External oil supply risks in EU, US, Japan, China and India dr.ir. Wina Crijns-Graus Assistant Professor Energy & Resources Copernicus Institute of Sustainable Development, Utrecht University
Trends in energy use EU Fossil fuels 83% in 1990 to 79% in 2000 and 74% in 2012 Increasing net imports Oil imports: 75-80% in 1990-2000 => 88% in 2012 Natural gas imports: 46% in 1990 => 64% in 2012 Norway has increased from 7% to 22% Coal imports: 21% in 1990 => 51% in 2012
Total net imports in EU 1990 1995 2000 2005 2010 2011 2012 Coal 21% 25% 36% 45% 44% 47% 51% Natural gas 46% 44% 49% 59% 63% 67% 64% Oil 80% 75% 76% 82% 85% 86% 88% Total primary energy use 43% 43% 46% 52% 52% 54% 53% Excluding Norway 39% in 1990 and 47% in 2012
Production and reserves EU Unit: EJ in Oil Natural gas Coal 2012 Consumption 26 (15%) 16 (13%) 12 (4%) Production 3 (1.8%) 5 (5.5%) 7 (3%) Reserves 37 (0.4%) 60 (0.9%) 1629 (6.5%) In EJ Shale oil Shale gas Bulgaria 1 17 Denmark 0 31 France 25 134 Germany 4 17 Netherlands 16 25 Poland 18 145 Romania 2 50 Spain 1 8 Sweden 0 10 United Kingdom 4 25 EU27 70 (3.7%) 462 (6.6%)
Aim of research This research aims to give insight in external oil supply risks (EOSR) for the largest oil-importing countries in 2035 under different scenarios. NET OIL IMPORTS (EJ) 2012 European Union 23 United States 18 China 11 India 8 Japan 8 Total of net importing countries 85
Method (1): Modified diversification indices Framework Yang et al. (2014) Hirschman-Herfindahl index (HHI): w ij = share of supplier j in oil imports country i x ij = oil imports country i from supplier j N is number of oil suppliers to country i Modified HHI with Country Risk (HHI-CR): CR j = overall country risk of oil supplier j: CR j = 100 - ICRG j ICRG j is composite country risk ratings score (ICRG, 2012) Modified HHI with Potential Exports (HHI-PE): PE j = potential oil exports of supplier j, r j = R/P ratio, s j = share of supplier j in world exports Combined index:
Method (2): Oils supply risk indices (OSRI) Oil import dependency: Where: D i = oil import dependency, NI i = net oil imports of country i, C i = total oil consumption of country i.
Method (3): Scenarios IEA World Energy Outlook 2013 edition Current Policies Scenario (CPS) New Policies Scenario (NPS) 450 ppm scenario (450) Uppsala scenario (Aleklett et al, 2010)
Data input VARIABLES SYMBOL SOURCE ASSUMPTIONS Oil imports per supplier Country risk factor Reserves/ production ratio EC, 2013; EIA, 2014a; w Reuters, 2012a; Petroleum ij Association of Japan, 2014; Reuters, 2012b CR j ICRG, 2012 r j BP, 2014 Import figures from 2012/2013 from each supplier are used and held constant to 2035. IEA scenarios: Average of 'worst case' and 'best case' five-year forecast. Uppsala: worst case' five-year forecast IEA scenarios: R/P ratio held constant Uppsala: R/P ratio revised downward by 0.5 year/year up to 2035 The share of an oil supplier in total world oil trade Net oil imports Total oil Demand s j BP, 2014; EIA, 2014b; Campbell, 2008; Campbell, 2013 NI i EIA, 2014b, IEA, 2013; Campbell, 2013 C i IEA, 2013 Net petroleum exports used for share in total world oil trade for supplier countries, based on developments of oil consumption and production up to 2035. Changing to 2035 in different energy future scenarios Changing to 2035 in different energy future scenarios
EJ EJ EJ EJ EJ 35 30 25 20 15 10 5 0-5 -10 40 35 30 25 20 15 10 5 0 Results: import dependence Net oil imports US Oil production US 2011 2035 Uppsala 2035 CPS 2035 NPS 2035 450 Net oil imports China Oil production China 2011 2035 Uppsala 2035 CPS 2035 NPS 2035 450 9 8 7 6 5 4 3 2 1 0 25 20 15 10 5 0 2011 2035 Uppsala 18 16 14 12 10 8 6 4 2 0 Net oil imports EU Oil production EU 2011 2035 Uppsala 2035 CPS 2035 NPS 2035 450 Net oil imports Japan Oil production Japan 2035 CPS 2035 NPS 2035 450 Net oil imports India Oil production India 2011 2035 Uppsala 2035 CPS 2035 NPS 2035 450
Results: modified diversification indices HHI: import diversification India (53% of imports from Iran, Iraq, Kuwait and Saudi Arabia) China (61% Saudi Arabia, Angola, Iran and Russia) EU (41% from Russia and Norway) US (62% from Canada, Saudi Arabia and Mexico) Japan (68% from Saudi Arabia, United Arab Emirates and Qatar) HHI-CR: same ranking, higher differences HHI-PE: Japan, India EU, US, China Japan (OPEC high R/P ratios) and China (Angola, Yemen low R/P) IEA CLIMATE SCENARIOS HHI HHI-CR i HHI-PE i HHI-RE i European Union 0.14 4.03 0.09 2.26 United States 0.17 3.82 0.10 2.81 China 0.12 3.36 0.10 3.24 Japan 0.18 4.34 0.05 1.19 India 0.10 3.08 0.05 1.38 Uppsala Scenario 2035 European Union 0.14 5.20 0.53 13.25 United States 0.17 4.98 0.69 27.04 China 0.12 4.48 0.29 11.94 Japan 0.18 6.01 0.08 2.66 India 0.10 4.09 0.13 4.90
Results: OSRI HHI CR I PE I RE I HHI CR I PE I RE I Japan European Union 2011 0.18 4.19 0.05 1.14 0.10 2.72 0.06 1.52 2035 - Uppsala 0.18 5.81 0.08 2.58 0.13 4.68 0.48 11.92 2035 - CPS 0.17 4.12 0.05 1.12 0.11 3.04 0.07 1.70 2035 - NPS 0.17 4.10 0.05 1.12 0.10 2.91 0.07 1.63 2035-450 0.17 4.04 0.05 1.10 0.09 2.51 0.06 1.41 China India 2011 0.03 1.74 0.05 1.68 0.07 2.24 0.03 1.00 2035 - Uppsala 0.10 3.88 0.25 10.33 0.10 3.95 0.12 4.74 2035 - CPS 0.05 2.65 0.08 2.56 0.09 2.85 0.04 1.28 2035 - NPS 0.05 2.56 0.08 2.46 0.09 2.84 0.04 1.27 2035-450 0.04 2.24 0.07 2.16 0.09 2.78 0.04 1.25 United States 2011 0.07 1.54 0.04 1.13 2035 - Uppsala 0.10 2.86 0.40 15.55 2035 - CPS 0.04 0.91 0.02 0.67 2035 - NPS 0.02 0.36 0.01 0.26 2035-450 -0.04-0.79-0.02-0.58
Conclusions Dependency rates Influence suppliers Diversification, CR, PE EU: Russia and Norway Japan suppliers with large potential exports China countries with low R/P ratio's India countries with a higher country risk level (Iran and Iraq) Uppsala scenario Climate policies
Questions?
References Aleklett. K.. Höök. M.. Jakobsson. K.. Lardelli. M.. Snowden. S.. Söderbergh. B.. 2010. The Peak of the Oil Age - Analyzing the World Oil Production Reference Scenario in World Energy Outlook 2008. Elsevier. Energy Policy. Issue: 38 (2010). pp. 1398-1414 Amineh, M. P. and W.H.J. Crijns-Graus (2014). Rethinking EU energy security considering past trends and future prospects. Perspectives on global development and technology, 13, 757-825. Yang. Y.. Li. J.. Sun. X.. Chen. J.. 2014. Measuring External Oil Supply Risk: A Modified Diversification Index with Country Risk and Potential Oil Exports. Elsevier. Energy. Issue: 68 (2014). pp. 930-938