1. World Energy Outlook
Dr. Fatih Birol IEA Chief Economist Brussels, 29 April 2014

2. The world energy scene today
Some long-held tenets of the energy sector are being rewritten
Countries are switching roles: importers are becoming exporters…
… and exporters are among the major sources of growing demand
New supply options reshape ideas about distribution of resources
But long-term solutions to global challenges remain scarce
Renewed focus on energy efficiency, but CO2 emissions continue to rise
Fossil-fuel subsidies increased to $544 billion in 2012
1.3 billion people still lack electricity – in Africa and South Asia
Energy prices add to the pressure on policymakers
Sustained period of high oil prices without parallel in market history
Large, persistent regional price differences for gas & electricity

3. US shale gas and shale oil production increases: 2005-2014
Unconventional oil and gas has made a major contribution to global production
US shale gas and shale oil production increases:
bcm
300
3.0
mb/d
250
2.5
200
2.0
150
1.5
100
1.0 50
0.5
0.0
Gas
Oil
Growth in US shale gas output since 2005 is equivalent to the total production of Qatar, Kuwait, UAE and Iraq combined; while shale oil output is equal to that of Iraq
while shale oil output is equal to that of Iraq

4. Who has flooded the markets?
Incremental steam coal exports Mt
200
Indonesia
180
Australia
160
United States
140
120
100 80 60 40 20
2009
2010
2011
2012
2013
The US accounted for only 7% of the increase in global steam coal exports since 2007

5. The slowdown in Chinese demand caught the industry off-guard
Coal demand in China: real demand vs historical trend
Real consumption Mt
4400
Historical trend
4200
4000
Curbing in China ≈ 20 times
US exports increase in 2012
3800
3600
3400
3200
3000
2010
2011
2012
2013
China’s move away from coal will be a far greater determinant of the direction of the coal markets than the shale gas revolution in the US

6. A mix that is slow to change
Growth in total primary energy demand
Gas
Coal
Renewables
Oil
Nuclear
500
1 000
1 500
2 000
2 500
3 000
Mtoe
Today's share of fossil fuels in the global mix, at 82%, is the same as it was 25 years ago; the strong rise of renewables only reduces this to around 75% in 2035

7. US emissions on a downward trend
Energy-related CO2 emissions in the United States
Gt CO2
6.5
6.0
5.5
5.0
4.5
4.0
1990
1995
2000
2007
2012
2013
CO2 emissions fell sharply since the shale gas revolution, but rebounded last year on the back of a partial gas-coal switch and increased industrial activity

8. Emissions off track in the run-up to the 2015 climate summit in France
Cumulative energy-related CO2 emissions
OECD
Non-OECD
Total emissions
51%
49% Gt
800
600
Non-OECD
OECD
400
200
1900
1930
1960
1990
2013
-2035
-1929
-1959
-1989
-2012
Non-OECD countries account for a rising share of emissions, although 2035 per capita levels are only half of OECD

9. Who has the energy to compete?
Ratio of industrial energy prices relative to the United States
Natural gas
Electricity 3× 4× 5×
Reduction from 2013
2003
2035
2013
2003 2×
United States
Japan
European
Union
China
Japan
European
Union
China
Regional differences in natural gas prices narrow from today’s very high levels but remain large through to 2035; electricity price differentials also persist
electricity price differentials also persist

10. Energy-intensive industries need to count their costs
Share of energy in total production costs for selected industries
10%
20%
30%
40%
50%
60%
70%
80%
90%
Petrochemicals
Fertilisers
Aluminium
Cement
Iron & steel
Pulp & paper
Glass
Energy-intensive sectors worldwide account for around one-fifth of industrial value added, one-quarter of industrial employment and 70% of industrial energy use.

11. An energy boost to the economy?
Share of global export market for energy-intensive goods
European Union
+3%
+1%
+2%
+2%
Japan
Today
36%
10% 7% 7% 3% 2%
China
Middle East
India
United States
-10%
-3%
The US, together with key emerging economies, increases its export market share for energy-intensive goods, while the EU and Japan see a sharp decline
while the EU & Japan see a sharp decline

12. Indicative economics of LNG export from the US Gulf Coast
LNG from the United States can alleviate strain on the gas markets, but is no silver bullet
Indicative economics of LNG export from the US Gulf Coast
$/MBtu 18 15
$/MBtu 12 12
Average import price 9 9
Liquefaction, shipping
& regasification 6 6
United States price 3 3
To Asia
To Europe
New LNG supplies accelerate movement towards a more interconnected global market, but high costs of transport between regions mean no single global gas price
but high costs of transport between regions mean no single global gas price

13. A Third Way for Europe: balancing competitiveness & sustainability
The high cost of energy in Europe is a structural issue, not a one off
Europe’s share of the global export market for energy-intensive goods is set to decline substantially by 2035, directly impacting 30 million jobs
Both competitiveness & sustainability are crucial issues for Europe, but it must not be seen as an “either-or” choice
improve energy efficiency
negotiate more competitive terms for natural gas imports
develop renewables, nuclear power & unconventional gas
complete the internal energy market
2014 a key year for Europe energy policy, it will shape its long-term prosperity & could provide powerful inspiration for others to follow