Summary & conclusions

The financial crisis has halted the rise in global fossil-energy use, but its long-term upward path will resume soon on current policies

Tackling climate change & enhancing energy security require a massive decarbonisation of the energy system

> We are now on course for a 6°C temperature rise & rising energy costs

> Limiting temperature rise to 2°C will require big emission reductions

in all regions

A 450 path towards ‘Green Growth’ would bring substantial benefits

> Avoiding the worst effects & costs of climate change

> Energy-security benefits, lower oil & gas imports bills

> Much less air pollution & huge health benefits

Natural gas can play a key role as a bridge to a cleaner energy future

The challenge is enormous – but it can and must be met

> Improved energy efficiency & technology deployment are critical

> Each year of delay adds $500 billion to mitigation costs