fossil fuels strategies and policies: a snapshot
TRANSCRIPT
Fossil Fuels Strategies and Policies: A Snapshot
LONDON ENERGY CONSULTING David Cox
22nd March 2013
CONFIDENTIAL
Agenda
• Introduction
• How much energy do we need?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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Introductions: David Cox
David has worked in the energy industry for 30 years and has expertise in the regulation of utilities, strategy, market entry, valuation, security of supply, gas storage, gas contracts and gas transportation issues. He worked at British Gas in regulatory affairs. He joined ILEX (energy consultancy) in 1995 and promoted to MD of UK operations in 2003. He was made the President of the Pöyry Energy Consulting business area from 2007 through to the end of 2010. He led a very successful European business with over 250 energy consultants. David left Pöyry in early 2011 to concentrate on gas contract arbitration services and providing other strategic gas advice.
David is an acknowledged energy expert and has worked right across the energy chain for clients including banks, governments, producers, shippers, suppliers, large energy users (including the generators), gas transporters and regulators.
David has a wide experience of gas contract price reopener issues. David was responsible for developing the ILEX gas modelling expertise used to derive gas prices in many European countries. David has presented gas market studies to the UK Energy Minister and also advised No 10. He has led a team working on security of supply issues for UK Government.
In 2010 David advised the Colombian government on how to further reform and develop their gas and oil industry. He advised the Saudi Arabian KA-CARE project on how to move the country away from oil/gas dependency to a future energy strategy of nuclear and renewable energy.
David is part time Managing Director of the Gas Forum, the trade association which represents the mid and downstream
gas industry in the UK.
David is frequently called on by the media to explain energy issues
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CONFIDENTIAL
Agenda
• Introduction
• How much energy do we need?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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World energy demand – IEA WEO 2012
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Oil demand and prices – WEO 2012
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Long term oil prices Source: BP Statistical Review
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Gas demand grows under all IEA scenarios – WEO 2012
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Coal consumption
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Coal share in primary demand
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Nuclear power production declined by over 4% - BP Statistical Review 2012
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CONFIDENTIAL
Agenda
• Introduction
• How much energy do we need?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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Oil reserves – WEO 2012
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Gas reserves – WEO 2012 – we use around 3.5 tcm per year so these equate to some 225 years of gas
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Coal reserves – WEO 2012
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Agenda
• Introduction
• How much energy do we need?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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CONFIDENTIAL
The Global Energy System 2010 (Mtoe) – WEO 2012
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Primary energy world consumption – BP Statistical Review 2012
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Primary energy consumption by region – BP Statistical Review 2012
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Growth in non-OCED countries
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Agenda
• Introduction
• How much fossil fuel do we have?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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Fossil fuels and renewables
• Fossil fuels provide over 87% of our energy • Oil still the most important but in decline for past 10 years • Coal growing fast – by 5.4% in 2011 • Renewables around 2% of energy production • This needs to change due to climate change
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The rise of renewables – WEO 2012
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Agenda
• Introduction
• How much energy do we need?
• Where is it?
• Who is using it?
• How long can we go on using fossil fuels?
• The future?
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Climate change mitigation and the 450 ppm scenario potentially limits the use of fossil fuels
• Global CO2 emissions increased in 2011 by 3.2% - continuing this pathway could lead to 50% probability of 3.6°C increase
• 450 scenario targets a 2°C increase • Investment required is huge – some $16 trillion extra • Energy efficiency plays a vital role • Our current path has already locked in some 80% of the
carbon emissions allowed under the 450 ppm scenario • Without CCS (carbon capture and storage) more than 2/3
of our fossil fuels cannot be used if we are to hit the 450 ppm scenario
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CONFIDENTIAL
Energy policy – Summary
•We have ample energy supply – both fossil and renewable
•Climate change is now the main driver of energy policy
•Need to reduce CO2 emissions and the likelihood of temperatures rising
•Governments are struggling with balancing the need to reduce carbon emissions with security of supply and affordability
•Global agreement on the route to carbon reductions is proving difficult
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A reminder of the role of energy in economic progress – and carbon emissions
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