THE POLITICS OF ENERGY

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THE POLITICS OF ENERGY A peek at 2030 and
Beyond 10th Energy Congress of Turkey
Istanbul 27 30 November, 2006 GERALD
DOUCET SECRETARY GENERAL, WORLD ENERGY COUNCIL
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WHAT IS WEC?
WEC founded in 1923 all energies and global non
governmental long term reflection short term
action Rome Congress 2007 Montreal Congress 2010
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Sydney Congress 2004 Major Results
keep all energy options open no agreement on
global infrastructure investment for energy one
kind of market reform doesnt fit all reliability
of systems investment versus management
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Sydney Congress contd
security and efficiency in market integration
climate change Beyond Kyoto? Life cycle? Clean
Technologies? Who pays? and When? RD new
partnerships by government and industry in a
market driven world public awareness and
acceptance everybodys problem. Oil Sands?
Nuclear?
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Realities I

• oil and gas imports high in some OECD countries
  but
• electricity integration growing
• Governments and regulators do not yet understand
  the need for champions
• aggressive politicisation of energy trade in
  markets like Russia, Venezuela, Bolivia, Iran,
  and China but also USA and EU.

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Realities II

• OECD energy policy base is inward and fragile?
  eg USA, Europe
• new energy investment and price challenges driven
  by Russia, India, China
• shifting growth (regional and by fuel) in a
  global setting LPG looking good!
• short-term shareholder interests, societal
  expectations and the need for long-term planning
  and innovation?

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Are there enough energy supplies for all people?
Its the tap not the tank! Stones and Other
Stuff
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Energy Policy Scenarios to 2050

• WEC sustainability goals accessibility,
  availability, acceptability
• global impact of geopolitics on regional and
  national scenery
• competition for supply decisions NOW affect
  2030
• competition for customers decisions NOW affect
  2030
• investments come at price who pays?

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Energy Drivers Big Changes

• demographics? five countries 50 of world!
• institutional barriers uneven progress
• production and end-use efficiencies?
• new technology CCS? synthetics nuclear?
• environmental costs rising and to be paid
• real prices rising and to be paid
• GDP and TPER not always in sync
• wild cards RUSSIA? CHINA? INDIA?

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Question 1 What Future Evolution?
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Question 2 Will Oil Still be King?
RANKING OF PRIMARY ENERGIES
Mtoe
12000
First oil
shock
10000
Oil
Natural
8000
gas
6000
Coal
Traditional and
4000
non-fossil fuels
2000
0
1940
1950
1960
1970
1980
1990
2000
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Question 3 Is Coal Coming Back? CTL, GTL ETC
kb/d
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Question 4 What about World GDP in Real Terms?
GDP PPP
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POLICY AXES
Interventionist (Heavy)
Government Engagement
Enabling (Light)
Globalism (Inclusive)
Nationalism (Exclusive)
Integration / Co-Operation
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EMERGING ISSUES I

• large potential growth of energy demand in Asia,
  Africa and Middle East
• expected oil shocks and recessions 2010-2050 Mean
  Higher Volatile prices across energy spectrum
  Bigger LPG market for heating and cooking
• lower real GDP means least cost niche
  investments Distributed Gen for basic services

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EMERGING ISSUES II
offset oil and gas production with coal
synthetics and nuclear Follow the money too
little access improvement in poorest countries
despite G8 rhetoric Big Markets stay poor and
disconnected emissions trading and CDM go
global CCS is the adaptation game
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20th World Energy Congress 11-15 November,
2007 Rome, Italy The Energy Future in an
Interdependent World www.rome2007.it
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THANK YOU WWW.WORLDENERGY.ORG