T A BL PART A GLOBAL ENERGY TRENDS TO 2030 E O F PART B POST-2012 CLIMATE POLICY FRAMEWORK C O NT E N TS PART C PROSPECTS FOR NATURAL GAS PART D ENERGY PROSPECTS IN SOUTHEAST ASIA ANNEXES
GLOBAL ENERGY TRENDS IN THE REFERENCE SCENARIO 1 IMPLICATIONS OF CURRENT ENERGY POLICIES 2 IMPACT OF THE FINANCIAL CRISIS ON ENERGY INVESTMENT 3 CLIMATE CHANGE AND THE ENERGY OUTLOOK ENERGY AND CO 2 IMPLICATIONS OF THE 450 SCENARIO THE 450 SCENARIO AT THE SECTORAL LEVEL 4 5 6 COSTS AND BENEFITS IN THE 450 SCENARIO 7 FUNDING LOW-CARBON GROWTH 8 COUNTRY AND REGIONAL PROFILES IN THE 450 SCENARIO 9 OUTLOOK FOR GAS DEMAND 10 GAS RESOURCES, TECHNOLOGY AND PRODUCTION PROFILES 11 OUTLOOK FOR GAS SUPPLY AND INVESTMENT 12 REGIONAL ANALYSIS 13 PROSPECTS FOR NATURAL GAS PRICING 14 OVERVIEW OF ENERGY TRENDS IN SOUTHEAST ASIA ASEAN-4 COUNTRY PROFILES 15 16 ANNEXES
Foreword 3 Acknowledgements 5 List of Figures 21 List of Tables 31 List of Boxes 36 List of Spotlights 38 Executive Summary 41 Introduction 53 Scope and methodology 53 Principal assumptions 56 Population 56 Economic growth 58 Energy prices 63 CO 2 prices 68 Technology 68 Part A: Global energy trends to 2030 71 1 Global energy trends in the Reference Scenario 73 Highlights 73 World energy trends to 2030 74 Primary energy mix 74 Regional trends 76 Sectoral trends 79 Energy production and trade 79 Oil market outlook 81 Biofuels outlook 87 Gas market outlook 88 Coal market outlook 89 Power and renewables 96 Electricity demand 96 Electricity supply 97 New capacity and investment in infrastructure 102 Water desalination 103 Energy investment 104 2 Implications of current energy policies 109 Highlights 109 Introduction 110 Implications for the environment 110 Global trends in energy-related CO 2 emissions 110 Local and regional air pollution 113 14 World Energy Outlook 2009
Implications for energy security 115 Oil security 115 Natural gas security 120 Electricity security 122 Selected economic implications 123 Spending on imports 123 Export revenues 125 Implications for energy poverty 128 3 Impact of the financial crisis on energy investment 135 Highlights 135 How the crisis has affected energy investment so far 136 Impact on oil and gas investment 138 Global trends and near-term outlook 138 Impact of the credit crunch on oil and gas financing 139 Upstream investment 141 Downstream investment 149 Implications for capacity are we heading for a mid-term supply crunch? 150 Impact on biofuels investment 151 Impact on coal investment 154 Overview 154 Impact on major coal producers 155 Impact on power-sector investment 157 Electricity demand 157 Power-sector investment trends and outlook 158 Nuclear power investment 160 Renewables-based power-generation investment 161 What role for government? 164 Part B: Post-2012 climate policy framework 165 4 Climate change and the energy outlook 167 Highlights 167 Introduction 168 Greenhouse-gas emissions in the Reference Scenario 169 Trends across all sectors 169 Global trends in energy-related CO 2 emissions 170 Trends in energy-related CO 2 emissions in key regions 181 Sectoral trends in energy-related CO 2 emissions 184 The implications of the Reference Scenario for climate change 190 Greenhouse-gas concentration 190 Climatic consequences 191 The cost of delayed action 192 A global carbon budget to last a generation? 192 Energy sector lock-in 194 Table of contents 15
5 6 Energy and CO 2 implications of the 450 Scenario 195 Highlights 195 Methodology and assumptions 196 Overview 196 Greenhouse-gas emissions trajectory 196 Policy framework 201 Macroeconomic impact 203 Implications for energy-related CO 2 emissions 204 Contribution of different abatement measures to the 450 Scenario 210 Implications for energy demand 211 Implications for energy supply 216 Oil 216 Natural gas 217 Coal 218 The 450 Scenario at the sectoral level 221 Highlights 221 Overview 222 Power generation 222 Carbon intensity and CO 2 reductions in the power sector 223 Evolution of the generation mix 228 Capacity additions 234 Mothballed and decommissioned plants 235 Transport 236 CO 2 trends 237 Road transport 237 Aviation and maritime 241 Energy trends and fuel mix 242 Regional trends 243 Implications for technology deployment 245 Implications for transport industry structure and policy 246 Industry 247 Regional trends 249 Sub-sectors 250 Buildings 251 Regional trends 252 7 Costs and benefits in the 450 Scenario 257 Highlights 257 Incremental investment needs in the 450 Scenario 258 Timing of incremental investment 262 Overall investment in power plants 263 Investment in nuclear power 266 Investment in renewable energy for large-scale power production 269 Investment in carbon capture and storage (CCS) 271 Investment in biofuels production 273 16 World Energy Outlook 2009
Investment in transport 274 Passenger cars 274 Aviation 278 Other transport 278 Investment in industry 278 Investment in buildings 280 Investment in fossil-fuel supply 282 Mitigation costs per unit of CO 2 reduction 282 Benefits of investing in low-carbon technologies and energy efficiency 286 Reduced local pollution 286 Valuing the benefits of the 450 Scenario 288 Investment in research, development, demonstration and deployment 290 Current status 290 Role for governments to enhance RD&D 291 8 9 Funding low-carbon growth 293 Highlights 293 Introduction 294 Financial support for mitigation in developing countries 294 Overall level of support by OECD+ countries 296 Mechanisms for delivering financial support 299 Carbon markets and the Clean Development Mechanism (CDM) 299 International funding pools 308 Financing issues for businesses, households and governments 311 Financing by businesses 313 Financing by households 314 Financing by governments 315 Country and regional profiles in the 450 Scenario 319 What is included in the profiles? 319 World 322 OECD+ 326 The United States (US) 330 The European Union (EU) 334 Japan 338 Other Major Economies (OME) 342 Russia 346 China 350 Other Countries (OC) 354 India 358 Part C: Prospects for natural gas 363 10 Outlook for gas demand 365 Highlights 365 Projected trends in natural gas demand 366 Reference Scenario 366 Table of contents 17
450 Scenario 372 Understanding the drivers of gas demand 374 The relationship between gas use and economic activity 375 Economics of inter-fuel competition 378 The impact of technological innovation and climate change 385 Government policies and geopolitics 387 11 12 Gas resources, technology and production profiles 389 Highlights 389 Gas resources and reserves 390 Classifying gas resources 390 Proven reserves 391 Gas in place and ultimately recoverable resources 394 Unconventional gas: characteristics and production technology 397 Tight gas 398 Coalbed methane 399 Shale gas 400 Gas hydrates 411 Exploitation of unconventional gas resources outside North America 413 Technology to exploit shale gas 413 Above-ground considerations 414 Long-term gas-supply cost curve 416 Special analysis of the production profiles of big gas fields 417 The world s largest gas fields 417 Production profiles and decline rates 421 Outlook for gas supply and investment 425 Highlights 425 Projected trends in natural gas production and trade 426 Reference Scenario 426 450 Scenario 443 Investment and cost outlook 445 Investment requirements to 2030 445 Cost trends 448 13 Regional analysis 453 Highlights 453 North America 454 Gas demand 454 Gas supply: United States 456 Gas supply: Canada and Mexico 458 LNG imports 459 Russia and the Caspian Region 459 Gas demand 459 Russian gas supply 463 Caspian gas supply 471 18 World Energy Outlook 2009
OECD Europe/European Union 476 Gas demand 476 Gas supply 478 Europe s 2020 supply options 480 The Middle East 485 Regional demand and supply 485 Qatar 487 Iran 490 Other Middle East 494 Africa 497 Asia-Pacific 501 Latin America 504 14 Prospects for natural gas pricing 507 Highlights 507 Gas pricing along the supply chain 508 North America: what will drive gas prices? 509 Continental Europe: what role for gas-on-gas competition? 515 Asia-Pacific: how will pricing evolve in the main importing countries? 520 Rest of the World: will price-setting become more market-based? 524 LNG trade and the prospects for regional gas market convergence 525 Contractual arrangements: more flexibility in prospect 526 Spot trade: renewed growth or consolidation? 527 LNG as a driver of regional gas market integration 531 Part D: Energy prospects in Southeast Asia 533 15 Overview of energy trends in Southeast Asia 535 Highlights 535 ASEAN energy overview 536 Principal assumptions 539 Economic growth 539 Population 541 Energy pricing and subsidies 542 The Reference Scenario 543 Energy demand 543 Oil supply 548 Natural gas supply 552 Coal supply 555 Power sector 556 Renewables supply 562 Energy-related CO 2 emissions and local pollution 563 Energy investment 565 The 450 Scenario 566 Energy demand 567 Table of contents 19
Energy-related CO 2 emissions 568 Incremental investment and co-benefits 569 ASEAN energy co-operation 570 The ASEAN Power Grid 572 The Trans-ASEAN gas pipeline 574 ASEAN oil security 577 16 Chapter 16: ASEAN-4 country profiles 581 Highlights 581 Indonesia 582 Overview and assumptions 582 Energy policy 583 Energy demand 585 Oil supply 588 Natural gas supply 589 Coal supply 590 Electricity generation 592 Climate change and local pollution 593 Thailand 593 Overview and assumptions 593 Energy policy 595 Energy demand 597 Oil supply 599 Natural gas supply 600 Coal supply 600 Electricity generation 600 Climate change and local pollution 601 Malaysia 601 Overview and assumptions 601 Energy policy 603 Energy demand 604 Oil supply 606 Natural gas supply 607 Coal supply 609 Electricity generation 609 Climate change and local pollution 610 Philippines 611 Overview and assumptions 611 Energy policy 612 Energy demand 614 Oil supply 615 Natural gas supply 616 Coal supply 616 Electricity generation 616 Climate change and local pollution 618 20 World Energy Outlook 2009
ANNEXES Annex A. Tables for Reference Scenario projections 621 Annex B. Sensitivity analysis 659 Annex C. Abbreviations, definitions and conversion factors 665 Annex D. Acronyms 675 Annex E. References 679 List of figures Introduction 1 Population by major region 58 2 Primary energy demand and GDP, 1971-2007 59 3 Per-capita income by region 63 4 Average IEA crude oil import price 65 5 Ratio of natural gas and coal prices to crude oil in the Reference Scenario 67 Part A: Global energy trends to 2030 Chapter 1. Global energy trends in the Reference Scenario 1.1 World primary energy demand by fuel in the Reference Scenario 75 1.2 Incremental primary energy demand by fuel and region in the Reference Scenario 78 1.3 Per-capita primary energy demand by region in the Reference Scenario 78 1.4 World final energy consumption by fuel and sector in the Reference Scenario 79 1.5 World fossil-energy production by region in the Reference Scenario 80 1.6 Change in primary oil demand by region and sector in the Reference Scenario 82 1.7 Passenger light-duty vehicle fleet and ownership rates in key regions in the Reference Scenario 83 1.8 Oil production by source in the Reference Scenario 85 1.9 Non-OPEC oil production and the oil price in the three oil shocks 86 1.10 Biofuels demand by region in the Reference Scenario 88 1.11 Primary natural gas demand by region in the Reference Scenario 88 1.12 Incremental coal production by type and region in the Reference Scenario 92 1.13 Coal supply cash-cost curve for internationally traded steam coal for 2008 and average FOB prices for 2008 and first-half 2009 93 1.14 World electricity generation by fuel in the Reference Scenario 97 1.15 Coal-fired power-generation capacity under construction by country 99 1.16 Installed nuclear power-generation capacity by region in the Reference Scenario 100 1.17 Share of renewables in electricity generation by region in the Reference Scenario 101 1.18 Power-generation capacity additions by region, 2008-2030 102 Table of contents 21
1.19 Electricity generation from combined water and power plants in North Africa and the Middle East 104 1.20 Cumulative investment in energy-supply infrastructure in the Reference Scenario, 2008-2030 106 1.21 Share of energy investment in GDP by region in the Reference Scenario, 2008-2030 107 Chapter 2. Implications of current energy policies 2.1 Energy-related CO 2 emissions by fuel and region in the Reference Scenario 111 2.2 World energy-related CO 2 emissions in WEO-2009 and WEO-2008 111 2.3 Dependence on net imports of oil by major country/region in the Reference Scenario 117 2.4 Dependence on net imports of natural gas by country/region in the Reference Scenario 120 2.5 Expenditure on net imports of oil and gas as a share of GDP at market exchange rates in the Reference Scenario 123 2.6 Annual expenditure on net imports of oil and gas in the Reference Scenario 124 2.7 Cumulative oil and gas export revenues in the Reference Scenario for selected key exporters 126 2.8 Oil and gas export revenues as a share of GDP at market exchange rates for selected producers in the Reference Scenario 126 2.9 Electrification rates and population without access to electricity, 2008 129 2.10 Number of people without access to electricity in the Reference Scenario 131 2.11 Incremental electricity generation and investment in the Universal Electricity Access Case, 2008-2030 134 Chapter 3. Impact of the financial crisis on energy investment 3.1 Worldwide upstream capital expenditures 146 3.2 Worldwide upstream capital expenditures by type of company 146 3.3 Exploration and development capital spending and average nominal IEA crude oil import price 148 3.4 Global asset financing of bio-refineries 152 3.5 Status of ethanol plants in Brazil 153 3.6 Historical world electricity consumption 158 3.7 Global investment in new renewables-based power-generation assets 162 3.8 Venture capital and private equity new investment in clean energy companies, 2001-2009 162 3.9 Global orders for wind turbines 163 Part B: Post-2012 climate policy framework Chapter 4. Climate change and the energy outlook 4.1 World anthropogenic greenhouse-gas emissions by source, 2005 170 4.2 World anthropogenic greenhouse-gas emissions by source in the Reference Scenario 170 22 World Energy Outlook 2009
4.3 Historical link between energy-related CO 2 emissions and economic output, and the pathway to achieving a 450 Scenario 172 4.4 Green energy components of the G20 stimulus packages, 2009-2018 173 4.5 Emissions of energy-related CO 2 in 2020 in the Reference Scenario and reductions if OECD countries meet their emissions targets 176 4.6 Per-capita energy-related CO 2 emissions in the Reference Scenario 178 4.7 Energy-related CO 2 intensity and GDP per-capita, 2007 179 4.8 Share of global annual and cumulative energy-related CO 2 emissions since 1890 in the Reference Scenario 180 4.9 Cumulative energy-related CO 2 emissions since 1890 in the Reference Scenario 180 4.10 Energy-related CO 2 emissions by region in the Reference Scenario 181 4.11 How the European Union complies with its EU ETS cap in the Reference Scenario 182 4.12 China s energy-related CO 2 emissions in the Reference Scenario 184 4.13 World energy-related CO 2 emissions from the power sector and CO 2 intensity of power plants in the Reference Scenario 185 4.14 World low-carbon electricity generation in the Reference Scenario 186 4.15 Average CO 2 intensity of new LDVs by region in the Reference Scenario 188 4.16 Industry energy-related CO 2 emissions by sub-sector in the Reference Scenario 189 4.17 Long-term concentration of atmospheric greenhouse gases resulting from the Reference Scenario 191 4.18 Comparison of the Reference Scenario emissions trajectory with relevant studies assessed by the IPCC 191 4.19 Cumulative CO 2 emissions by scenario compared to various budgets 193 Chapter 5. Energy and CO 2 implications of the 450 Scenario 5.1 Greenhouse-gas concentration trajectories by scenario 199 5.2 World greenhouse-gas emissions by type in the 450 Scenario 200 5.3 Policy framework in the 450 Scenario 202 5.4 Abatement by policy type in the 450 Scenario relative to the Reference Scenario, 2020 205 5.5 Energy-related CO 2 emission reductions by region and sector in the 450 Scenario compared with the Reference Scenario, 2020 207 5.6 Energy-related CO 2 emissions by region in the 450 Scenario 208 5.7 Per-capita energy-related CO 2 emissions in selected countries in the 450 Scenario 210 5.8 World energy-related CO 2 emission savings by policy measure in the 450 Scenario 211 5.9 World primary energy demand by fuel in the 450 Scenario 213 5.10 Biofuels demand by type and scenario 214 5.11 World electricity generation from non-hydro renewables by type in the 450 Scenario 215 5.12 Incremental world electricity demand by sector and scenario, 2007-2030 215 Table of contents 23
5.13 Net oil imports in selected regions by scenario 217 5.14 Cumulative OPEC oil-export revenues by scenario 217 5.15 Change in coal production by scenario and region 219 Chapter 6. The 450 Scenario at the sectoral level 6.1 Change in energy-related CO 2 emissions by sector and region in the 450 Scenario relative to 2007 levels 222 6.2 Change in world energy-related CO 2 emissions from the power generation sector in the 450 Scenario compared with the Reference Scenario 224 6.3 CO 2 intensity of electricity power plants 224 6.4 CO 2 emission savings by type in the power generation sector in the 450 Scenario relative to the 2007 fuel mix for selected countries 226 6.5 Average long-run marginal cost (LRMC) of selected power-generation technologies in OECD+, with and without a CO 2 price 228 6.6 Electricity generation by type for selected countries in the Reference and 450 Scenarios 232 6.7 World installed coal capacity and retirements/mothballing in the 450 Scenario 235 6.8 Regional coal-fired electricity generation by plant type and scenario 236 6.9 Energy-related CO 2 emission reductions in transport by sub-sector in the 450 Scenario compared with the Reference Scenario 237 6.10 Share of global passenger vehicle sales by engine technology and scenario 239 6.11 CO 2 emissions per kilometre by vehicle type and scenario 240 6.12 Share of global PLDV sales in 2007 and 2030 in the Reference and 450 Scenarios 244 6.13 Regional fuel consumption in road transport by fuel type and scenario 245 6.14 Share of PLDV sales by vehicle type for selected regions in the 450 Scenario 245 6.15 World industry energy consumption and energy-related CO 2 emissions by scenario 247 6.16 World average annual change in energy-related CO 2 emissions in industry by type and scenario 249 6.17 Change in OECD+ energy demand by end use in residential sector in 450 Scenario relative to the Reference Scenario 253 6.18 Change in energy-related CO 2 emissions in buildings by scenario in Other Major Economies, 2007-2030 254 Chapter 7. Costs and benefits in the 450 Scenario 7.1 Cumulative additional investment needs by sector in the 450 Scenario relative to the Reference Scenario, 2010-2030 258 7.2 Cumulative incremental investment and CO 2 savings in 2010-2030 by country/region in the 450 Scenario, relative to the Reference Scenario 261 7.3 Global annual incremental investment and CO 2 savings in the 450 Scenario relative to the Reference Scenario, 2010-2030 262 24 World Energy Outlook 2009
7.4 Cumulative incremental investment in 2010-2020, by sector and region in the 450 Scenario, relative to the Reference Scenario 263 7.5 Total global investment in renewables, nuclear, CCS and fossil fuels for the power generation in the 450 Scenario 264 7.6 Current estimates of overnight project costs of planned nuclear power plants in the United States 268 7.7 Annual investment in renewables for large-scale power generation in the 450 Scenario 270 7.8 Investment in biofuels production by scenario, 2010-2030 273 7.9 Cumulative incremental investment in transport by mode in the 450 Scenario relative to the Reference Scenario 275 7.10 Maximum potential and incremental costs of vehicle technologies for fuel savings compared with a year-2000 gasoline ICE car 276 7.11 Cumulative incremental investment in industry in the 450 Scenario relative to the Reference Scenario, 2010-2030 279 7.12 Cumulative investment in fossil-fuel supply by fuel and scenario 282 7.13 Mitigation costs of CO 2 reductions in 2030 in the 450 Scenario, relative to the Reference Scenario 283 7.14 Mitigation costs and associated CO 2 reductions by power-generation technology in 2030 in the 450 Scenario, relative to the Reference Scenario 284 7.15 Incremental investment needs and fuel-cost savings for industry, buildings and transport in the 450 Scenario relative to the Reference Scenario 288 7.16 Oil and gas import bills in selected countries/regions by scenario 289 7.17 Annual air pollution control costs by region and scenario 290 7.18 IEA government spending on energy research, development and demonstration 291 Chapter 8. Funding low-carbon growth 8.1 Global carbon market trading volumes and values 300 8.2 Share of CDM emissions reduction by type of project, 2008 301 8.3 Carbon trade and CO 2 price for power generation and industry under different levels of financing by OECD+ countries in 2020 303 8.4 Potential suppliers of carbon credits given eligibility of 1.2 Gt of non- OECD abatement in power generation and industry in the 450 Scenario relative to the Reference Scenario 304 8.5 Abatement costs incurred by OECD+ and non-oecd in the carbon market for power generation and industry under different levels of financing by OECD+ countries 305 8.6 Share of power generation output by status of utility, 2008 311 8.7 Global additional investments in the 450 Scenario compared with the Reference Scenario by sector in 2020 based on current capital ownership 312 8.8 Global additional investments in the 450 Scenario compared with the Reference Scenario by sector based on current capital ownership 312 Table of contents 25
Chapter 9: Country and regional profiles in the 450 Scenario 9.1 World energy-related CO 2 emissions 322 9.2 World energy-related CO 2 emissions abatement 323 9.3 World power-generation capacity in the 450 Scenario 323 9.4 World share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 323 9.5 World additional investment in the 450 Scenario relative to the Reference Scenario 325 9.6 OECD+ energy-related CO 2 emissions 326 9.7 OECD+ energy-related CO 2 emissions abatement 327 9.8 OECD+ power-generation capacity in the 450 Scenario 327 9.9 OECD+ share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 327 9.10 OECD+ additional investment in the 450 Scenario relative to the Reference Scenario 329 9.11 US energy-related CO 2 emissions 330 9.12 US energy-related CO 2 emissions abatement 331 9.13 US power-generation capacity in the 450 Scenario 331 9.14 US share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 331 9.15 US additional investment in the 450 Scenario relative to the Reference Scenario 333 9.16 EU energy-related CO 2 emissions 334 9.17 EU energy-related CO 2 emissions abatement 335 9.18 EU power-generation capacity in the 450 Scenario 335 9.19 EU share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 335 9.20 EU additional investment in the 450 Scenario relative to the Reference Scenario 337 9.21 Japan energy-related CO 2 emissions 338 9.22 Japan energy-related CO 2 emissions abatement 339 9.23 Japan power-generation capacity in the 450 Scenario 339 9.24 Japan share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 339 9.25 Japan additional investment in the 450 Scenario relative to the Reference Scenario 341 9.26 OME energy-related CO 2 emissions 342 9.27 OME energy-related CO 2 emissions abatement 343 9.28 OME power-generation capacity in the 450 Scenario 343 9.29 OME share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 343 9.30 OME additional investment in the 450 Scenario relative to the Reference Scenario 345 9.31 Russia energy-related CO 2 emissions 346 9.32 Russia energy-related CO 2 emissions abatement 347 9.33 Russia power-generation capacity in the 450 Scenario 347 26 World Energy Outlook 2009
9.34 Russia share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 347 9.35 Russia additional investment in the 450 Scenario relative to the Reference Scenario 349 9.36 China energy-related CO 2 emissions 350 9.37 China energy-related CO 2 emissions abatement 351 9.38 China power-generation capacity in the 450 Scenario 351 9.39 China share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 351 9.40 China additional investment in the 450 Scenario relative to the Reference Scenario 353 9.41 OC energy-related CO 2 emissions 354 9.42 OC energy-related CO 2 emissions abatement 355 9.43 OC power-generation capacity in the 450 Scenario 355 9.44 OC share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 355 9.45 OC additional investment in the 450 Scenario relative to the Reference Scenario 357 9.46 India energy-related CO 2 emissions 358 9.47 India energy-related CO 2 emissions abatement 359 9.48 India power-generation capacity in the 450 Scenario 359 9.49 India share of passenger vehicle sales by technology and average new vehicle on-road CO 2 intensity in the 450 Scenario 359 9.50 India additional investment in the 450 Scenario relative to the Reference Scenario 361 Part C: Prospects for natural gas Chapter 10. Outlook for gas demand 10.1 Year-on-year change in world primary natural gas demand by major region 367 10.2 Primary natural gas demand by region in the Reference Scenario 368 10.3 World primary natural gas demand by sector in the Reference Scenario 369 10.4 Incremental primary natural gas demand by region and sector in the Reference Scenario, 2007-2030 370 10.5 Change in primary natural gas demand by sector and region in the 450 Scenario versus the Reference Scenario, 2030 374 10.6 Natural gas intensity by scenario and region 376 10.7 World primary natural gas demand versus GDP by sector and scenario, 1980-2030 377 10.8 Primary natural gas demand in the Reference Scenario and Higher and Lower GDP Growth Cases 378 10.9 Long-run marginal cost of generation for gas-fired CCGT power plants and other technologies at different fuel prices in the OECD 381 10.10 Long-run marginal cost of generation for gas-fired CCGT power plants compared with other technologies and fuels in OECD countries in 2015-2020 382 Table of contents 27
Chapter 11. Gas resources, technology and production profiles 11.1 Typology of natural gas resources 390 11.2 Proven reserves of natural gas by region 392 11.3 Proven reserves and reserves-to-production ratio by region 393 11.4 Ultimately recoverable conventional natural gas resources by region, end-2008 395 11.5 Production of unconventional gas in the United States 398 11.6 United States shale gas plays 402 11.7 Barnett shale wells completed and gas production 404 11.8 Gas production and recovery profiles of Barnett shale horizontal wells 404 11.9 Production decline rates for Barnett shale horizontal wells 405 11.10 Projected ultimate recoverable resources of existing Barnett shale horizontal wells 406 11.11 Threshold wellhead gas price needed to yield a 10% return on capital in the main producing counties of the Barnett Shale 407 11.12 Hypothetical production profile of a new gas shale play, based on the typical profile of Barnett shale wells 409 11.13 Sensitivity of threshold wellhead price to increases in gas recovery and variations in capital cost per well 411 11.14 Gas hydrate resource triangle 412 11.15 Long-term gas-supply cost curve 416 11.16 World gas production from selected super-giant and giant fields, by field vintage 418 11.17 Associated and non-associated gas production from selected super-giant and giant fields 419 11.18 Typical gas production profiles by category of field 422 Chapter 12. Outlook for gas supply and investment 12.1 Natural gas production by region in the Reference Scenario 427 12.2 Change in natural gas production by major country in the Reference Scenario 428 12.3 World natural gas production by field vintage in the Reference Scenario 430 12.4 World natural gas production by type in the Reference Scenario 431 12.5 Net inter-regional natural gas trade flows between major regions in the Reference Scenario, 2007, 2015 and 2030 435 12.6 Transportation capacity between major regions in the Reference Scenario 436 12.7 Inter-regional natural gas exports and imports by producing and importing region in the Reference Scenario 438 12.8 World inter-regional natural gas trade by type in the Reference Scenario 439 12.9 Natural gas liquefaction capacity in operation and under construction 439 12.10 Liquefied natural gas capacity 442 12.11 Change in natural gas production by region in the 450 Scenario compared with the Reference Scenario 443 12.12 Natural gas trade by scenario, 2030 445 12.13 Breakdown of cumulative investment in gas-supply infrastructure by activity in the Reference Scenario, 2008-2030 446 28 World Energy Outlook 2009
12.14 Change in cumulative investment in gas-supply infrastructure by region and activity in the 450 Scenario compared with the Reference Scenario, 2008-2030 446 12.15 IEA Upstream Investment Cost Index and annual inflation rate 449 12.16 Oil price and upstream costs, 2000-2008 450 12.17 Relationships between upstream cost components and oil and gas prices 450 12.18 LNG liquefaction plant capital costs 451 Chapter 13. Regional analysis 13.1 North American natural gas demand by sector in the Reference Scenario 454 13.2 North American natural gas demand by sector in the 450 Scenario 455 13.3 United States natural gas supply in the Reference Scenario 456 13.4 United States average gas price and drilling activity 457 13.5 North American natural gas supply in the Reference Scenario 458 13.6 Selected natural gas import prices versus Russian average export price 461 13.7 Energy intensity of GDP in selected countries and regions 463 13.8 Russia s gas balance, 2008 465 13.9 Eurasian main gas production areas and pipeline routes 466 13.10 Russia s gas production by source in the Reference Scenario 469 13.11 Projected Russian gas exports to Europe and potential growth in gas export capacity 470 13.12 Turkmenistan gas-export price and the European netback market value 472 13.13 OECD Europe gas demand by sector in the Reference Scenario 477 13.14 OECD Europe gas production by source in the Reference Scenario 479 13.15 Indicative costs for potential new sources of gas delivered to Europe, 2020 482 13.16 Indicative cost curves for new supplies to selected European gas markets, 2020 485 13.17 Natural gas balance in the Middle East by scenario 486 13.18 Qatari and Iranian gas infrastructure 488 13.19 Natural gas production in selected Middle Eastern countries by scenario 495 13.20 Net exports of African natural gas by scenario 499 13.21 Natural gas balance in China by scenario 503 Chapter 14: Prospects for natural gas pricing 14.1 Oil and natural gas prices in the United States 512 14.2 How oil prices affect gas prices in North America 513 14.3 Monthly oil and natural gas prices in the United States 514 14.4 Illustration of netback market-value pricing 516 14.5 Gas trading hubs in Continental Europe 518 14.6 Average spot natural gas prices in Australia, the United States and the United Kingdom 524 14.7 Actual gas prices and the economic value of gas in power generation in the Middle East and North Africa, 2006 525 14.8 Average international oil and gas company LNG self-contracting commitments, 2012-2015 527 Table of contents 29
14.9 LNG contract start-up years and durations 528 14.10 Spot LNG trade by country 528 Part D: Energy prospects in Southeast Asia Chapter 15. Overview of energy trends in Southeast Asia 15.1 Key energy challenges in each ASEAN country 537 15.2 ASEAN population by country 542 15.3 ASEAN retail prices of gasoline and diesel by country, August 2009 543 15.4 ASEAN primary energy demand by fuel in the Reference Scenario 544 15.5 ASEAN total final consumption by sector in the Reference Scenario 546 15.6 ASEAN vehicle ownership and fleet in the Reference Scenario 547 15.7 ASEAN oil production by country in the Reference Scenario 549 15.8 ASEAN oil net-import dependence by country in the Reference Scenario 550 15.9 Spending on oil imports as a share of GDP at market exchange rates in ASEAN by country in the Reference Scenario 551 15.10 ASEAN gas production by country in the Reference Scenario 552 15.11 ASEAN generation capacity by country and fuel in the Reference Scenario 557 15.12 ASEAN efficiency improvements in coal-fired generation in the Reference Scenario 558 15.13 ASEAN energy-related CO 2 emissions by country in the Reference Scenario 563 15.14 ASEAN energy-related CO 2 emissions reduction by source in the 450 Scenario compared with the Reference Scenario 569 15.15 Existing and proposed ASEAN Power Grid interconnections 573 15.16 The Trans-ASEAN Gas Pipeline 575 Chapter 16. ASEAN-4 country profiles 16.1 Indonesia s primary energy demand by fuel in the Reference Scenario 586 16.2 Indonesia s PLDV ownership and fleet in the Reference Scenario 587 16.3 Indonesia s oil balance in the Reference Scenario 589 16.4 Indonesia s natural gas balance in the Reference Scenario 590 16.5 Indonesian coal production by type and hard coal net exports in the Reference Scenario 591 16.6 Indonesia s electricity generation by fuel in the Reference Scenario 592 16.7 Thailand s primary energy demand by fuel in the Reference Scenario 598 16.8 Malaysia s primary energy demand by fuel in the Reference Scenario 605 16.9 Malaysia s final energy consumption by sector in the Reference Scenario 606 16.10 Malaysia s electricity generation by fuel in the Reference Scenario 610 16.11 Philippines primary energy demand by fuel in the Reference Scenario 614 16.12 Philippine installed electricity generation capacity in the Reference Scenario 617 30 World Energy Outlook 2009
List of tables Introduction 1 Selected major new energy-related government policies taken into account in the Reference Scenario 56 2 Population growth by region 57 3 Real GDP growth by region 62 4 Fossil-fuel price assumptions in the Reference Scenario 64 Part A: Global energy trends to 2030 Chapter 1. Global energy trends in the Reference Scenario 1.1 World primary energy demand by fuel in the Reference Scenario 74 1.2 Primary energy demand by region in the Reference Scenario 76 1.3 Primary oil demand by region in the Reference Scenario 81 1.4 Oil production and supply by region/country in the Reference Scenario 83 1.5 Primary coal demand by region in the Reference Scenario 90 1.6 Coal production by region in the Reference Scenario 91 1.7 Net inter-regional hard coal trade by region in the Reference Scenario 94 1.8 Final electricity consumption by region in the Reference Scenario 96 1.9 Projected capacity additions and investment in power infrastructure by region in the Reference Scenario 103 1.10 Cumulative investment in energy-supply infrastructure by region in the Reference Scenario, 2008-2030 105 Chapter 2. Implications of current energy policies 2.1 Emissions of major air pollutants by region in the Reference Scenario 114 2.2 Net inter-regional oil trade in the Reference Scenario 116 2.3 Key global oil transit choke points 118 2.4 Electricity access in the Reference Scenario 132 Chapter 3. Impact of the financial crisis on energy investment 3.1 Total investment plans of 50 leading oil and gas companies 140 3.2 Major upstream oil and gas projects deferred by at least 18 months, suspended or cancelled 142 3.3 Major oil refinery projects deferred by at least 18 months, suspended or cancelled 149 3.4 Status of biofuel-production capacity worldwide 154 3.5 Production, exports and investment of 25 leading coal companies 155 3.6 Electricity demand growth rates for selected countries 157 Part B: Post-2012 climate policy framework Chapter 4. Climate change and the energy outlook 4.1 Examples of new policies incorporated in the Reference Scenario 173 4.2 National greenhouse-gas emissions goals in OECD countries 175 Table of contents 31
4.3 World s 40 biggest emitters of energy CO 2 per capita, 2007 177 4.4 Energy-related CO 2 emissions by sector in the Reference Scenario 185 4.5 Installed nuclear capacity by region in the Reference Scenario 187 4.6 Cumulative CO 2 budgets for 2000-2049 corresponding with probabilities of keeping the global temperature increase below 2 Celsius 193 Chapter 5. Energy and CO 2 implications of the 450 Scenario 5.1 World greenhouse-gas emissions trajectories in the 450 Scenario 200 5.2 Fossil-fuel price assumptions in the 450 Scenario 204 5.3 CO 2 savings due to national policies and measures and sectoral approaches, 2020 206 5.4 Domestic CO 2 emissions by region in the 450 Scenario 210 5.5 World primary energy demand by fuel in the 450 Scenario 212 5.6 Net natural gas imports in key importing regions by scenario 218 Chapter 6. The 450 Scenario at the sectoral level 6.1 Electricity generation by fuel and region in the 450 Scenario 229 6.2 Capacity additions by fuel and region in the 450 Scenario 234 6.3 World transport energy consumption by fuel and energy-related CO 2 emissions in the 450 Scenario 243 6.4 World industry energy consumption by fuel and energy-related CO 2 emissions in the 450 Scenario 250 6.5 World buildings energy consumption by fuel and energy-related CO 2 emissions in the 450 Scenario 251 Chapter 7. Costs and benefits in the 450 Scenario 7.1 World cumulative incremental investment (2010-2030) and CO 2 savings (2030) in power generation and biofuels supply in the 450 Scenario, relative to the Reference Scenario 259 7.2 World cumulative incremental investment (2010-2030) and CO 2 savings (2030) in end use in the 450 Scenario, relative to the Reference Scenario 259 7.3 Change in cumulative power-plant investment and capacity in the 450 Scenario relative to the Reference Scenario 265 7.4 Cumulative investment in power plant by country/region in the 450 Scenario 266 7.5 Cumulative investment in renewables, CCS and nuclear power by country/region in the 450 Scenario 266 7.6 Nuclear capacity under construction as of end-august 2009 267 7.7 Investment and generating costs of renewables for power generation in the 450 Scenario 270 7.8 The top ten wind turbine suppliers, by global market share 271 7.9 Cumulative incremental investment in 2010-2030 in renewable energy in buildings, in the 450 Scenario relative to the Reference Scenario 280 7.10 Average annual incremental investment by country/region and sector in the 450 Scenario relative to the Reference Scenario, 2010-2020 281 32 World Energy Outlook 2009
7.11 Average annual incremental investment by country/region and sector in the 450 Scenario relative to the Reference Scenario, 2021-2030 281 7.12 Emissions of major air pollutants by region in the 450 Scenario 287 7.13 Estimated life-years lost due to exposure to anthropogenic emissions of PM2.5 288 Chapter 8. Funding low-carbon growth 8.1 Incremental investment needs by region and sector in the 450 Scenario relative to the Reference Scenario in 2020 295 8.2 Financial support from OECD+ to non-oecd countries under different funding assumptions, 2020 297 8.3 Financial support of specific abatement measures in selected sectors in non-oecd countries under different funding assumptions, 2020 298 8.4 World Bank climate funds and facilities, end-2008 309 8.5 National proposals for raising international funds for mitigation and adaptation 310 Chapter 9: Country and regional profiles in the 450 Scenario 9.1 World key indicators 322 9.2 World energy demand and electricity generation 324 9.3 OECD+ key indicators 326 9.4 OECD+ energy demand and electricity generation 328 9.5 US key indicators 330 9.6 US energy demand and electricity generation 332 9.7 EU key indicators 334 9.8 EU energy demand and electricity generation 336 9.9 Japan key indicators 338 9.10 Japan energy demand and electricity generation 340 9.11 OME key indicators 342 9.12 OME energy demand and electricity generation 344 9.13 Russia key indicators 346 9.14 Russia energy demand and electricity generation 348 9.15 China key indicators 350 9.16 China energy demand and electricity generation 352 9.17 OC key indicators 354 9.18 OC energy demand and electricity generation 356 9.19 India key indicators 358 9.20 India energy demand and electricity generation 360 Part C: Prospects for natural gas Chapter 10. Outlook for gas demand 10.1 Primary natural gas demand by region in the Reference Scenario 366 10.2 Primary natural gas demand by region in the 450 Scenario 373 Table of contents 33
10.3 Summary of main drivers of gas demand by sector 375 10.4 Assumed cost and technical parameters of power plants in the OECD starting commercial operation in 2015-2020 381 10.5 World primary natural gas demand in the Reference Scenario and the Higher and Lower Energy Prices Cases 385 Chapter 11. Gas resources, technology and production profiles 11.1 Major conventional gas discoveries and reserve additions, 2008 394 11.2 Conventional natural gas resources by region, end-2008 395 11.3 Global unconventional natural gas resources in place 397 11.4 Principal physical properties of the leading shale-gas plays in North America 408 11.5 The world s biggest conventional gas fields by peak production 420 11.6 The world s biggest conventional gas fields by initial reserves 420 11.7 Plateau production characteristics by size, location and type of gas field 423 11.8 Production-weighted, average observed decline rates by size, location and type of gas field 423 Chapter 12. Outlook for gas supply and investment 12.1 Natural gas production by country/region in the Reference Scenario 429 12.2 Flared gas based on satellite data 431 12.3 Net inter-regional natural gas trade in the Reference Scenario 434 12.4 Natural gas liquefaction capacity 440 12.5 Natural gas liquefaction capacity to be commissioned in 2009-2013 441 12.6 Natural gas production by country/region in the 450 Scenario 444 12.7 Cumulative investment in gas-supply infrastructure by region and activity in the Reference Scenario, 2008-2030 447 Chapter 13. Regional analysis 13.1 North American existing and planned LNG import capacity 459 13.2 Selected current and prospective gas fields in Russia 467 13.3 Natural gas production of Caspian region producers and Russia in the Reference Scenario 471 13.4 Europe s gas balance by scenario 478 13.5 LNG supplies and indicative total costs for new supplies to Europe, 2020 481 13.6 Pipeline routes, assumptions and indicative costs for new supplies to Europe, 2020 483 13.7 Major gas projects in Qatar based on North Field gas reserves 489 13.8 South Pars development phases 492 13.9 Africa s proven natural gas reserves and production 498 13.10 Algeria s gas export capacity 500 13.11 Australian LNG projects 502 34 World Energy Outlook 2009
Chapter 14: Prospects for natural gas pricing 14.1 Composition of wholesale gas transactions by price-formation mechanism and region, 2007 510 14.2 Impacts of changes in oil prices on gas prices in the United States 512 Part D: Energy prospects in Southeast Asia Chapter 15. Overview of energy trends in Southeast Asia 15.1 Key energy indicators for ASEAN by country 538 15.2 Energy sector overview for ASEAN by country 539 15.3 ASEAN key economic indicators and GDP growth assumptions by country in the Reference Scenario 540 15.4 ASEAN oil refining capacity and planned additions by country 549 15.5 ASEAN existing and planned LNG infrastructure 553 15.6 Plans for nuclear power plant construction in ASEAN by country 558 15.7 Current status of the ASEAN power utilities by country 560 15.8 ASEAN electricity access by country, 2008 561 15.9 Biofuels policies in selected ASEAN countries 562 15.10 ASEAN emissions of major pollutants in the Reference Scenario 565 15.11 ASEAN cumulative investment in energy-supply infrastructure in the Reference Scenario 566 15.12 ASEAN primary energy demand in the 450 Scenario 568 15.13 ASEAN Plan of Action for Energy Co-operation, 2010-2015 571 15.14 Existing bilateral gas pipeline interconnections 574 15.15 Planned gas pipeline interconnections 576 Chapter 16. ASEAN-4 country profiles 16.1 Key energy indicators for Indonesia 582 16.2 GDP and population growth assumptions in Indonesia in the Reference Scenario 583 16.3 Indonesia s energy-related CO 2 and local air pollutant emissions in the Reference Scenario 593 16.4 Key energy indicators for Thailand 594 16.5 GDP and population growth assumptions in Thailand in the Reference Scenario 595 16.6 Thailand s energy-related CO 2 and local air pollutant emissions in the Reference Scenario 601 16.7 Key energy Indicators for Malaysia 602 16.8 GDP and population growth assumptions in Malaysia in the Reference Scenario 603 16.9 Malaysia s energy-related CO 2 and local air pollutant emissions in the Reference Scenario 611 16.10 Key energy indicators for Philippines 611 16.11 GDP and population growth assumptions in Philippines in the Reference Scenario 612 16.12 Philippine energy-related CO 2 and local air pollutant emissions in the Reference Scenario 618 Table of contents 35
List of boxes Introduction 1 To what extent are high oil prices to blame for the economic crisis? 60 Part A: Global energy trends to 2030 Chapter 1. Global energy trends in the Reference Scenario 1.1 Interpreting the Reference Scenario results 75 1.2 Impact of falling investment on oilfield decline rates 86 1.3 Changes in power-generation projections in this year s Outlook 98 Chapter 2. Implications of current energy policies 2.1 The future of the IEA oil emergency response mechanisms 119 2.2 The 2009 Russia-Ukraine gas dispute 121 2.3 The implications of phasing out energy subsidies 125 2.4 The Universal Electricity Access Case 132 Chapter 3. Impact of the financial crisis on energy investment 3.1 How has the crisis affected energy demand so far? 137 Part B: Post-2012 climate policy framework Chapter 4. Climate change and the energy outlook 4.1 Embedded energy 179 4.2 Analysis of the EU ETS in the Reference Scenario 182 4.3 Environmental impacts of a 6 C temperature rise 192 Chapter 5. Energy and CO 2 implications of the 450 Scenario 5.1 Key new features of WEO-2009 climate change analysis 197 5.2 Carbon markets and carbon prices in the 450 Scenario 208 Chapter 6. The 450 Scenario at the sectoral level 6.1 The policy framework for the power generation sector in the 450 Scenario 223 6.2 The policy framework for the transport sector in the 450 Scenario 238 6.3 Fuel-pricing policy and its impact on the sectoral agreement 240 6.4 The policy framework for the industry sector in the 450 Scenario 248 6.5 The policy framework for the buildings sector in the 450 Scenario 252 Chapter 7. Costs and benefits in the 450 Scenario 7.1 Calculating the investment needs 260 7.2 Uncertainties about calculating mitigation costs for transport 285 36 World Energy Outlook 2009
Chapter 8. Funding low-carbon growth 8.1 WEO-2009 carbon-flow modelling 302 8.2 Negative-cost efficiency investments? Turning potential into reality 315 8.3 Financing research and development of clean energy 316 8.4 Greening the national tax system 317 Part C: Prospects for natural gas Chapter 10. Outlook for gas demand 10.1 The potential for natural gas vehicles 371 Chapter 11. Gas resources, technology and production profiles 11.1 Resource and reserve definitions 392 11.2 Assessments of unconventional resources 396 11.3 Shale-gas production technology 401 11.4 The IEA field-by-field gas production database 418 11.5 Defining field production profiles, plateaus and decline rates 421 Chapter 12. Outlook for gas supply and investment 12.1 Modelling natural gas production and trade in WEO-2009 426 Chapter 13. Regional analysis 13.1 Azerbaijan: a tale of higher GDP and lower energy demand 464 13.2 South Yolotan/Osman: a Turkmen super-giant 474 13.3 Qatar s booming LNG industry 490 Chapter 14: Prospects for natural gas pricing 14.1 Pricing mechanisms defined 511 14.2 The mechanics of netback market value pricing 516 14.3 Evolution of the pricing of Japan s LNG imports 520 14.4 The Australian gas market: a case study of competitive pricing in Asia-Pacific 523 Part D: Energy prospects in southeast Asia Chapter 15. Overview of energy trends in Southeast Asia 15.1 Nuclear power: what role could it play in ASEAN? 545 15.2 Energy strategy for an island state: Singapore 547 15.3 Bypassing piracy in the Strait of Malacca 551 15.4 Territorial claims in the South China Sea 555 15.5 Increasing the role of renewables in Southeast Asia 564 Chapter 16. ASEAN-4 country profiles 16.1 The important role of PETRONAS in the Malaysian economy 608 16.2 Geothermal in Philippines 617 Table of contents 37
List of spotlights Part A: Global energy trends to 2030 Chapter 1. Global energy trends in the Reference Scenario How do the energy demand projections compare with WEO-2008? 77 Chapter 2. Implications of current energy policies Do energy producers need greater security of demand? 127 Chapter 3. Impact of the financial crisis on energy investment Canadian oil sands: is the boom over or taking a breather? 147 Part B: Post-2012 climate policy framework Chapter 4. Climate change and the energy outlook Is the financial crisis an unexpected opportunity to step up the climate change effort? 171 Chapter 5. Energy and CO 2 implications of the 450 Scenario Other possible stabilisation targets where does the current debate stand? 198 Chapter 7. Costs and benefits in the 450 Scenario CO 2 savings for free? 277 Part C: Prospects for natural gas Chapter 10. Outlook for gas demand Does carbon pricing mean more or less gas use? 384 Chapter 11. Gas resources, technology and production profiles What might prevent the take-off of unconventional gas production worldwide? 415 Chapter 12. Outlook for gas supply and investment Is peak gas on the horizon? 433 Chapter 14: Prospects for natural gas pricing Is the Gas Exporting Countries Forum the new Gas-OPEC? 530 Part D: Energy prospects in Southeast Asia Chapter 15. Overview of energy trends in Southeast Asia Time for Southeast Asia to reduce its reliance on exports for growth? 541 38 World Energy Outlook 2009