IEA-IEF-OPEC Outlook Comparison Richard Newell, Director, Duke - - PowerPoint PPT Presentation

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IEA-IEF-OPEC Outlook Comparison Richard Newell, Director, Duke - - PowerPoint PPT Presentation

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IEA-IEF-OPEC Outlook Comparison Richard Newell, Director, Duke University Energy Initiative Gendell Professor of Energy and Environmental Economics, Nicholas School of the Environment Sixth IEA-IEF-OPEC Symposium on Energy Outlooks February 16,

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IEA-IEF-OPEC Outlook Comparison

Richard Newell, Director, Duke University Energy Initiative

Gendell Professor of Energy and Environmental Economics, Nicholas School of the Environment

Sixth IEA-IEF-OPEC Symposium on Energy Outlooks February 16, 2016 | Riyadh, Saudi Arabia

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Overview

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  • Highlights from comparison of recent IEA and OPEC outlooks

– Recent progress on data quality and comparability – Baseline 2014 liquids data – Global liquids demand outlook – Global liquids supply outlook – Oil price assumptions

  • IEA and OPEC in the context of other long-term outlooks
  • This presentation focuses on differences, but similarities of

approach and results are far more common

  • IEA-IEF-OPEC Technical Meeting tomorrow to discuss
  • pportunities for improved comparability

Richard Newell, February 16, 2016, Riyadh

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IEA and OPEC outlooks covered in the report

Richard Newell, February 16, 2016, Riyadh

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IEA OPEC

Report type Report name Publication date Report name Publication date Short-term Oil Market Report (OMR)

  • Dec. 2015

Monthly Oil Market Report (MOMR)

  • Dec. 2015

Medium-term Medium-Term Oil Market Report (MTOMR)

  • Feb. 2015

World Oil Outlook (WOO2014)

  • Dec. 2015

Long-term World Energy Outlook (WEO)

  • Nov. 2015

World Oil Outlook (WOO)

  • Dec. 2015
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Examples of recent progress on data quality and comparability

  • f outlooks

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Both IEA and OPEC used same baseline years for long-term projections in the

  • utlook, enabling better comparisons.

Both IEA and OPEC agreed to share and review more historical baseline data for the years 2008 to 2013 for the regions where apparent differences are the largest: Non-OECD Asia (outside of China) and the Former Soviet Union (FSU). OPEC disaggregated OPEC Member Countries into geographical regions in OPEC long-term liquids demand projections, allowing a more direct comparison with IEA.

Richard Newell, February 16, 2016, Riyadh

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Baseline 2014 liquids data

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Richard Newell, February 16, 2016, Riyadh

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2014 liquids demand (mb/d)

IEA OPEC Difference (IEA-OPEC) Total OECD 45.7 45.7 0.0 OECD Americas 24.1 24.2

  • 0.1

OECD Europe 13.4 13.4 0.0 Asia Oceania 8.2 8.2 0.0 Total Non-OECD 47.1 45.6 1.5 Asia 22.6 21.9 0.7 China 10.6 10.5 0.1 Other non-OECD Asia 12 11.4 0.6 Middle East 8 8.1

  • 0.1

Latin America 6.8 6.6 0.2 FSU 4.9 4.5 0.4 Non-OECD Europe 0.7 0.7 0.0 Africa 4 3.8 0.2 World 92.8 91.4 1.5

1.5 mb/d difference between IEA and OPEC in 2014 baseline data is due to differences in non-OECD nations, particularly Asia outside of China

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Richard Newell, February 16, 2016, Riyadh

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2014 liquids supply (mb/d)

IEA OPEC Difference (IEA-OPEC) Total OECD 24.2 24.2 0.0 OECD Americas 20.0 20.1 0.0 OECD Europe 3.6 3.6 0.0 Asia Oceania 0.5 0.5 0.0 Total Non-OECD 30.5 30.2 0.4 Non-OECD Asia 7.9 7.8 0.1 China 4.2 4.3 0.0 Other non-OECD Asia 3.6 3.5 0.2 Middle East 1.3 1.3 0.0 Latin America 5.0 5.0 0.0 FSU 13.9 13.6 0.4 Non-OECD Europe 0.1 0.1 0.0 Africa 2.3 2.4

  • 0.1

Processing gains 2.2 2.2 0.0 Total Non-OPEC 57.0 56.5 0.5 Total OPEC 36.6 35.9 0.8 OPEC crude 30.3 30.1 0.2 OPEC NGLs + unconventionals 6.4 5.8 0.6 World 93.7 92.4 1.3

1.3 mb/d difference in 2014 IEA-OPEC liquids supply associated with FSU & OPEC supply

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Richard Newell, February 16, 2016, Riyadh

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A 1.5 mb/d difference in base year 2014 liquids demand contributes a significant portion of demand forecast differences for IEA-OPEC

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Short-term world liquids demand

Richard Newell, February 16, 2016, Riyadh

92.8 94.6 95.8 91.3 92.9 94.1 89 90 91 92 93 94 95 96 97 2014 2015 2016 mb/d IEA OPEC 1.7 1.5 1.7

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Global liquids demand outlook

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Richard Newell, February 16, 2016, Riyadh

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IEA and OPEC adjusted liquids demand growth upward during 2015 from 0.9-1.0 mb/d to 1.6-1.8 mb/d, mostly in OECD countries

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Revisions of 2015 liquids demand growth forecasts

  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec mb/d

Richard Newell, February 16, 2016, Riyadh

IEA (World) IEA (Total Non-OECD) IEA (Total OECD) OPEC (World) OPEC (Total Non-OECD) OPEC (Total OECD)

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Medium-term demand projection difference mainly comes from Non-OECD regions

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88 90 92 94 96 98 100 2014 2015 2016 2017 2018 2019 2020 mb/d

(a) World liquids demand

Richard Newell, February 16, 2016, Riyadh

42 44 46 48 50 52 54 2014 2015 2016 2017 2018 2019 2020 mb/d

(b) OECD and Non-OECD liquids demand

OPEC IEA OPEC (Non-OECD) OPEC (OECD) IEA (Non-OECD) IEA (OECD)

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80 85 90 95 100 105 110 115 120 125 mb/d 2014 2030 2020 2040 OPEC HEG

Long-term liquids demand projections vary widely, yet OPEC Reference and IEA New Policy scenarios are within 1 mb/d in 2040

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World liquids demand projections in various scenarios

Richard Newell, February 16, 2016, Riyadh

OPEC Reference OPEC LEG IEA 450 ppm IEA Current Policies IEA New Policies

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Global liquids supply outlook

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Richard Newell, February 16, 2016, Riyadh

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Non-OPEC liquids supply growth forecast for 2015 initially dipped, then recovered

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Revisions of liquids supply forecasts for 2015

  • 0.2

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec mb/d

Richard Newell, February 16, 2016, Riyadh

IEA (Total Non-OPEC) OPEC (Total Non-OPEC) IEA (OECD) OPEC (OECD) IEA (Non-OECD) OPEC (Non-OECD)

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Short-term IEA and OPEC forecasts for 2016 show slowing non- OPEC liquids supply growth turning negative

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Non-OPEC liquids supply annual growth

1.3 2.4 1.3

  • 0.6

1.4 2.2 1

  • 0.4
  • 0.8
  • 0.4

0.0 0.4 0.8 1.2 1.6 2.0 2.4 2.8 mb/d IEA OPEC 2015 2016 2014 2013

Richard Newell, February 16, 2016, Riyadh

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Short-term liquids supply growth is led by OPEC crude, while OECD Americas supply declines in 2016

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Short-term liquids supply net annual growth forecasts

Richard Newell, February 16, 2016, Riyadh

1.8 1.5 1.2 1.3

  • 0.8
  • 0.4

0.0 0.4 0.8 1.2 1.6 2.0 IEA OPEC IEA OPEC mb/d Processing gains OPEC crude OPEC NGLs + unconventionals Non-OECD Other OECD OECD Americas World 2015 2016

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Medium term Non-OPEC liquids supply growth forecasts still show continued growth

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0.7 0.4 0.5 0.7 0.6 0.5

  • 0.4
  • 0.2

0.0 0.2 0.4 0.6 0.8 1.0 2015 2016 2017 2018 2019 2020 mb/d

(a) IEA Outlook

0.7 0.3 0.5 0.8 0.9 0.4

  • 0.4
  • 0.2

0.0 0.2 0.4 0.6 0.8 1.0 2015 2016 2017 2018 2019 2020 mb/d

(b) OPEC Outlook

Processing gains Other Non-OECD Europe & Eurasia

  • L. America

Other OECD OECD Americas Total Non-OPEC

Richard Newell, February 16, 2016, Riyadh

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51 58 65 60 60 60 28 39 44 34 41 45 9 13 13 9 10 9

88 110 122 102 110 115 20 40 60 80 100 120 140

450 ppm Scenario New Policies Scenario Current Policies Scenario Low Economic Growth Reference Case High Economic Growth

mb/d OPEC NGLs + unconventionals OPEC crude (incl. Venezuela extra heavy) Non-OPEC IEA OPEC

Long-term oil supply scenarios vary widely, yet similar projections for OPEC Reference and IEA New Policies scenarios

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2040 liquids supply outlooks in different scenarios

Richard Newell, February 16, 2016, Riyadh

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Oil price assumptions

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Richard Newell, February 16, 2016, Riyadh

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Medium-term price assumptions are similar until they begin to diverge somewhat in 2019

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Medium-term oil price assumptions (nominal US$)

Richard Newell, February 16, 2016, Riyadh

20 40 60 80 100 120 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 $/bbl OPEC reference basket Brent history / IEA average import price assumption Assumption → ← History

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IEA’s long-term oil price assumptions are substantially higher than OPEC’s

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Long-term oil price assumptions (real 2014 US$)

Richard Newell, February 16, 2016, Riyadh

71 83 80 77 95 150 128 95 20 40 60 80 100 120 140 160 $/bbl 2040 2020

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Key remaining challenges in comparing IEA and OPEC energy

  • utlooks

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  • Different units (mb/d, mboe/d, mtoe), and sometimes unclear

conversion factors between units

  • Different treatment of biofuels/bunkers within global versus

regional liquids supply

  • Different liquids categorization: e.g., definition of “crude oil”
  • Different regional groupings, in particular separate OPEC

treatment of member country demand in medium-term projections

  • Different conception of “central” policy scenarios
  • Oil price assumptions

Richard Newell, February 16, 2016, Riyadh

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IEA and OPEC in the context of other long-term energy outlooks

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Richard Newell, February 16, 2016, Riyadh

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Challenges in comparing IEA and OPEC projections to other energy outlooks

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  • Some challenges similar to comparison of IEA and OPEC

– Different primary energy units and fuel-specific physical units – Different categorization of biofuels and renewable power – Different regional groupings – Different assumptions for policy and about economic growth

  • Plus, several additional challenges

– Assumptions about energy content of fossil fuels can vary by 2-12% – Different conversion factors for renewables and nuclear can alter primary energy estimates for these sources by -65% to +153% – Omission of traditional non-marketed biomass by U.S. EIA and BP leads to primary energy consumption estimates that are 10-14% lower than other outlooks

Richard Newell, February 16, 2016, Riyadh

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Differences in primary energy consumption data exist among various long-term outlooks (2010 shown here)

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Richard Newell, February 16, 2016, Riyadh

50 100 150 200 250 300 100 200 300 400 500 600 BP U.S. EIA ExxonMobil IEA OPEC million barrels oil-equivalent per day quadrillion Btu Non-hydro Renewables Hydro Nuclear Natural gas Liquids Coal * *

* BP and U.S. EIA do not include non-marketed energy

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Future energy consumption growth varies widely across energy

  • utlook scenarios, depending largely on policy assumptions

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2010-2040 growth range

Outlook sources: IEA 2015, OPEC 2015, USEIA 2013, BP 2015, ExxonMobil 2015, Shell 2013. Note that U.S. EIA and BP estimates omit non-marketed biomass.

Richard Newell, February 16, 2016, Riyadh

History Projections (quadrillion Btu per year, left axis) (million barrels per day of oil equivalent, right axis) 150 200 250 300 350 400 450 300 400 500 600 700 800 900 1980 1990 2000 2010 2020 2030 2040 IEA Historical IEA Current Policies IEA New Policies IEA 450 BP U.S. EIA ExxonMobil OPEC Shell Mountains Shell Oceans primary energy consumption

59% 18%

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Global fuel shares: history and future scenarios

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EIA and BP

  • mit non-

marketed biomass

2040

Richard Newell, February 16, 2016, Riyadh

0% 20% 40% 60% 80% 100% Renewables Nuclear Natural gas Liquids Coal

Outlook sources: IEA 2015, OPEC 2015, USEIA 2013, BP 2015, ExxonMobil 2015, Shell 2013.

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Liquids consumption growth shifts decisively to the East

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Richard Newell, February 16, 2016, Riyadh

History Projections

10 20 30 40 50 60 70 80 1990 2000 2010 2020 2030 2040

West

History Projections

10 20 30 40 50 60 70 80

1990 2000 2010 2020 2030 2040

East

BP Historical BP U.S. EIA ExxonMobil IEA Current Policies IEA New Policies IEA 450 OPEC

million barrels per day

Outlook sources: IEA 2015, OPEC 2015, USEIA 2013, BP 2015, ExxonMobil 2015, Shell 2013.

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For more information

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Richard Newell richard.newell@duke.edu

Richard Newell, February 16, 2016, Riyadh