IEEJ: November 2009

Northeast Asia Petroleum Forum 2009

Recent Energy Oulooks:
A review of four outlooks
Tokyo, JapanOct., 2009
Yonghun Jung, Ph.D
Executive Director, Energy Policy Research CenterKEEI1

IEEJ: November 2009

Stylized facts• Uncertain future of energy world– Financial Crisis: when will the global economy turn around– GHG mitigation: Copenhagen outcome?

• Unknown impacts on energy of:– Urbanization– Aging– Cost-of-carbon policies• Unpredictable factors– Technological innovation/breakthrough– Political instability– Natural disasters• There are four reports so far:
– EIA, IEA, ExxonMobile, Conoco-phillips

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IEEJ: November 2009

IEA outlook 2009
• Focus is on the carbon constrained world– 450 ppm scenario– “A wholesale transformation of the way we produce anduse energy• By 2030– 1/3 of the TPES will be zero-carbon fuels– 2/3 of the required reduction in 2020 comes from efficiency
measures– More reduction ‘required’ from non-OECD: financing issue– 10 trillion of additional investment required• 0.5% of GDP in 2020, 1.1% of GDP in 2030

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IEEJ: November 2009

Understanding IEA’s• IEA’s BAU is “surprisingly” identical to EIA’s – a long armof coincidence?
– In 2030 the 40 billion ton of CO2 (40 giga ton in EIA)
• A series of numbers that cannot be verified– Reduction in energy bills by 8.6 trillion dollars• What is a “wholesale transformation”?
• It is not known what is the criteria for the selection ofmeasures: minimum cost?
• How did they build their scenario: A recursive approach?
• No mention of “prices”: drivers? Cost of carbon?
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IEEJ: November 2009

EIA outlook• Worldwide energy consumption will increase by 44%
between 2006 and 2030
– Non-OECD countries accounts for 82% of the incremental• Oil price will rise to $130/bbl in 2030
• Unconventional liquids will meet ½ of the incremental
liquid growth• Despite the fast growth of NRE, fossil fuels will shareover 80% of commercial energy in 2030
• Unconventional sources would provide about ½ of thegrowth in global liquids• OPEC’s share in conventional energy production will rise5

IEEJ: November 2009

ExxonMobile• By 2030– Energy consumption will increase by 35%• APEC developing countries will use more energy– Oil will remain the largest source of energy supply at 34% (40%growth)• Transport is one of the fastest growing sectors– Power generation is the largest and the fastest growing segmentof global energy demand, sharing 40% of the world total• Coal , natural gas, nuclear will share about 30% each with 10% ofNRE– Natural gas will overtake coal as the second-biggest global
fuel source• APEC demand will grow 150% by 2030

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IEEJ: November 2009

ExxonMobile continued• Brazil kazakhstan, and other non-opec will offset thedecline of the mature fields in the united states and thenorth sea• The resource base is enogh through 2030 and beyond,but the call for OPEC will increase to 45 ~50 MBDOE.
• The global liquid will grow from 84 MBDOE to 108
MBDOE in 2030
• Wind, solar, and biofuels will grow at 9.3% per year but
site avaialability will limit the growth• Cost-of-carbon polices will increase elec. tariffs

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IEEJ: November 2009

Conoco-Phillips• Focusing on oil– In the short-run, dampened demand with high sparecapacity and high inventory will keep oil price low– Demand will rebound to put pressure on price in themid-term• 25% increase from 2007 to 2030 at $110/bbl– Conventional non-opec crude production has peaked• OPEC share will increase– Natural gas demand will rise with the supportive
policies: Transition to a low carbon economy

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IEEJ: November 2009

What are missing?
• Common understanding: Models are an
abstract, and extremely simplified world – nopreaching warranted• Positive approach;“value judgment” – not asound rationale for the projection– “Devils are in details”• Market structure, industrial organization, regulations• Reflections on the past: Previous outlooks

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IEEJ: November 2009

Likely Scenario• Reality check– Politically infeasible solutions: climate change– Technological progress: slow maybe– Who make decisions: stakeholders?

• Extension of the status quo– Market mechanism will prevail– Closer to BAUs
Contact : report@tky.ieej.or.jp
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