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OECD/IEA 2013

World Energy Outlook 2012

Maria van der Hoeven

Executive Director, IEA

Mexico City, 12 February 2013

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The context

Foundations of global energy system shifting Resurgence in oil & gas production in some countries

Retreat from nuclear in some others

Signs of increasing policy focus on energy efficiency

All-time high oil prices acting as brake on global economy

Divergence in natural gas prices affecting Europe (with prices 5-times US

levels) and Asia (8-times)

Symptoms of an unsustainable energy system persist Fossil fuel subsidies up almost 30% to $523 billion in 2011

CO2emissions at record high, while renewables industry under strain

Despite new international efforts, 1.3 billion people still lack electricity

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Emerging economies steer energy markets

Share of global energy demand

Global energy demand rises by over one-third in the period to 2035,

underpinned by rising living standards in China, India & the Middle East

20%

40%

60%

80%

100%

1975 2010 2035

Middle East

India

China

OECD

Non-OECD

Rest of non-OECD

6 030 Mtoe 12 380 Mtoe 16 730 Mtoe

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A US oil & gas transformation

United States oil and gas production, 1980-2035

The surge in unconventional oil & gas production has implications

well beyond the United States

Unconventional gas

Conventional gas

Unconventional oil

Conventional oil

mboe/d

5

10

15

20

25

1980 1990 2000 2010 2020 20302035

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Unconventional gas in Mexico

Keep development costs down,

but recognize social and environmental impacts and public perception risks

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Iraq oil poised for a major expansion

Iraq oil production

Iraq accounts for 45% of the growth in global production to 2035;

by the 2030s it becomes the second-largest global oil exporter, overtaking Russia

1

2

3

4

56

7

8

9

2012 2020 2035

mb/d North

Centre

South

Iraq oil exports

1

2

3

4

5

6

7

8

9

2012 2020 2035

mb/d Other

Asia

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Middle East oil to Asia: a new silk road

Middle East oil export, by destination

By 2035, almost 90% of Middle Eastern oil exports go to Asia; North Americas

emergence as a net exporter accelerates the eastward shift in trade

7

United StatesKorea & Japan EuropeChina India

mb/d 2000

2011

2035

1

2

3

4

5

6

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Natural gas: towards a globalised market

Major global gas trade flows, 2010

Rising supplies of unconventional gas & LNG help to diversify trade flows, putting

pressure on conventional gas suppliers & oil-linked pricing mechanisms

Major global gas trade flows, 2035

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Different trends in oil & gas

import dependency

While dependence on imported oil & gas rises in many countries,

Net oil & gas import dependency in selected countries

0%

20%

40%

60%

80%

100%

20% 40% 60% 80% 100%

Oil imports

Gas Imports

United States

ChinaIndia

European Union

Korea & Japan

2010

2035

20%Gas Exports

the United States swims against the tide

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3 000 4 000 5 000 6 000TWh

2 000

A power shift to emerging economies

The need for electricity in emerging economies drives a 70% increase in worldwide

demand, with renewables accounting for half of new global capacity

Change in power generation, 2010-2035

-1 000 0 1 000European Union

United States

China

TWh

Coal Gas Nuclear Renewables

India

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The multiple benefits of renewables

come at a cost

Renewable subsidies were $88 billion in 2011; over half the subsidies required to

2035 has been committed to existing projects or is needed to meet 2020 targets

Global renewable energy subsidies of $4.8 trillion, 2011-2035

Electricity

$3.6 trillion

Biofuels

$1.2 trillion

Committed to

existing projects

$1.0 trillion

Required to

meet targets

2012-2020

$1.6 trillion

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2010

Energy is becoming thirstier in the

face of growing water constraints

The energy sectors water needs are set to grow, making water an increasingly

important criterion for assessing the viability of energy projects

20%

40%60%80%

100%

2010

Coal

Nuclear

Other

Energy

BiofuelsFossil fuels

Power

Global water use Water for energy

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Energy efficiency: a huge opportunity going

unrealised

20%

40%

60%

80%

100%

Industry Transport Power

generation

Buildings

Unrealised energy

efficiency potential

Realised energy

efficiency potential

Two-thirds of the economic potential to improve energy efficiency remains untapped

in the period to 2035

Energy efficiency potential used by sector in the New Policies Scenario

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The Efficient World Scenario:

a blueprint for an efficient world

Economically viable efficiency measures can halve energy demand growth to 2035;

oil demand savings equal the current production of Russia & Norway

Total primary energy demand by scenario

12 000

13 000

14 000

15 000

16 000

17 000

18 000

2010 2015 2020 2025 2030 2035

Mtoe

New Policies

Scenario

Efficient

World Scenario

Reduction in 2035

Coal 1350 Mtce

Oil 12.7 mb/d

Gas 680 bcm

Others 250 Mtoe

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Energy efficiency brings economic gains

In addition to cutting energy expenditures by an average of 20%, improved efficiency

brings wider economic gains, particularly for India, China, the United States & Europe

Energy expenditure in 2035 compared with 2010

Trillion

Efficient World

Scenario

New Policies

ScenarioAdditional in the

New Policies

Scenario

-$0.3

$0

$0.3

$0.6

$0.9

$1.2

$1.5

China India European

Union

United

States

Japan

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Mexico: Towards energy leadership

Greater efforts are needed to tap the full potential that Mexicos

energy sector can bring to the economy as a whole

Reforms need to tackle persistent blockages:

lack of investment and technology,

fossil fuel subsidies

hurdles to the deployment of low-carbon technologies

A reformed energy sector can serve as a locomotive for growth

Successful reforms could turn Mexico into an influential voice in

global energy reform discussions