# Presentation: 916612

## Energy Security and Asia

- Dr. Mark Rodekohr
- January 2005
- South Asian Regional Initiative – Energy

## Organization

- Security Overview
- Short-Term World Outlook
-  Mid-Term Outlook
-  Conclusions

## World Oil Supply Disruptions 1951 - Present

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## West Texas Intermediate Crude Oil Price(Base Case and 95% Confidence Interval*)

**The confidence intervals show  +/- 2 standard errors based on the properties of the model.  The ranges do not include the effects of major supply disruptions.*

**Short-Term Energy Outlook, November 2004**

##  U.S. Crude Oil Stocks (min/max)

**Short-Term Energy Outlook, November 2004**

## OECD* Commercial Oil Stocks

**Short-Term Energy Outlook, November 2004**

- *Organization for Economic Cooperation and Development

## World Oil Demand Growth   (Change from Year Ago)

**World Oil Demand Growth****   ****(Change from Year Ago)**

**1.6%**

**3.5%**

**2.4%**

**Short-Term Energy Outlook, November 2004**

## International Energy Outlook 2004 indicates that over the next two decades...

- Energy use will grow strongly, especially among the developing countries (2.7% per year in the developing world)
- The developing world accounts for 58% of the growth in world energy demand between 2001 and 2025
- Developing Asia will account for 70% of the overall growth in the developing world’s energy use and 40% of worldwide growth.
- There will be continued reliance on fossil fuels through 2025; oil remains the dominant fuel type (39% of total world energy use)
- Natural gas is the fastest growing source of primary energy (2.2% per year)
- Coal will continue to be the predominant source for electricity generation, but natural gas will be an important supply source for power generation in many parts of the world, given its efficiency and environmental benefits.

## World Gross Domestic Product in Three Economic Growth Cases, 1970-2025

## World Population by Region, 1970-2025

- World Population by Region, 1970-2025

## World Marketed Energy Consumption in Three Economic Growth Cases, 1970-2025

- 710

- 623

- 542

## Energy Intensity by Region, 1970-2025

- Source:  EIA, *International Energy Outlook 2004*

## World Marketed Energy Consumption by Region, 1970-2025

- World Marketed Energy Consumption by Region, 1970-2025

## Energy Consumption in the Developing World, 1970-2025

- Energy Consumption in the Developing World, 1970-2025

## World Energy Use per Capita by Region, 1970-2025

- World Energy Use per Capita by Region, 1970-2025

## World Primary Energy Consumption by Fuel Type, 1970-2025

- Share of
- World
- Total

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## Developing World Primary Energy Consumption by Fuel Type, 1970-2025

- Share of
- Developing
- World
- Total

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| --- | --- |

## World Oil Consumption by Region, 2001, 2010, and 2025

## World Oil Reserves by Country, as of January 1, 2004

- Source:  "Worldwide Look at Reserves and Production."*Oil & Gas Journal*,
- Vol. 100, No. 49 (December 22, 2003), pp. 46-47.

## World Natural Gas Reserves by Region, as of January 1, 2004

*Vol. 100, No. 49, December 22, 2003, pp. 46-47*

## World Net Electricity Consumption by Region, 2001-2025

## Shares of Energy Use for Electricity Generation, 2001-2025

- Source:  EIA, *International Energy Outlook 2004*

## World Energy-Related Carbon Dioxide Emissions by Region, 1990-2025

- World Energy-Related Carbon Dioxide Emissions by Region, 1990-2025

## Key issues for energy and the developing world:

- Extensive investment will be required to expand the energy infrastructure
- Markets will be created for new technologies
- Geopolitical implications
- Environmental issues
- New opportunities for trade

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## Conclusions - I

-  In the near term and longer term oil will remain the dominate source of energy for Asia.
-  More price volatility can be expected in the near and longer term.
-  The price volatility can be expected to have significant policy implications for Asian economies especially if price controls for certain petroleum products remain in effect.

## Conclusions - II

- Some Asian countries (India and China) are considerin the establishment of Strategic Petroleum Reserves.
- The use of these reserves could be coordinated with the IEA countries to insure an effective response to supply disruptions.
- Policy changes should also be considered in response to the likelihood of increased petroleum price volatility.
- Even smaller Asian countries can be heavily impacted by sharp increases in petroleum prices depending on their internal pricing schemes.
- Natural gas could also become an issue in the future as this market becomes more international in character.  Supplies of this fuel are also concentrated in certain countries and regions that could be affected by international events.

## Appendix : Supply Disruption Details

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