Economic growth

Economic growth is by far the most important determinant of the overall demand for energy services. The pattern of economic development also affects the fuel mix. As a result, the energy projections in the Outlook are highly sensitive to underlying assumptions about rates and patterns of economic growth. Extremely rapid economic expansion in many countries outside the OECD - especially in Asia - is the main reason why energy demand has accelerated in recent years. Nonetheless, over the long...

Coalbed methane

The majority of the world's coal resources, estimated at 86 to 283 tcm (Creedy and Tilley, 2003), are found at depths where coal cannot be mined. Coalbed methane is the methane contained in coalbeds that, due to the deposit's depth or the coal's poor quality, cannot be mined. In operating coal mines, methane gas is generally considered to be a hazard, as well as creating an environmental problem if vented to cc 5. An accumulation that is pervasive through a large and continuous area. Figure...

Eastern Europe Eurasia

Russia has 48 tcm of proven gas reserves, one-quarter of the world total and the largest share of any country. The USGS estimates undiscovered recoverable conventional resources, not including reserves growth, at 80 tcm, including an estimated 37 tcm located north of the Arctic Circle (USGS, 2000 and 2008). Russia is the world's largest natural gas producer and exporter, and is the second-largest natural gas consumer after the United States. Russian exports meet almost a quarter 8 of OECD...

Renewables for electricity

Renewables-based electricity generation is expected to grow substantially over the coming decades, benefiting from high fossil-fuel prices, declining investment costs and government support. In the Reference Scenario, world renewable electricity generation is projected to increase from 3 470 TWh in 2006 to 4 970 TWh in 2015 and to 7 705 TWh in 2030. Before 2015, electricity from renewable energy sources is projected to overtake gas as the world's second-largest source of electricity behind...

Global trends in the use of renewable energy

The use of renewable energy sources has been expanding rapidly in recent years and this trend is set to continue over the projection period. Investment in renewable energy sources for electricity, heating and in biofuels has increased considerably. However, if traditional biomass is excluded,1 renewable energy still accounts for a small share of the energy mix. In 2006 it met just 7 of global primary energy needs. The share was around 6 for heat demand (mostly from the direct combustion of...

Trends in CO capture and storage

Carbon capture and storage (CCS) is a promising technology for carbon abatement, even though it has not yet been applied to large-scale power generation. Widespread deployment of CCS depends on developments in legal and regulatory frameworks, financing mechanisms, international co-operation, technological advances and public awareness. Recommendations on how to accelerate the deployment of CCS were developed in 2007 under a joint International Energy Agency-Carbon Sequestration Leadership Forum...

Trends in renewable energy

Higher fossil-fuel prices and increasing concerns over energy security and climate change are expected to encourage the development of renewable energy for electricity production in many parts of the world, particularly where incentives are already in place. Electricity generated from renewable energy sources worldwide amounted to 3 470 TWh in 2006, or 18 of total output. In the Reference Scenario, it rises to 4 970 TWh in 2015 and to over 7 700 TWh in 2030, 23 of total electricity production....

Trends in nuclear power

World nuclear capacity reached 368 GW in 2006. This rose to 372 GW in 2007. About 309 GW of this capacity was in OECD countries. Between 2000 and 2007, about 31 GW of new capacity were added worldwide.5 In the OECD, new reactors started commercial operation in the Czech Republic, France, Japan, Slovakia and South Korea. Outside the OECD, new reactors were brought on line in Brazil, China, India, Pakistan, Romania, Russia and Ukraine. A total of 8 GW was shut down during the same period in...

Production

The proximity of reserves to markets and the level of production costs will continue to drive regional prospects for gas supply. Gas transportation, whether by pipeline or as liquefied natural gas (LNG), remains very expensive and usually represents a significant share of the overall cost of gas delivered to consumers. A substantial part of the world's gas resources is located far from the main centres of demand and cannot yet be extracted profitably. Those resources are unquestionably large...

Are high prices choking off demand for gas

The scope for gas consumers to reduce their consumption of gas in the face of high prices varies by region and by sector. Most residential consumers have little option but to pay the higher cost, as they rarely have any back up for space and water heating, and for cooking. Moreover, switching to an alternative fuel when installing new equipment may not be attractive since heating oil and electricity prices have also risen in most cases. But some gas-fired power plants and industrial boilers can...

Strengthening strategic partnerships

Partnerships between the national and international companies provide one important means of securing the financial, technical and management resources required to develop national company reserves. The mutual benefits that could accrue are compelling the national companies control most of the world's remaining reserves, but some lack the technology and skilled personnel to do much more than simply maintain existing producing assets the international companies are opportunity-constrained, but...

Box The rise of the oilfieldservices companies

Oilfield-services companies provide a range of services related to oil and gas exploration and production, but do not typically produce petroleum themselves. These services include seismic data acquisition, processing and analysis, well drilling, completion, evaluation and stimulation, and production-related services (well monitoring, production maintenance, flow assurance and enhanced recovery technologies). In addition, oil companies increasingly sub-contract their information technology and...

Nonconventional gas

Non-conventional gas embraces a set of gas resources that are generally contiguous in nature, sometimes referred to as resource plays in the industry, that require special drilling and stimulation techniques to release the gas from the formations in which they occur. Non-conventional gas includes coalbed methane, tight gas sands and gas shales. Such resources are widespread worldwide, but their development has generally been limited so far to North America. Determining the amount of gas in...

Investment in renewable energy

In the Reference Scenario, total cumulative investment in modern forms of renewable energy in the period 2007 to 2030 amounts to 5.5 trillion in year-2007 dollars . Most of the investment in renewables - 60 of the total - is for electricity generation, followed by investment in renewables for heat and biofuels, which account for 36 and 4 of the total, respectively. Total investment in renewables for electricity generation in the Reference Scenario from 2007 to 2030 amounts to 3.3 trillion this...

Industry

In the 450 Policy Scenario, the industry sector in OECD faces a much higher CO2 price after 2020 than in the 550 Policy Scenario. Energy-related CO2 emissions from the industry sector in Other Major Economies are also limited by a carbon price, due to the cap-and-trade system introduced after 2020. Other Countries are assumed to implement the same national policies and measures as in the 550 Policy Scenario, but they benefit from the faster deployment of technology worldwide in the 450 Policy...

Part A Global energy trends to

Context and principal assumptions 1.1 1.2 Energy subsidies in non-OECD countries, 2007 Rate of growth of per-capita income by region Assumed natural gas and coal prices relative to crude oil Typical lifetimes of energy-related capital stock 2.1 World primary energy demand by fuel in the Reference Scenario 2.2 World primary energy demand by region in the Reference Scenario 2.3 Incremental primary energy demand by fuel in the Reference Scenario, 2006-2030 2.4 Per-capita primary energy...

Power generation

In the 550 Policy Scenario, OECD countries are assumed to implement policies to encourage the deployment of low-carbon technologies in the power-generation sector, in addition to a cap-and-trade system. Cap-and-trade arrangements are already in place or are being considered in most OECD countries. Such explicit pricing of carbon makes renewables, nuclear and CCS technologies more competitive against fossil-fuel based electricity generation. But in OECD countries, successful deployment of...

IllII II

As a result of the assumed tighter emissions cap in OECD , the carbon price faced by the power sector over 2020-2030 is higher than in the 550 Policy Scenario over the same period. This price, which reaches 180 per tonne of CO2 by 2030 makes renewables, nuclear and CCS technologies more competitive against basic fossil-fuel electricity generation and favours faster deployment of these technologies. Economic incentives are assumed to be supplemented by tighter regulatory requirements, leading to...

International oil companies in profitable retreat

The international oil companies, which have traditionally dominated the global oil and gas industry, are increasingly being squeezed by the growing power of the national companies and by dwindling reserves and production in mature basins outside OPEC countries. Their recent record profits and robust balance sheets mask increasing difficulties in acquiring new upstream assets and expanding production in the long term. Indeed, the five super-majors - ExxonMobil, Shell, BP, Total and Chevron -...

Ultimately recoverable resources

Reserves estimates give an indication of how much oil could be developed and produced in the near to medium term. The total volume of oil which might ultimately be produced commercially is known as ultimately recoverable resources. This category includes oil initial proven and probable reserves from discovered fields including oil already produced , both in production and yet to be developed, reserves growth see below and hydrocarbons that are yet to be found. From a larger resource base, more...

OECD Europe

European gas production peaked in 2004 at close to 330 bcm and is now in long-term decline. Continued growth in Norway has not been sufficient to offset a rapid decline in output in the United Kingdom, for many years Europe's largest producer, despite a recent surge in drilling for gas in the North Sea. In aggregate, production in OECD Europe in the Reference Scenario is projected to decline steadily from 305 bcm in 2006 to 282 bcm in 2015 and 217 bcm in 2030 - a fall of one-third on current...

Buildings and other sectors

Worldwide, direct emissions from fossil-fuel consumption mainly for heating in the residential, services and agriculture sector called here buildings and other sectors grow at 0.2 per year on average between 2006 and 2030 in the 550 Policy Scenario, compared with a 0.8 growth rate in the Reference Scenario. If we attribute the CO2 emissions from upstream power generation to this sector as a whole, according to its electricity use, CO2 emissions at world level grow by 0.4 per year from 2006 to...

Figure Finding and development costs for Us Frs companies

Former Soviet Union Middle East US onshore Other Eastern Hemisphere US average Worldwide Canada Europe Africa Other Western Hemisphere US offshore 0 10 20 30 40 50 60 70 Dollars 2006 per barrel of oil equivalent Note FRS is Financial Reporting System. Three-year weighted averages of exploration and development expenditures excluding expenditures for proven acreage , divided by reserve additions excluding net purchases of reserves . Natural gas is converted to equivalent barrels of oil at 178.1...

Figure Oilimport dependence by major importing region in the Reference Scenario

OECD North America United States China Other Asia OECD Europe OECD Pacific European Union India 20 30 40 50 60 70 80 90 100 Increased trade consolidates global interdependence, but the risk to consuming countries of short-term supply interruptions grows as geographic supply diversity is actually reduced, increasing reliance on a few supply routes. Much of the additional oil imports will come from the Middle East, the scene of most of the biggest supply disruptions in the past, and will transit...

Investment implications of the Policy Scenario

The 450 Policy Scenario requires additional investment of 3.6 trillion in power plants and 5.7 trillion in energy efficiency over the period 2010-2030 relative to the Reference Scenario.7 This additional investment is much higher in the period g 7. Investment in biofuels in 2010-2030 is 127 billion higher than in the Reference Scenario. 2021-2030 than in the period 2010-2020 Figure 19.8 . In the 450 Policy Scenario, substantially higher investment is needed in power plants. Post-2020, this...

Box Projected energyrelated CO emissions compared with WEO

Energy-related CO2 emissions are 3.2 lower in 2030 than projected in last year's WEO, due to significantly lower consumption of fossil fuels, mainly oil. Our higher price assumptions for fossil fuels, again notably oil, stimulate more energy conservation and faster uptake of more efficient end-use technologies. They also promote faster deployment of low-carbon supply-side technologies, such as renewables and nuclear power. In addition, a number of new government policies and measures have been...

Sectoral trends Power generation

Fossil-fuel power plants emitted 11.4 Gt of CO2 in 2006, 41 of the world total. This share has been rising steadily, from 36 in 1990 and 39 in 2000, and continues to grow in the Reference Scenario, to 44 in 2020 and 45 in 2030. Power-sector CO2 emissions reach 16 Gt in 2020 and 18 Gt in 2030. Cumulatively, power generation contributes over half the increase in energy-related CO2 emissions to 2030 in the Reference Scenario. This growth is driven by the relatively rapid growth in demand for...

Interregional trade

Major Gas Trade Flows

Inter-regional natural gas trade between major WEO regions is projected to more than double over the projection period, from 441 bcm in 2006 to around 1 tcm in 2030 Table 4.3 . Trade rises much faster than demand, due to the pronounced geographical mismatch between resource location and demand. As a result, regional gas markets become more integrated as trade in LNG expands and new long-distance and undersea pipelines enable more gas to be traded between regions. Imports rise in all the regions...

Wind power

Wind power has been growing at around 25 per year over the past few years. Worldwide, installed wind power capacity rose from about 6 GW in 1996 to 74 GW in 2006 and to 94 GW in 2007, with over 60 installed in OECD Europe. Germany has the largest installed capacity in the world, reaching 20.6 GW in 2006 and over 22 GW in 2007. Germany and Spain together account for about two-thirds of installed wind power capacity in OECD Europe. The rapid growth of wind power in these two countries is largely...

Figure Proven coal reserves in leading producing countries

Rest of world Kazakhstan Ukraine South Africa India Australia China Russia United States Between 2006 and 2030, world coal production is projected to rise by almost 60 , or over 2 610 Mtce Table 5.2 . The United States remains far and away the biggest producer in the OECD, its production rising by 19 between 2006 and 2030. Production in OECD Europe continues its steady decline. The removal of subsidies, notably in Germany, leads to the closure of high-cost mines. Coal output in OECD Pacific is...

Carbondioxide enhanced oil recovery COEOR

CO2-EOR, which involves the injection of CO2 into oil reservoirs, is receiving increased attention because of the potential availability of CO2 from anthropogenic sources and the environmental benefits of carbon sequestration. There are currently more than 100 CO2-EOR projects in the world today, most of them in North America, producing 300 kb d of additional oil. In most cases, the CO2 is extracted from produced natural gas. In the United States alone, the contribution from CO2-EOR has been...

Current and projected energy use in cities

Energy Use City

Our detailed analysis of current city energy use focuses particularly on four regions the United States, the European Union, Australasia defined here as Australia and New Zealand , and China. In the first three, city energy use per capita is roughly the same as the national average Table 8.1 . Cities in the European Union tend to use less energy per capita than US and Australasian cities, because of higher population densities, more extensive urban public transport systems, and more district...

Nonconventional oil

Non-conventional oil - extra-heavy oil excluding Venezuela , oil sands, chemical additives, gas-to-liquids and coal-to-liquids - is expected to play an important role in offsetting the decline in production from existing fields and supplementing supplies from new conventional oilfields and NGLs. The global supply of non-conventional oil is projected to increase from 1.7 mb d in 2007 to 8.8 mb d in 2030 Figure 11.12 . Canadian oil-sands projects make, by far, the largest contribution, increasing...

Info

Estimates of ultimately recoverable conventional resources, including cumulative 8 production, remaining proven and probable reserves, reserves growth and undiscovered lt resources, vary widely. In its 2000 assessment, the US Geological Survey estimated ultimately recoverable resources at at 436 tcm in its mean case USGS, 2000 . Adjusted for cumulative production and changes in reserves since that assessment, remaining resources including proven reserves, undiscovered resources and reserves...

Longterm oilsupply cost curve

Oil Supply Curve

We have updated the oil-supply cost curve, which we first produced three years ago IEA, 2005 ,4 based on the latest estimates of resource potential and the estimated range of 4. The IEA will be updating in 2009 the Resources to Reserves study, first published in 2005 IEA, 2005 , with an extended coverage of resources and technologies. current costs of production. The curve plots the potential long-term contributions from conventional resources including those defined above as conventional oil...

The global powergeneration mix

By 2030, the share of fossil fuels in the electricity generation mix falls from 66 in the Reference Scenario to 55 in the 550 Policy Scenario, the current share being 67 . The largest fall is in the share of coal, which drops to 32 in 2030 - 12 percentage points lower than in the Reference Scenario Figure 18.7 . Figure 18.7 Fuel shares in world electricity generation in the Reference and 550 Policy Scenarios Figure 18.7 Fuel shares in world electricity generation in the Reference and 550 Policy...

Box Methodological issues and city energy data

There is no international consensus on the definition of a city. For reasons of data availability, in this Outlook city refers to all urban areas, from mega-cities to smaller-scale urban settlements. City energy data are difficult to find, often incomplete and rarely in a format that allows comparisons between cities or with national data. Once data are acquired, analysis requires consideration of city boundary issues - what energy was consumed within the city, how to deal with energy supplied...

Trends in primary oil demand

Global primary oil demand1 is projected to grow by 1.0 per year on average in the Reference Scenario, from 85 million barrels per day in 2007 to 94 mb d in 2015 and to 106 mb d in 2030 Table 3.1 . The share of oil in global primary energy demand drops from 34 in 2006 to 30 in 2030. This is a significant, 10-mb d downward revision from last year's Outlook, reflecting the impact of much higher prices and slightly slower GDP growth. A number of new government policies introduced in the past year -...

Box IEA Upstream Investment Cost Index

Cera Index Lng

We have prepared an overall index of upstream capital costs worldwide in US dollars, based on disaggregated data for the different cost components, back to 2000. The aim is to determine the average annual rate of increase in underlying costs incurred directly by operating companies for both exploration and production, stripping out the effect of shifts in spending on different types of upstream projects and regions as well as the impact of changes in drilling productivity e.g. average well...

Coal prices and supply costs

Coal prices have kept pace with the surge in international oil and gas prices Figure 5.7 , although on an energy basis, coal remains the cheapest fossil fuel. For example, the average price of steam coal imported into the European Union in 2007 was 3 per MBtu, compared with 8.80 per MBtu for imported high-sulphur fuel oil, 7.30 per MBtu for natural gas imported by pipeline and 6.50 per MBtu for liquefied natural gas. During 2007 and 2008, coal prices repeatedly reached historic highs. Asian and...

Primary energy mix

Projected world primary energy demand in the Reference Scenario increases by 45 between 2006 and 2030 - an average annual rate of growth of 1.6 Table 2.1 .1 This is 0.2 percentage points slower than the rate projected in last year's Outlook, largely due to changes in our assumptions for energy prices and economic growth, as well as new government policies introduced since last year Box 2.1 . It is also slower than the average growth of 1.9 per year from 1980 to 2006. World energy intensity -...

Box Modelling oil production in WEO

For WEO-2008, trends in oil production to 2030 are modelled using a bottom-up methodology, making extensive use of the IHS database of worldwide proven and probable reserves and discovered fields, and country-by-country estimates of ultimately recoverable resources from the US Geological Survey USGS . The methodology aims to replicate investment decisions in the oil industry by analysing the profitability of developing reserves at the project level Figure 11.2 . In the model, production in...

Box The Ghawar field the supergiant among supergiants

Super Giants

The Ghawar field - the world's largest - was discovered in 1948 and started producing in 1951. The area of the field - more accurately described as a collection of oil-bearing formations - is partitioned into six geographical areas, from north to south Ain Dar, Shedgum, Farzan, Hawiyah, Uthmaniyah and Haradh. Oil is produced from the Jurassic formations, namely Arab, Dhruma and Hanifa, while gas and condensate are extracted from the deeper and older reservoirs, in the Khuff, Unayzah and Jawf...

Technology

Technological innovation and the rate of deployment of new technologies for supplying or using energy have a major impact on energy balances, both in terms of the overall amount of energy used and the fuel mix. Our projections are, therefore, very sensitive to assumptions about technological developments. In general, it is assumed in the Reference Scenario that the performance of currently available technologies improves on various operational criteria, including energy efficiency. High energy...

Trends by region and energy source

The Reference Scenario projections call for cumulative investment in energy-supply infrastructure of 26.3 trillion in year-2007 dollars over 2007-2030 Table 2.4 . This amount is around 4.4 trillion higher than in WEO-2007, because of an upward revision in assumed unit costs. More than half of global investment, or 13.6 trillion, goes towards the power sector. Oil- and gas-sector investments total 11.7 trillion, 2.2 trillion higher than last year's Outlook, with over 65 required in non-OECD...

Policy Scenario

In the 450 Policy Scenario, primary energy demand grows at an average 0.8 per year to 2030, half the rate of growth in the Reference Scenario. Demand approaches 14 400 Mtoe in 2030 - a reduction of about 7 relative to the 550 Policy Scenario and 16 relative to the Reference Scenario Table 18.3 . The annual saving compared with the Reference Scenario is comparable to the current energy demand of OECD North America. The reduction in the use of fossil fuels over 4 000 Mtoe in 2030 relative to the...

Middle East

The Middle East holds around 40 of world gas reserves with Iran, Qatar, Saudi Arabia and United Arab Emirates holding the largest volumes. Gas reserves in Iran and Qatar alone account for nearly 30 of the world total. Yet, despite a rising trend in production in recent years, these two countries together account for only 5 of global production and the region as a whole for less than 11 , suggesting strong potential to boost supply in the long term, particularly in Iran. Production in the Middle...

To what extent are biofuels driving up the price of food

Soaring global food prices have recently sparked riots in many countries, including Haiti, Cote d'Ivoire, Ethiopia, Madagascar, Philippines and Indonesia. Food prices accelerated sharply in 2008, with grain prices more than doubling since January 2006. Over 60 of the rise in food prices has occurred since January 2008. Competition from biofuels production is one of many factors contributing to higher food prices. Other factors include increasing dietary demand for meat and milk products, with...

Natural gas prices

Gas Prices 1980 2010

Natural gas prices have remained strongly linked to oil prices, either directly through indexation clauses in long-term supply contracts or indirectly through competition between gas and oil products in power generation and end-use markets. Thus, the prices of gas traded internationally and locally on open markets around the world have risen sharply in recent years with oil prices, though price differentials can fluctuate sharply.11 Although only a small share of world gas is traded between...

Biofuels

World Biodiesel Consumption

Final demand for biofuels transport fuels derived from biomass worldwide reached 24.4 Mtoe 0.6 mb d adjusted for energy content in 2006, up from only 10.3 Mtoe in 2000 and 6 Mtoe in 1990.7 Biofuels represented only around 1.5 of total road-transport fuel demand in 2006. North America is the world's largest biofuels consumer Table 7.2 , followed by Latin America and the European Union, and most of the recent growth in biofuels use has come from the United States. Demand there grew by some 23 per...

Box Improvements to the modelling framework in WEO

The lEA's World Energy Model WEM - a large-scale mathematical construct designed to replicate how energy markets function - is the main tool used to generate the sector-by-sector and fuel-by-fuel projections by region or country for all the scenarios in this Outlook.1 The model, which has been developed over several years, comprises five main modules final energy demand, power generation, refining and other transformation, investment and carbon-dioxide CO2 emissions, all of which are modelled...