OVERVIEW OF TRENDS IN WORLD GAS DEVELOPMENT AND USE International Symposium on Natural Gas and Sustainable Development Doha, Qatar 6-8 February 2006 Ian Cronshaw Head, Energy Diversification Division
World Primary Energy Demand 18 000 16 000 Mtoe 14 000 12 000 10 000 8 000 6 000 4 000 Oil Gas Coal 2 000 0 Other renewables Nuclear Hydro 1970 1971 1980 1990 2000 2010 2020 2030 Oil and gas together account for more than 60% of the growth in energy demand between now and 2030 in the Reference Scenario
World Oil Production Shifts Away from OECD 2.2 mb/d 10.2 mb/d 13.5 mb/d 20.2 mb/d OECD 30.9 mb/d MENA Other NCO 41.2 mb/d 50.5 mb/d 29.0 mb/d 2004 2030 Global oil production climbs from 82 mb/d in 2004 to 115 mb/d in 2030; OECD share falls from 25% to 12%
Energy-Related CO 2 Emissions by Region 2003 2030 China 16% India 4% Other 11% MENA 6% India 6% Other 16% MENA 8% China 19% Transition economies 11% 24 Gt OECD 52% Transition economies 9% 37 Gt OECD 42% Global emissions grow by just over half between now and 2030, with the bulk of the increase coming from developing countries
Net Natural Gas Imports by Major Region in the Reference Scenario 600 500 400 Mtoe 300 200 100 0 OECD North America OECD Europe OECD Pacific China India 2003 2010 2030
The power sector is the driver of OECD European gas demand growth 700 600 500 mtoe 400 300 200 100 0 1971 1980 1990 2000 2003 2010 2020 2030 Res./Com. & Others Industry Power Source: World Energy Outlook 2004
And the power sector relies more and more on natural gas (and renewables) (OECD Europe) TWh 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Electricity generation OECD Europe 26% 32% 19% 20% 16% 6% 7% 5% 1971 1980 1990 2000 2004 2010 2020 2030 Coal Oil Gas Nuclear Hydro Biomass and waste Other Renewables %: Share of gas in electricity generation Source: World Energy Outlook 2004
But, downward revisions Changing Outlook for gas demand by the power sector Mtoe 400 350 300 250 200 150 100 50 0 2003 2010 2020 2030 WEO 1998 WEO 2000 WEO 2002 WEO 2004
Europe (EU 25) is becoming increasingly dependent on outside suppliers 800 600 bcm 400 200 0 1980 1990 2002 2010 2020 2030 Production Net imports
MENA Share in World Oil and Gas Reserves & Production, 2004 Proven oil reserves Oil production Proven gas reserves Gas production 0% 20% 40% 60% 80% MENA share of global oil & gas reserves is much higher than its share of current production, suggesting strong potential for growth
MENA Natural Gas Production by Country bcm 1 200 1 000 800 600 400 200 0 Other Egypt Qatar UAE S. Arabia Iran Algeria 1980 1990 2003 2010 2020 2030 Output surges from 385 bcm in 2003 to 1 210 bcm in 2030, with most of the increase coming from Qatar, Iran, Algeria & Saudi Arabia
MENA Net Natural Gas Exports by Country Qatar Algeria Iran Libya Other Middle East Egypt Iraq 0 40 80 120 160 bcm 2003 2010 2030 Qatar overtakes Algeria by 2010 as the largest MENA gas exporter
Share of International Gas Export Growth between 2004 and 2030 50% 40% 30% 20% 10% 0% Russia Iran Algeria Qatar Qatar will account for almost one quarter of the increase in gas interregional trade between 2004 and 2030
Total MENA Energy Investment, 2004-2030 Other North Africa Libya Egypt Kuwait Iraq Algeria UAE Qatar Other Middle East Iran Saudi Arabia 0 50 100 150 200 250 300 350 billion dollars (2004) Oil Gas Electricity About $1.5 trillion, or $56 billion per year, of investment are needed to expand capacity & replace facilities that are retired
Deferred Investment Scenario How would global energy markets evolve if investment MENA upstream oil industry grew slower than in the Reference Scenario? Investment is assumed to remain constant at its share of historical GDP in each country MENA oil production is lower compared to the Reference Scenario, and the gap is widening over time Oil prices are driven higher - an increase of 32% over the Reference Scenario in 2030 - dragging up gas, coal and electricity prices MENA gas production is also lower compared to the Reference Scenario due to Reduced global gas demand & call on MENA gas Lower associated oil/gas output
MENA Net Natural Gas Exports 500 400 206 bcm bcm 300 116 bcm 200 24 bcm 100 0 2003 2010 2020 2030 Reference Scenario Deferred Investment Scenario MENA gas exports are much lower in the DIS, as higher gas prices & lower GDP choke off demand in the main importing regions
Oil/Gas Demand in the Reference and Alternative Policy Scenarios 140 6000 120 100 12.1 mb/d 500 bcm 5000 4000 mb/d 80 60 3000 bcm 40 2000 20 1000 0 Oil Gas 0 2004 2030 Reference Scenario 2030 Alternative Scenario Oil & gas demand in the Alternative Scenario are both 10% lower in 2030 due to significant energy savings and a shift in the energy mix
Global Energy-Related CO 2 Emissions in the Reference and Alternative Policy Scenarios 40 000 35 000 million tonnes of CO 2 30 000 25 000 20 000 1990 2000 2010 2020 2030 Coal Oil Gas Alternative Policy Scenario Reference Scenario In 2030, CO 2 emissions are 16% lower than in the Reference Scenario, but are still more than 50% higher than 1990
DEVELOPMENTS IN 2005-2006 March 2005: late cold snap in Europe August 2005: Hurricane damage affects 20 per cent of US gas output January 1 2006: Western European gas supplies affected January 2006: Georgia, Armenia affected January-February 2006: Italy affected WDATM? Outlook for Gas-in-Power? Globalised gas markets? Approaches to Gas Security
Key Messages If governments stick with current policies, global energy needs will be more than 50% higher in 2030 than today - Gas plays an important and growing role But gas production in IEA countries is plateauing or falling In any plausible scenario, MENA oil & gas resources will be critical to meeting the world s growing appetite for energy In gas, MENA production to treble; Countries like Qatar, Iran and Algeria will play key roles Russia is a key player in the gas market also
Further underinvestment in oil and gas would drive up prices & depress global GDP growth, eventually harming producers too Importing countries must have a policy environment conducive to investment Major importing countries are already considering more vigorous policies to curb demand growth, reduce reliance on oil and gas and improve environmental outcomes Continued need for dialogue between producers and consumers to find mutually beneficial outcomes