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IEA and EIA: Similarities and Differences in Projections and Approaches to Energy Modeling

for International Energy Agency April 16, 2012 | Paris, France by Howard Gruenspecht, Acting Administrator

2 Howard Gruenspecht IEA, April 16, 2012

Missions and Functions: Similarities and Differences


Global Projections: Similarities and Differences

IEO2011 Reference case and WEO2011 Policies Scenarios • IEO Reference case:

– Assumes current laws and policies

– Does not anticipate new policies or regulations that have not been implemented

– Includes alternative oil price scenarios and impact on markets

• WEO features its New Policies Scenario as its central scenario and assumes government commitments are “implemented in a cautious manner”

• The WEO Current Policies Scenario is the most comparable to IEO Reference case. All comparisons in this presentation are the CPS unless otherwise specified

4

Howard Gruenspecht IEA, April 16, 2012

2011 IEO & WEO Comparisons

Howard Gruenspecht IEA, April 16, 2012 5

• Forecast Similarities: – Global liquids demand

– Global natural gas demand

– Global total energy demand – both project 1.6% annual growth

• Forecast Distinctions: – EIA base case assumes only current policies and regulations

– Significant differences on U.S. energy production, demand, and prices across fuels

– WEO forecasts a larger OPEC market share of global liquids production

– WEO assumes GDP growth remains constant across wide-ranging side cases

– WEO includes traditional, non-commercial biomass and waste in its renewables data which slows its growth rate compared to IEO resulting in an uneven comparison

Non-OECD liquid fuels use surpasses almost flat OECD liquid fuels use in the near future

6

0

10

20

30

40

50

60

70

2000 2005 2010 2015 2020 2025 2030 2035

total liquids consumption million barrels per day

Source: EIA, Annual Energy Outlook 2012 Early Release

Projections History 2010

OPEC

Other non-OECD

OECD Americas

OECD

62

48

40%

19%

35%

41


Non-OECD 46

World oil price assumptions

7

2010 dollars per barrel

0

40

80

120

160

2000 2005 2010 2015 2020 2025 2030 2035

WEO-2011 - Current Policies Scenario IEO2011 AEO2012 WEO-2011 - New Policies Scenario

Source: EIA, AEO2012 and IEO2011; IEA, WEO-2011


World liquid fuels supply, 2035

8

million barrels per day

45.2

53.9

13.1

50.1

42.5

16.4

0

10

20

30

40

50

60

OPEC conventional Non-OPEC conventional Unconventional

IEO2011 WEO-2011 CPS

Source: EIA, IEO2010 and IEO2011; IEA, WEO2011


Growth in OPEC production comes mainly from the Middle East

9

OPEC conventional production million barrels per day

* Saudi Arabia, Iraq, Iran Source: EIA, International Energy Outlook 2011

0

5

10

15

20

25

30

Top 3 Middle East* Other Middle East OPEC Africa South America

2008 2035


Non-OPEC conventional supply growth comes mainly from Russia, United States, Brazil, and Kazakhstan

10

Non-OPEC conventional production million barrels per day

Source: EIA, International Energy Outlook 2011

0

2

4

6

8

10

12

14

Russia United States Brazil Kazakhstan OECD Europe Mexico Canada

2008 2035


National Petroleum Council Study


Source: National Petroleum Council

Oil sands/bitumen and biofuels account for 70 percent of the increase in unconventional liquid fuels

12

Unconventional production million barrels per day


0

1

2

3

4

5

6

Oil sands/bitumen Biofuels Extra-heavy oil Coal-to-liquids Gas-to-liquids Oil Shale

2008 2035


Growth in energy consumption by country grouping, 2009-2035

13

2.3

0.9

2.3

0.5

0.0 0.3 0.5 0.8 1.0 1.3 1.5 1.8 2.0 2.3 2.5

Non-OECD

OECD

WEO-2011 CPS

IEO2011

percent per year

Source: EIA, IEO2011; IEA, WEO-2011

Growth in income and population drive rising energy use; energy intensity improvements moderate increases in energy demand

14

average annual change (2008-2035) percent per year


-4

-3

-2

-1

0

1

2

3

4

5

6

7

U.S. OECD Europe

Japan South Korea

China India Brazil Middle East

Africa Russia

Energy Intensity GDP per capita Population


China and India account for about half of the world increase in energy use

15

world energy consumption quadrillion Btu


0

100

200

300

400

1990 2000 2008 2015 2025 2035

Non-OECD Asia Other Non-OECD OECD


History Projections

Growth in China energy consumption by fuel, 2009-2035

16

2.8

5.5

1.9

10.7

5.1

2.7 2.6

6.8

2.1

9.7

1.4

2.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Liquids Natural gas Coal Nuclear Renewables Total


percent per year



Growth in India energy consumption by fuel, 2009-2035

17

3.5 3.7

2.1

10.2

3.7 3.0

3.5 4.3 4.1

8.4

1.3

3.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0



percent per year



Energy consumption in the United States, China, and India, 1990-2035

18

quadrillion Btu


0

50

100

150

200

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

India

United States

China

History Projections 2008



U.S. Energy Projections: A Deeper Dive

Growth in U.S. energy consumption

20

percent per year

Source: EIA, AEO2012; IEA, WEO-2011

0.6

0.5 0.5

0.6

0.1

0.3

0.0

0.2

0.4

0.6

0.8

2009-2020 2020-2035 2009-2035

AEO2012 WEO-2011 CPS


Growth in U.S. energy consumption by fuel, 2009-2035

21

0.5 0.6 0.8

0.3

2.1

0.7

0.3

0.7 0.3 0.4

2.1

0.5

-0.5

0.3 0.4 0.5

3.4

0.3

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0


IEO2011 AEO2012 WEO-2011 CPS

percent per year

Source: EIA, AEO2012 and IEO2011; IEA, WEO2011


0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Energy-related CO2 emissions

2005 2020 2035 Energy-related CO2 emissions

6.00 5.55 5.81

% change from 2005 - - -7.5% -3.2%

In the AEO2012 Reference case, energy-related CO2 emissions never get back to pre-recession levels by 2035

22

billion metric tons carbon dioxide


Projections History 2010 2005


U.S. natural gas import prices

23

2010 dollars per million Btu

4.5 3.9

4.5

5.5 5.8

6.8

4.4

6.1

7.0 7.7

8.4 9.0

0

1

2

3

4

5

6

7

8

9

10

2010 2015 2020 2025 2030 2035

AEO2012 WEO-2011 CPS

Source: EIA, AEO2012; IEA, WEO-2011


Oil to natural gas price ratio remains high over the projection


0

1

2

3

4

5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

ratio of oil price to natural gas price

Source: EIA, Annual Energy Outlook 2012 Reference Case

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Crude oil (foreign low sulfur light) U.S. Natural gas at Henry hub


Oil and natural gas prices 2010 dollars per million Btu


24

Since 2000, U.S. shale gas production has increased 17-fold and now comprises about 30 percent of total U.S. dry production

25

0

2

4

6

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rest of US Bakken (ND) Eagle Ford (TX) Marcellus (PA and WV) Haynesville (LA and TX) Woodford (OK) Fayetteville (AR) Barnett (TX) Antrim (MI, IN, and OH)

annual shale gas production (dry) trillion cubic feet

Sources: Lippman Consulting, Inc. gross withdrawal estimates as of November 2011 and converted to dry production estimates with EIA-calculated average gross-to-dry shrinkage factors by state and/or shale play. Note: 2011 is annual rate for first 11 months.


0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

2%

Shale gas offsets declines in other U.S. natural gas production sources

26

U.S. dry gas production trillion cubic feet per year


Non-associated offshore

Projections History

Associated with oil Coalbed methane

Non-associated onshore

Shale gas

2010

10%

7%

9%

7%

21%

23%

9%

9%

7%

49%

Alaska 1%

Tight gas 26%

21%


Domestic natural gas production grows faster than consumption

-5

0

5

10

15

20

25

30

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

U.S. dry gas trillion cubic feet per year


Projections History 2010

Consumption

Domestic supply


Net imports

27

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Howard Gruenspecht IEA, April 16, 2012 28

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