Download Energy Security and the World Bank Group

Energy Security
Global Issues Seminar
Series
November 8th 2006
1
Energy Security is…?
– For rich countries…maintaining life
styles, and continued growth
– For poor countries…growth and
development
– For the poorest .. access to wood,
electricity,…
– For producers…market access
2
Most simply…
Reliable energy supply at reasonable
cost and acceptable environmental
impacts….
… that will allow the world to grow in a
sustainable and equitable way
3
Why concerns about energy
security now?
1.
2.
High oil prices & processing constraints
Perception that future oil supply may be
insufficient:
– High and growing concentration in the Middle
East OPEC countries
– Strong growth from a booming China
– Emerging India
– Robust demand from the industrialized
countries with easy substitution away from oil
over
3.
No easy successor to oil waiting in the
wings
4
High Oil Prices (again)
Real Oil Prices (2005 US$) 1960-2006
19
60
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
5
0
Aluminum
Copper
Lead
Zinc
2006
2004
2002
2000
1998
1996
1997
1992
1990
1999
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
Real Price
Its more than Oil
Real Metal Prices 1960-2005
250
200
150
100
50
Nickel
6
Concentration of oil production
Oil Production (2005)
Other
OPEC
Former Soviet
Union
OECD
7
Concentration of future oil production
Disribution of OIl Resources
OPEC
Other
OECD
Former Soviet
Union
8
Potential for future demand growth
(Source IEA)
Energy Consumption per capita
10
Developing Country Population: 6.4 billion
Developed Country Population: 1.0 billion
8
6
4
2
W
or
ld
In
di
a
Ch
in
a
Ch
i le
o
M
ex
ic
UK
Ja
pa
n
Ko
re
a
Ca
na
da
Au
st
ra
Ne
li a
w
Ze
al
an
d
Fr
an
ce
G
er
m
an
y
Ru
ss
ia
US
0
9
IEA Global Demand by Region
Business-as-usual scenario
18,000
16,000
Transition Economies
Asia
MENA, Africa and L America
14,000
OECD
Mtoe
12,000
10,000
8,000
6,000
4,000
2,000
1971
1979
1987
1995
2003
2011
2019
2027
Non-OECD demand grows three times faster than OECD demand
10
What are the alternatives





Heavy oil/tar sands: potential but climate
change impacts
Coal: super competitive (fastest growth in
2005) but climate change and local pollution
Gas: prices linked to oil and concentrated
Efficiency: lots of potential in developed
countries but how to make it happen
Renewables: becoming more competitive but
costs and other constraints
(e.g. bio fuels, dams, wind)
11
IEA Global Demand by Fuel
Business-as-usual scenario
18 000
16 000
14 000
Natural gas
Mtoe
12 000
10 000
Oil
8 000
6 000
4 000
Coal
2 000
Other renewables
0
1970
1980
1990
2000
2010
2020
Hydro
power
Nuclear
power
2030
In Reference Case, global energy demand will rise by 52% by 2030
12
IEA Increases in Energy Demand
2003 - 2030
Absolute Increase
(Mtoe)
% Increase
Coal
1,142
44%
Oil
1,761
47%
Gas
1,698
76%
80
12%
Hydro
141
62%
Biomass
510
45%
Other RE
218
404%
5,550
52%
Nuclear
Total
83% of additional demand to be met from fossil fuels
13
How important for WBG’s
developing countries?

Short Term
– Short term macro adjustment by oil consumers
– “Windfalls” management by producers

Long term
– Higher costs, if not avoided, are a significant
“tax” on oil using poor countries
– Volatility – impact on growth?
– Implications for changing fuel cost
competitiveness (& climate concerns) on:
 Energy
strategies and long term energy Investment
choices
 Other aspects of development
14
What Can be done to secure energy
supplies
Everything is important – no silver bullet
 Greater efficiency, conservation and
renewable energy
 Fossil fuels with environmental mitigation
 Energy independence is a mirage
 Interdependence is the only way

– Open trade and investment
– Cooperation

Use of markets and private sector to
greatest extent
15
Final Question?
A new era in terms of the world’s
use of resources
Versus:
Market forces and ingenuity will
sort it out
16