World Oil Demand: Key Trends and Uncertainties Nicola Pochettino Senior Energy Analyst International Energy Agency
World Primary Energy Demand 7 000 6 000 Oil Mtoe 5 000 4 000 3 000 Natural gas Coal 2 000 Other renewables 1 000 Nuclear power Hydro power 0 1970 1980 1990 2000 2010 2020 2030 Fossil fuels account for almost 90% of the growth in energy demand between now and 2030
Increase in Primary Oil Demand, 2004-2030 22 17 12 mb/d 7 2-3 OECD Non-OECD Power generation Industry Transport Other Most of the increase in oil demand comes from the transport sector especially in OECD countries
Road Vehicle Stock 800 600 million 400 200 0 2004 2030 OECD non-oecd The vehicle stock increases much faster in non-oecd regions, though most vehicles will still be in the OECD in 2030
World Transportation Oil Demand 40 35 2004 30 mb/d 25 20 1971 15 17 27 37 47 57 GDP (billion 2004 US$ using PPPs) Oil demand for transport increases very closely in line with GDP in all regions
Incremental CO2 emissions in the Transport Sector, 2004-2030 16 000 million tonnes of CO 2 12 000 8 000 4 000 0 Total CO2 emissions World transport emissions Non-OECD transport emissions Transport accounts for a quarter of total CO2 emissions increase, most of which will come from Non-OECD
World Light Oil Product Demand and Average Crude Oil Quality mb/d API 2004 2010 2020 2030 World Light Oil Product Demand Average Crude Oil Quality Oil quality will fall while light product demand will rise - a key challenge for the refining industry
China Oil Supply Balance 15 80% 12 60% mb/d 9 6 40% 20% 3 0% 0-20% 1990 2000 2010 2020 2030 Production Demand Imports as % of demand (right axis) China s oil imports will soar from less than 3 mb/d now to almost 10 mb/d in 2030 equal to around ¾ of domestic demand
Reference Scenario Results High oil-demand growth driven largely by the transport sector Lightening of product barrel vs. worsening of crude oil supply quality Increasing reliance on a small number of Middle East producers Increasing CO 2 emissions An unsustainable future with current policies
World Alternative Policy Scenario Endorsed by G8 leaders in Gleneagles Analyses impact of new environmental and energy-security policies worldwide OECD: Policies currently under consideration Non-OECD: Also includes more rapid declines in energy intensity resulting from faster deployment of more-efficient technology Impact on fuel-mix, environment & cost
World Alternative Policy Scenario Main Policies for Transport Improve vehicle fuel efficiency (e.g. strengthen of US CAFE standards, prolongation of Chinese standards) Increased sales of alternative fuel vehicles and fuels (e.g. biofuels in Europe, Brazil) Mode switching (e.g. increased high speed rail in Japan)
Reduction in Oil Demand in the Alternative vs. Reference Scenario, 2030 Power generation 8% Other 4% Residential and services 11% Industry 13% Transport 64% Oil savings = 12.8 mb/d Oil savings in 2030 would be equivalent to the combined current production of Saudi Arabia and Kuwait
OECD CO 2 Emissions in the Reference and Alternative Scenarios 16 000 15 000 Mt of CO 2 14 000 13 000 12 000 11 000 1990 2000 2010 2020 2030 Reference Scenario Alternative Scenario OECD CO 2 emissions peak around 2020 25% higher than in 1990
Contributory Factors in CO 2 Reduction 2004-2030 100% 80% 60% 5% 10% 20% 7% 8% 12% 21% 10% 21% 15% 1% 5% 4% 17% 7% 40% 20% 63% 67% 58% 49% 0% World OECD Transition economies Developing countries End-use efficiency gains Fuel switching in end uses Increased renewables in power generation Increased nuclear in power generation Changes in the fossil-fuel mix in power generation Improvements in end-use efficiency contribute for more than half of decrease in emissions, and renewables use for 20%
Conclusions On current policies, world energy needs will increase substantially Fossil fuels will continue to dominate the energy mix Projected market trends raise serious concerns Increased vulnerability to supply disruptions Rising CO 2 emissions Huge energy-investment needs More vigorous policies would curb rate of increase in energy demand and emission significantly But a truly sustainable energy system will call for faster technology development & deployment
World Energy Outlook 2005 Answers the question: how much oil and gas will the Middle East and North Africa export through to 2030? Focuses on Saudi Arabia, Iran, Iraq, Kuwait, the UAE, Qatar, Egypt, Libya and Algeria Analyses three distinct scenarios: Reference, Deferred Investment and Alternative Policy Draws implications for global energy markets, international oil and gas prices and energy security Released on 7 th November