Energy Market in Asia-Pacific and Canada s Potential for Natural Gas Export Shahidul Islam
Objective Examine energy demand in Asia-Pacific Especially natural gas Canada s natural gas situation Potential for natural gas export to Asia-Pacific
Asia-Pacific Common characteristics Nearly half of world s population Fastest growing economies - overall Differentiated economy and growth Social and political differences Geographical differences
Asia-Pacific Region
Asia-Pacific: Energy sector Fastest growing energy demand Differentiated / fragmented demand Deficient, Dispersed, Disjointed energy supply Net importer differentiated imports Mixed market forces private companies & national companies
Asia-Pacific: Energy Sector Fragmented / differentiated Highly deficient Japan Surplus Australia, Brunei Changing Indonesia, China,
Asia-Pacific: Energy Market Complicated Geographic, demographic, economic and political factors Toward more centralized market national companies Lack of basic services in many economies Overall demand continues to grow increasingly becoming deficient
Asia-Pacific: Energy Demand Primary energy consumption grew over 300% in 30 years (compared to 85% in world) Higher energy price relative to other regions Imports higher concentration of energy Increased consumption from renewables Continues to use traditional (bio-fuel)
Asia-Pacific: Energy demand 6000.0 5000.0 Primary Energy Consumption (mtoe) 4000.0 3000.0 (1120%) 2000.0 1000.0-1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Asia-Pacific: Energy Demand 3000.0 2500.0 2000.0 1500.0 Oil (mt) Coal (mtoe) Gas (mtoe) Nuclear (mtoe) 1000.0 500.0-1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Asia-Pacific: Energy Consumption Asia-Pacific during the past 30 years World 1984 2014 Increase 1984 2014 Increase Oil (mt) 506.9 1428.0 181.7% 2814.5 4211.1 49.6% Gas (mtoe) 89.9 610.7 579.3% 1435.7 3065.5 113.5% Coal (mtoe) 610.5 2776.6 354.8% 1913.3 3881.8 102.9% Electricity (twh)* 1741.8 10080.8 478.8% 9955.7 23536.5 136.4% Nuclear (mtoe) 37.9 82.5 117.7% 281.6 574.0 103.8% Hydro (mtoe) 67.3 341.6 407.6% 440.0 879.0 99.8% Primary energy (mtoe) *1985 generation; Source: BP, 2015 1316.6 5334.6 305.2% 6981.1 12928.4 85.2%
Asia-Pacific: Energy Supply Proven reserve - small Oil 2% nearly half in China Gas 8% Australia, China, Indonesia Coal 30% China, Australia, India, Indonesia
Asia-Pacific: Energy Supply Supply also grew domestic production Oil China, India, Indonesia, Malaysia, Australia, Thailand, Vietnam Gas China, Indonesia, Australia, Pakistan, Malaysia Coal China, Indonesia, India, Australia Nuclear Japan (Fukushima in 2011) Hydro China, India, Japan Bio-fuel Bangladesh, China, India, Indonesia, Pakistan, Vietnam
Asia-Pacific: Energy production 3000.0 2500.0 2000.0 1500.0 Oil (mt) Gas (mtoe) Coal (mtoe) 1000.0 500.0-1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Asia-Pacific: Energy Production Asia-Pacific World 1984 2014 Increase 1984 2014 Increase Oil (mt) 280.0 396.7 41.7% 2818.7 4220.6 49.7% Gas (mtoe) 89.8 478.1 432.4% 1443.2 3127.3 116.7% Coal (mt) 1192.0 5606.5 370.3% 4255.5 8164.9 91.9% CO2 (mt) 4184.4 26817.0 105.5% 19921.9 35498.7 78.2% Source: BP, 2015 Does increased production satisfy increased demand?
Asia-Pacific: Oil Import (mt, 2014) Production Consumption Import Import % China 211.4 520.3 308.9 59.37 India 41.9 180.7 138.8 76.81 Indonesia 41.2 73.9 32.7 44.25 Japan - - - 196.8 196.8 100.00 Malaysia 30.3 35.2 4.9 13.92 Other 52.2 369.3 317.1 85.87 Total AP 396.7 1376.2 998.9 72.58 World 4220.6 4211.1 % of world 8.9 32.7
Asia-Pacific: Gas import (2014) Production Consumption Import % import China 121.0 166.9 45.9 27.50 India 28.5 45.6 17.1 37.50 Indonesia 66.1 34.5-31.6-91.59 Japan - - - 101.2 101.2 100.00 Malaysia 59.8 36.9-22.9 62.06 Other 152.9 195.0 42.1 21.59 Total AP 428.3 580.1 151.8 26.17 World 3127.3 3065.5 % of world 13.7 18.9
Asia-Pacific: Coal import (2014) Production Consumption Import % import China 1844.6 1962.4 117.8 6.00 India 243.5 360.2 116.7 32.40 Indonesia 281.7 60.8-221.1-363.65 Japan 0.7 126.5 126.2 99.45 Malaysia - - - 15.9 15.9 100.00 Other 68.7 205.5 136.8 66.57 Total AP 2439.2 2731.3 292.1 10.69 World 3933.5 3881.8 % of world 62.0 70.4
Asia-Pacific: Energy import Inherently deficient Lower reserve Lower production with higher intensity Oil production already surpassed peak Gas and coal likely to surpass soon Sustained deficit may even increase BP forecasts similar scenario
Asia-Pacific: Energy Deficit (mtoe) Actual Forecast 1990 2000 2010 2014 2015 2020 2025 2030 2035 Oil 339.6 615.8 890.3 998.9 1068.9 1220.9 1394.9 1541.3 1656.4 Gas 3.3 16.3 68.2 151.8 159.2 227.3 341.6 396.2 383.9 Coal 10.0 24.0-29.6 292.1 81.6 53.6 102.3 156.0 182.8 Total 352.9 656.1 928.9 1442.8 1309.7 1501.8 1838.8 2093.5 2223.1 Source: BP, 2015 What may (should) happen???
Asia-Pacific: What lies ahead? 1. Internal production 2. Import diversification 3. Production diversification emphasis on renewables 4. Demand management Efficiency Lifestyle Fuel substitution
1. Internal production Already at a much higher rate higher reserve to production ratio Oil production already peaked Gas and coal are on the way, if not already Limited opportunity!!!
Asia-Pacific: Fossil fuel production 3000.0 2500.0 2000.0 1500.0 Oil (mt) Gas (mtoe) Coal (mtoe) 1000.0 500.0-1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
2. Import diversification Importing from many sources some indication further potential exists May provide higher import security or less risk Import dependent Subject to price variability Economic uncertainty
3. Production diversification Indication of some degree potential exists, especially on renewable More emphasis is coming due not only to energy scarcity but also to climate concern Paris Agreement 2015 Solar, wind, hydro Nuclear has a gloomy history Biofuel scarcity is increasing
4. Demand Energy efficiency World-wide phenomenon energy efficiency AP to participate auto, electronic, etc. Coordinated R & D Lack of financial and institutional ability
4. Demand Lifestyle More important Refrain from waste appropriate market mechanism R & D - Technology for on-demand and appropriate amount of energy use Substitution
4. Demand Fuel substitution Oil vs. gas vs. electric Duel-fuel capacity Oil and gas Oil and electricity These all can have some effect, but gap between energy production and consumption in the region will remain and likely will widen.
Fuel consumption reduction effort Country Nature of target Base year Target year Japan Reduce energy intensity by 30% 2003 2030 Brazil Reduce projected power consumption by 10% 2011 2030 China Reduce energy intensity by 16% 2011 2015 India Improve energy efficiency by 20% 2007 2012 Thailand Reduce energy intensity by 25% 2005 2030 Philippines Reduce total annual energy demand of all sectors by 10% 2009 2030 Source: Doshi and Zahur, 2013
Asia-Pacific: Gas Both demand and production continue to increase East Asia Japan and South Korea experience the highest consumption growth China experiences substantial growth in both production and consumption Several countries have reached pick and are experiencing a decline in production
Asia-Pacific: Gas Consumption 700.0 600.0 500.0 400.0 300.0 East Asia India China Indonesia 200.0 100.0-1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Asia-Pacific: Gas Reserve (2014) Country/Region Reserve (tcm) Australia 3.7 China 3.5 India 1.4 Indonesia 2.9 Malaysia 1.1 Other 2.6 Total 15.2 (8.2%) World 186.5
Asia-Pacific: Gas Production (2014) Country Production (mtoe) Australia 49.8 Bangladesh 21.2 Brunei 10.7 China 121.0 India 28.5 Indonesia 66.1 Malaysia 59.8 Myanmar 15.2 Pakistan 37.8 Thailand 37.9 Vietnam 9.2 Other 21.0 Total 478.1 (15.29%) World 3127.3
Asia-Pacific: Gas import (2014) Production Consumption Import % import China 121.0 166.9 45.9 27.50 India 28.5 45.6 17.1 37.50 Indonesia 66.1 34.5-31.6-91.59 Japan - - - 101.2 101.2 100.00 Malaysia 59.8 36.9-22.9-62.06 Other 152.9 195.0 42.1 21.59 Total AP 428.3 580.1 151.8 26.17 World 3127.3 3065.5 % of world 13.7 18.9
Gas import sources Billion Cubic Meters 2009 2010 2011 2012 2013 2014 US 0.9 1.2 1.3 0.5 0.0 0.3 Trinidad &Tobago 1.9 2.3 3.8 1.9 1.6 1.2 Peru 0.2 2.0 1.5 1.7 0.1 Norway 0.2 0.9 0.7 0.7 0.9 Europe 0.2 0.9 0.8 3.8 Russian Federation 6.2 13.3 14.4 14.8 14.2 14.5 Oman 10.1 10.4 10.8 11.2 11.4 10.4 Qatar 29.9 36.3 48.6 66.5 75.0 74.4 United Arab Emirates 6.9 7.6 7.9 7.5 7.4 8.0 Yemen 0.3 3.5 5.4 5.9 8.2 8.3 Algeria 0.2 0.1 0.3 0.9 1.3 2.6 Angola 0.3 0.4 Egypt 1.0 1.9 3.0 3.8 3.0 0.4 Equatorial Guinea 4.2 3.2 4.0 4.5 5.1 4.4 Nigeria 2.3 3.6 7.6 13.1 12.1 13.3
Asia-Pacific: Gas Import dependency remains amount depends of several other factors all those discussed. Countries exporting natural gas to Asia-Pacific and countries having potential will continually look for their market share Canada could certainly try to obtain its share How much its potential also depends on it availability and competing ability
Canada: Energy Net exporter oil and gas primarily to US Potential for Asia-pacific Second market for Canadian goods GDP growth World investment Majority of middle class Free trade agreement with Asian countries
Canada: Natural Gas Reserve and production (2tcm, 160bcm) Currently exports to and imports from US Two broad problems Liquefaction and transportation problem International competition
20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 - Gas production: Canada (Bcf/day) 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Conclusion Energy deficiency in Asia-Pacific is to continue and likely to increase Efforts are being made to mitigate fossil energy consumption Demand management energy efficiency, import diversifications Supply management alternative sources (renewables)
Conclusion Australia is to satisfy a huge amount of this region s demand Prospect for Canadian natural gas to Asia- Pacific market exists but with stiff competition Canada, being relatively behind in this competition, has less advantage Should Canada try? Of course, and if it does so, sooner the better
Thank You Very Much???????