© OECD/IEA - 2009© OECD/IEA - 2009

© OECD/IEA - 2009

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

1980 1990 2000 2010 2020 2030

Mto

e

Other renewables

Hydro

Nuclear

Biomass

Gas

Coal

Oil

World energy demand expands by 45% between now and 2030 – an average rate of increase of 1.6% per year – with coal accounting for more than a third of the overall rise

World primary energy demand in tWorld primary energy demand in the he Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!World primary energy demand in tWorld primary energy demand in the he Reference Scenario: this is unsustainable!Reference Scenario: this is unsustainable!

© OECD/IEA - 2009

The continuing importance of coal in The continuing importance of coal in world primary energy demandworld primary energy demandThe continuing importance of coal in The continuing importance of coal in world primary energy demandworld primary energy demand

0%

20%

40%

60%

80%

100%

Non-OECD OECD

All other fuelsCoal

Shares of incremental energy demand Reference Scenario, 2006 - 2030Increase in primary demand, 2000 - 2007

Demand for coal has been growing faster than any other energy source & is projected to account for more than a third of incremental global energy demand to 2030

Mto

e

0

100

200

300

400

500

600

700

800

900

1 000

Coal Oil Gas Renewables Nuclear

4.8%

1.6% 2.6%

2.2%

0.8%

% = average annual rate of growth

© OECD/IEA - 2009

Change in oil demand by region Change in oil demand by region in the Reference Scenario, 2007-2030in the Reference Scenario, 2007-2030Change in oil demand by region Change in oil demand by region in the Reference Scenario, 2007-2030in the Reference Scenario, 2007-2030

-2 0 2 4 6 8 10

China

Middle East

India

Other Asia

Latin America

E. Europe/Eurasia

Africa

OECD North America

OECD Europe

OECD Pacific

mb/d

All of the growth in oil demand comes from non-OECD, with China contributing 43%, the Middle East & India each about 20% & other emerging Asian economies most of the rest

© OECD/IEA - 2009

EU natural gas market outlookEU natural gas market outlookEU natural gas market outlookEU natural gas market outlook

EU import dependency rises from 58% today to 86% in 2030 as a result of declining domestic production and increasing demand

0

100

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300

400

500

600

700

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2007 2030

Bcm Imports - other countries

Imports - Middle East

Imports - Africa

Imports - Russia andother TE

Domestic production

© OECD/IEA - 2009

The 11 members of GECF account for 2/3 of global gas reserves,while just 2 of them – Russia & Iran – account for over 40% .

World natural gas reserves and Gas Exporting World natural gas reserves and Gas Exporting Countries Forum (GECF) Countries Forum (GECF) World natural gas reserves and Gas Exporting World natural gas reserves and Gas Exporting Countries Forum (GECF) Countries Forum (GECF)

World total: 179 Tcm (2008)

© OECD/IEA - 2009

Cumulative energy-supply investment Cumulative energy-supply investment

in the Reference Scenarioin the Reference Scenario, 2007-2030, 2007-2030

Cumulative energy-supply investment Cumulative energy-supply investment

in the Reference Scenarioin the Reference Scenario, 2007-2030, 2007-2030

Investment of $26 trillion, or over $1 trillion/year, is needed, but the credit squeeze could delay spending, potentially setting up a supply-crunch once the economy recovers

Power generation

50%

Transmission & distribution

50%Mining

91%

Shipping & ports

9%

Exploration and development

80%

Refining16%

Shipping4%

Exploration & development

61%LNG chain

8%

Transmission & distribution

31%

Power 52%

$13.6 trillion

Oil 24%

$6.3 trillion

Gas21%

$5.5 trillion

Coal 3%

$0.7 trillion

Biofuels <1%

$0.2 trillion

© OECD/IEA - 2009© OECD/IEA - 2009

© OECD/IEA - 2009

World oil production by OPEC/non-OPEC World oil production by OPEC/non-OPEC

in the Reference Scenarioin the Reference Scenario

World oil production by OPEC/non-OPEC World oil production by OPEC/non-OPEC

in the Reference Scenarioin the Reference Scenario

Production rises to 104 mb/d in 2030, with Middle East OPEC taking the lion’s share of oil market growth as conventional non-OPEC production declines

0

20

40

60

80

100

120

2000 2007 2015 2030

OPEC - other

OPEC - Middle East

Non-OPEC - non-conventional

Non-OPEC -conventional

OPEC share

mb/

d

38%

40%

42%

44%

46%

48%

50%

52%

© OECD/IEA - 2009

0

20

40

60

80

100

120

1990 2000 2010 2020 2030

mb/

d

Natural gas liquidsNon-conventional oilCrude oil - yet to be Developed or foundCrude oil - currently producing fields

World oil production by source World oil production by source in the Reference Scenarioin the Reference ScenarioWorld oil production by source World oil production by source in the Reference Scenarioin the Reference Scenario

Even if oil demand was to remain flat to 2030, 45 mb/d of gross capacity – roughly four times the capacity of Saudi Arabia – would ne needed just to offset decline from existing fields.

45 mb/d

© OECD/IEA - 2009

A sea change: world oil & gas production by A sea change: world oil & gas production by company type in the company type in the Reference ScenarioReference ScenarioA sea change: world oil & gas production by A sea change: world oil & gas production by company type in the company type in the Reference ScenarioReference Scenario

0

20

40

60

80

100

120

2007 2015 2030

mb/

d

0

750

1 500

2 250

3 000

3 750

4 500

2006 2015 2030

Bcm

NOCs Private companies

Oil Gas

Almost 80% of the projected increase in output of both oil & gas comes from national companies – on the assumption that investment is forthcoming

© OECD/IEA - 2009© OECD/IEA - 2009

© OECD/IEA - 2008

Reductions in energy-related COReductions in energy-related CO22 emissions in the climate-policy scenariosemissions in the climate-policy scenariosReductions in energy-related COReductions in energy-related CO22 emissions in the climate-policy scenariosemissions in the climate-policy scenarios

While technological progress is needed to achieve some emissions reductions, efficiency gains and deployment of existing low-carbon energy accounts for most of the savings

20

25

30

35

40

45

2005 2010 2015 2020 2025 2030

Gig

aton

nes

Reference Scenario 550 Policy Scenario 450 Policy Scenario

CCS Renewables & biofuels

Nuclear

Energy efficiency

550 Policy

Scenario

450 Policy

Scenario

54%

23%

14% 9%

© OECD/IEA - 2009

Total power generation capacity today Total power generation capacity today and in 2030 by scenarioand in 2030 by scenarioTotal power generation capacity today Total power generation capacity today and in 2030 by scenarioand in 2030 by scenario

In the 450 Policy Scenario, the power sector undergoes a dramatic change – with CCS, renewables and nuclear each playing a crucial role

0 1 000 2 000 3 000

Other renewables

Wind

Hydro

Nuclear

Coal and gas with CCS

Gas

Coal

GW

1.2 x today

1.5 x today

13.5 x today

2.1 x today

1.8 x today

12.5 x today

15% of today’s coal & gas capacity

Today Reference Scenario 2030 450 Policy Scenario 2030

© OECD/IEA - 2009

Cumulative European Union COCumulative European Union CO22 savings savings with 20% reduction target in 2020with 20% reduction target in 2020Cumulative European Union COCumulative European Union CO22 savings savings with 20% reduction target in 2020with 20% reduction target in 2020

EU cumulative savings over 2008-2020 would represent only 40% of China’s annual CO2 emissions in 2020

0

2

4

6

8

10

12

China

ANNUAL 2020 CO2 emissions

Gig

aton

nes

EU-27

CUMULATIVE savingswith 20% CO2 emissions reduction target

(2008 - 2020)

Office of the Chief Economi

st

© OECD/IEA - 2009

Total oil production in 2030 by Total oil production in 2030 by scenarioscenarioTotal oil production in 2030 by Total oil production in 2030 by scenarioscenario

Curbing CO2 emissions would improve energy security by cutting demand for fossil fuels, but even in the 450 Policy Scenario, OPEC production increases by 12 mb/d from now to 2030

0

20

40

60

80

100

120

2007 Reference Scenario2030

550 Policy Scenario2030

450 Policy Scenario2030

Non-OPECOPEC

9 mb/d 16 mb/dmb/

d

© OECD/IEA - 2009

How is the financial & economic crisisHow is the financial & economic crisisaffecting energy investment?affecting energy investment?

How is the financial & economic crisisHow is the financial & economic crisisaffecting energy investment?affecting energy investment?

Difficulties in obtaining credit & higher cost of capital> Increased aversion to risk> Paralysed credit markets> Plunging share values have increased debt-equity ratios

Lower prices & cash flows have made new investments less attractive

Falling demand caused by economic recession has reduced urgency & appetite for suppliers to invest

Office of the Chief Economi

st

© OECD/IEA - 2009

Impact of financial crisis on global investment Impact of financial crisis on global investment in renewable energyin renewable energyImpact of financial crisis on global investment Impact of financial crisis on global investment in renewable energyin renewable energy

Office of the Chief Economi

st

Investment in renewables has been hit by the rising cost of credit and the fall in oil & gas prices which has reduced the economic incentive for “clean” energy...

Source: NEF… since Q2 2008 investment has come down to 2006 levels

0

5

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25

30Bi

llion

dol

lars

04-Q1

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04-Q4

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06-Q2

06-Q3

06-Q4

07-Q1

07-Q2

07-Q3

07-Q4

08-Q1

08-Q2

08-Q3

08-Q4

09-Q1

© OECD/IEA - 2009

Summary & conclusionsSummary & conclusionsSummary & conclusionsSummary & conclusions

Current energy trends are patently unsustainable — socially, environmentally, economically

Energy and geopolitics will be increasingly interconnected

We need a major decarbonisation of the world’s energy system -- Copenhagen is crucial

Addressing environmental issues will substantially improve energy security

Financial crisis can plant the seeds for an “energy investment crisis”