International Energy Forum The IEF Charter & Energy Security Noé van Hulst, Secretary General, International Energy Forum (IEF)
International Energy Forum IEF covers key consuming & including those outside IEA and OPEC Neutral Facilitator of Global Energy Dialogue Covers key producing, consuming and transit countries including those outside IEA and OPEC Around 90% of Global Oil & Gas Supply and Demand
Fresh IEF Charter Signed by 86 countries at Extraordinary IEF Ministerial Meeting (22 February 2011) Includes all major energy producers and consumers Reinforces commitment (producers / consumers / transit) Procedure for Extraordinary Ministerial Meeting
Fundamental Aims - IEF Foster greater mutual understanding & awareness of common interests Promote stable and transparent energy markets, security of supply & demand Identify & promote principles / guidelines enhancing energy market transparency, stability & sustainability Narrow differences among producing / consuming / transit countries Build confidence and trust through improved information sharing Promote study & exchange of views on energy-relevant issues Facilitate collection / compilation / dissemination of relevant data, information and analyses
Key Results from IEF12 Cancun, March 2010 Investment Transparency Sustainability Platforms for Dialogue 3 rd Workshop on Asian 2 nd IEF IGU Ministerial 2 nd CCS Symposium Energy Outlook (Jun 2010) Gas Forum (Nov 2010) (May 2010) 4 th Asian Ministerial Energy Energy Efficiency Roundtable Symposium (June 2011) (Apr 2011) 2 nd NOC IOC Forum 2 nd Energy Poverty (Apr 2011) Symposium (H2 2011) Approval of IEF Charter Ministerial Meeting (Feb 2011) Research & Analysis IEA / IEF / OPEC Workshop on Financial and Physical Markets (Nov 2010) IEA / IEF / OPEC Forum of Regulators Meeting (Nov 2010) IEA / IEF / OPEC Symposium on Energy Outlooks (Jan 2011) Data Transparency (JODI) Assess Extension to Annual Data (Fall 2009) JODI Internship (Jun 2010) JODI Training Workshop (L. America Jul 2010) JODI Gas Symposium (Oct 2010) 8 th JODI Conference (Fall 2011) Input to IEF13 Ministerial in Kuwait, 2012
Main Global Energy Trends The IEF Consensus World Energy Demand Grows Significantly Fossil Fuels Dominate the Energy Mix Increasing Interdependence
Oil Reserves & Production Middle East (Reserves at end 2009, Production for 2009) Rank Country Reserves (Gbbl) Production (Mbd) World 1333.1 79.9 1 Saudi Arabia 264.6 9.7 3 Iran 137.6 4.2 4 Iraq 115.0 2.5 Source: BP Statistical Review Middle East Volume Share Reserves 754.2 Gbbl 57 % Production 24.4 Mbd 30% Rank Imports from the Middle East Volume (Mbd) Share 1 Asia 13.5 61 % 2 Europe 2.1 16 % 3 USA 1.7 15 %
Gas Reserves & Production Middle East (Reserves at end 2009, Production for 2009) Rank Country Reserves (tcm) Production (bcm) World 187.5 2987.0 1 Russia 44.4 527.5 2 Iran 29.6 131.2 3 Qatar 25.4 89.3 Middle East Volume Share (%) Reserves 76.2 tcm 41 % Production 407.2 bcm 14 % Source: BP Statistical Review
Mitigating Energy Market Volatility IEA / IEF / OPEC cooperation Shared analysis of future trends Linkages - physical and financial markets Enhancing data transparency (oil, gas, investment) Strong support from G20
Shared Analysis of Energy Market Trends and Outlook 2011 Oil Markets: Consensus on comfortable demand / supply balance / high spare capacity Medium-term: Long-term: Need for: Reduce uncertainty to facilitate investment Consensus ample availability of oil resources Harmonisation of definitions and better explanation of divergences to market Annual Symposium on Outlooks
Significant Flexibility in Oil System 2011 is not 2008 IEA * OPEC* 2011 Change 2011 Change World Oil Demand mb/d 89.4 +1.4 87.9 +1.4 World Oil Supply mb/d 89.4 +1.4 87.9 +1.4 Implied OPEC Spare Capacity mb/d 3.9 5.0 OECD Commercial Oil Stocks mb 2676 59.2 days 2670 58 days IEA Emergency Stocks 1.55 bn Libyan Oil Exports (Temp. loss) mb/d 1.0 Japanese Extra Oil Demand (Temp.) mb/d 0.15 * Based on April 2011 Oil Market Reports IEA / OPEC
Remember the History 10 major oil supply disruptions (1956 2010) < 60 days in 55 years (0.3%) Average gross peak supply loss: 3.1 m/bd Average duration of supply disruption: 4.8 months Other producing countries often stepped in to compensate losses Higher oil prices do impact oil demand (even with lower elasticities) Spending of oil revenues significantly higher than in the past
Gas Market Flexibility Excess Gas Supply Capacity: Around 170 bcm in 2010 (IEA WEO 2010) Japan extra gas demand max 12-15 bcm, extra LNG shipments already en route Other countries, Germany: industry expects extra gas demand Libya gas exports loss max 10.4 bcm largely compensated by other producers Natural gas inventories across Europe are comfortable Continued strong demand growth in Asia e.g. CNPC projects doubling Chinese gas consumption by 2015 around 230 bcm Spot prices rising e.g. TTF +17% since January Excess gas supply capacity may diminish faster than projected in the medium term and don t forget coal: extra demand from Japan, coal prices up.
Linkages between Physical and Financial Markets Emergence of oil as an asset class; Shift of the centre of demand growth, Evolving short-term price inelasticity of supply and demand; Wide divergence of views: Fundamentals vs financials Consensus: Greater transparency (oil inventories, OTC) Need for strong international co-ordination of regulation Continue horizontal dialogue between physical / financial oil markets Plan next meeting in fall 2011
Number of countries with smiley face Enhancing Data Transparency Report to G20 Finance Ministers (April 2011) Oil spot market prices - assessment by oil price reporting agencies Report to G20 Finance Ministers (October 2011) Price volatility of oil / gas / coal Joint Organisations Data Initiative (Jodi) Performance 72 49 58 66 75 60 56 52 53 54 82 83 64 59 68 81 56 79 70 69 62 77 55 67 JAN-JUN 2007 JUL-DEC 2007 JAN-JUN 2008 JUL-DEC 2008 JAN-JUN 2009 JUL-DEC 2009 JAN-JUN 2010 JUL-DEC 2010 Submission Timeliness Completeness
Improving the Quality of Report to IEF Ministers & G20 Finance Ministers (April 2011) Jodi Organisations: New tools / practices, enhance interaction with data users Training Statisticians, upgrade website / database Countries: Energy data offices better equipped / staffed Appropriate regulation and tackle confidentiality Target: 3 Smiley Faces before year-end 2011
Extension of to Gas and Annual Investment Data Monthly gas data Launch before end 2011 supply, demand, stocks Cooperation with all relevant organisations (including GECF) Annual data, start with First results in 2012 capacity expansion, upstream / downstream critical for demand / supply balance medium - term
NOC IOC Cooperation 2 nd NOC IOC Forum (Total / Saudi Aramco, April 2011) Easternization of Energy Demand Huge investment challenge (nearly $33 trillion up to 2035) Innovative long-term partnerships based on trust General principles or best practices as a tool role for IEF Industry Advisory Committee
Energy Efficiency IEF as a platform to engage developing countries Discuss policies, share best practices G20: Tackle inefficient fossil fuel subsidies IEF Symposium June 2011(Jakarta)
Energy Poverty Lack of access is inhibiting development Fighting energy poverty 9 th MDG New impetus 2012 Year of Sustainable Energy for All (UN) IEF Symposium H2 2011
The Way Forward Strengthen IEF s neutral facilitator role Deliver results for IEF13 (Kuwait 2012) & G20 on: Transparency(Jodi-Oil/Gas/Investment) Investment (NOC-IOC, Jodi Investment) Sustainability (Energy Efficiency, Energy Poverty)
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