Current Power and Energy Landscape Glen Sweetnam Energy Information Administration Post Petroleum Energetics Conference McLean, VA June 17, 2008 1

International Energy Outlook: Major Trends World energy use is expected to rise by 57 percent between 2004 and 2030. Non-OECD Asia (especially China and India) energy use is expected to increase by 136%. The Middle East accounts for substantial shares of the world’s increase in liquids (45% of the world total) and natural gas (22%) High world oil prices encourage the production of unconventional liquids; 10.5 million barrels per day or 9% of total liquids supply by 2030. Coal is the fastest growing energy sources worldwide - increasing by 2.2% per year. Natural gas and renewables each increase by 1.9% per year. Liquids grow by 1.4% per year. Despite high oil and gas prices, liquids and natural gas are expected to provide 58% of the world’s primary energy in 2030. Energy-related carbon dioxide emissions increase by 60 percent between 2004 and 2030. 2

World Marketed Energy Use: OECD and Non-OECD History Projections 404 Non-OECD 298 240 OECD 207 World energy consumption grows from 447 quadrillion in 2004 to 702 quadrillion Btu in 2030, an average annual increase of 1.8 percent. The strongest growth is projected for the non-OECD member countries, where energy use is nearly twice as high as its 2004 level by 2030. In the OECD economies, energy use is projected to grow much more slowly, rising by 0.8 percent per year compared to the non-OECD’s 2.6 percent per year. The robust projected growth in energy demand in the non-OECD means that non-OECD countries will surpass energy use in the OECD by 2010; by 2030, the non-OECD consumes 35 percent more energy than the OECD countries. 3 Source: EIA, IEO2007

Average Annual GDP and Population Growth for Selected Regions, 2004-2030 GDP expressed in terms of purchasing power parity. Countries with high economic growth rates (high productivity) are driving the increases in energy use. Although the U.S. GDP is projected to grow by 2.9% per year and population 0.8 percent per year; many of the non-OECD countries—China, India, Russia, etc. will see much higher annual GDP growth, driving increases in energy demand. United States: 2.9% per year (GDP) and 0.8% per year (population) OECD Europe: 2.3% per year (GDP) and 0.2% per year (population) Japan: 1.1% per year (GDP) and -0.2% per year (population) South Korea: 3.5% per year (GDP) and 0.1% per year (population) China: 6.5% per year (GDP) and 0.4% per year (population) India: 5.7% per year (GDP) and 1.1% per year (population) Africa: 4.8% per year (GDP) and 1.9% per year (population) Middle East: 4.2% per year (GDP) and 1.8% per year (population) Russia: 3.7% per year (GDP) and -0.5% per year (population) Brazil: 3.4% per year (GDP) and 1.0% per year (population) 4 Source: EIA, IEO2007

World Electric Power Generation by Region, 1980-2030 17.2 Non-OECD 13.2 OECD 9.5 Worldwide, electricity generation in 2030 is projected to total 30.4 trillion kilowatthours, nearly double the 2004 total of 16.4 trillion kilowatthours. Although the non-OECD nations consumed 26 percent less electricity than the OECD nations in 2004, total electricity generation in the non-OECD region in 2030 is projected to exceed generation in the OECD by 30 percent. The strongest growth in net electricity consumption is projected for the non-OECD region, averaging 3.5 percent per year in the IEO2007 reference case. Robust economic growth in many of the non-OECD countries is expected to boost demand for electricity to run newly purchased home appliances for air conditioning, cooking, space and water heating, and refrigeration and to support the expansion of commercial services, including hospitals, office buildings, and shopping malls. In the OECD nations, where infrastructures are well established and population growth is slower, electricity generation is expected to grow by 1.3 percent per year on average over the projection period. 7.0 History Projections 5 Source: EIA, IEO2007

World Oil Prices in Three World Oil Price Cases, 1980-2030 $157 $95 $58 Included history through 2006 here, but used AEO2007 for 2007-2030. In AEO2007, reference case prices in 2007 = $70.28 and in 2008 = $68.76. July STEO 2007 = $65.56 and 2008 = $66.92. Couldn’t get history from EIA in nominal prior to 1986, so I used BP Statistical Review of World Energy 2007 (original source: Platts). History Projections 6 Source: EIA, AEO2007

World Electricity Generation by Fuel 7 Source: EIA, IEO2007

World Marketed Energy Use by Fuel Type History Projections 34% Liquids 28% 38% Coal 24% 26% Natural Gas Share of World Total 23% Renewables 8% 7% 6% 6% Nuclear 8 Source: EIA, IEO2007

World Liquids Consumption by Region, 2004 and 2030 7.0 15.0 0.2 Increase in million b/d 0.8 4.3 4.1 1.5 2.1 9 Source: EIA, IEO2007

2005 Proved Oil Reserves and Projected Total Liquids Consumption from 2004 through 2030 (billion barrels) Proved oil reserves as of 1/1/2008 (from Oil & Gas Journal) Cumulative Liquids Consumption over the 2004 to 2030 period. 10 Source: I.H.S. Energy, 2007

Estimated Reserve Ownership - 2006 6 % 6 % 11 % 77 % World Wide Proven Oil Reserves: 1,148 Billion Barrels 11 Source: PFC Energy, 2006

World Liquids Production, 2004-2030 118 Total Non-OPEC (Conventional) 54 53 OPEC (Conventional) Unconventional 10 12 Source: EIA, IEO2007

Non-OPEC Producing Regions With More than a One Million Barrel Per Day Increase in Total Production Over the Forecast Period, 2005 and 2030 13 Source: EIA, IEO2007

OPEC Conventional Liquids Production 14 Source: EIA, IEO2007

World Unconventional Liquids Production in the Reference Case, 1980-2030 History Projections The world oil prices in the IEO2007 reference case—and in the high world oil price case—are projected to make previously uneconomical, unconventional resources available. In 2004, world production of unconventional liquids totaled only 2.6 million barrels per day; in 2030, in the reference case, unconventional liquids production totals 10.5 million barrels per day and accounts for nearly 9 percent of total world liquids production. Oil sands production is expected to grow by 2.5 million b/d between 2005 and 2030; coal-to-liquids by about 2 million b/d; biofuels by 1.6 million b/d; and gas-to-liquids and ultra heavy by about 1 million b/d each. Note: “Other” includes shale oils and other unidentified sources of unconventional liquid fuels. Source: EIA, IEO2007 15

World Coal Consumption, 2004-2030 16 Source: EIA, IEO2007

World Natural Gas Consumption, 2004-2030 17 Source: EIA, IEO2007

World Natural Gas Production by Region, 2004-2030 18 Source: EIA, IEO2007

World Natural Gas Reserves, 2008 (trillion cubic feet) 2,020 167 2,549 545 415 490 Source: Oil & Gas Journal, “Worldwide Look at Reserves and Production,” December 24, 2007, pp. 25-28 19

World Renewable Energy Use, 2004-2030 OECD Non-OECD 20 Source: EIA, IEO2007

World Nuclear Generating Capacity by Region, 2004 and 2030 21 Source: EIA, IEO2007

World Energy-Related Carbon Dioxide Emissions by Fuel Type History Projections Total 43 Coal 36 40 Liquids 21 39 Natural Gas 20 22 Source: EIA, IEO2007

World Carbon Dioxide Emissions by Region 23 Source: EIA, IEO2007

Oil prices have varied widely over the last 100 years Included history through 2006 here, but used AEO2007 for 2007-2030. In AEO2007, reference case prices in 2007 = $70.28 and in 2008 = $68.76. July STEO 2007 = $65.56 and 2008 = $66.92. Couldn’t get history from EIA in nominal prior to 1986, so I used BP Statistical Review of World Energy 2007 (original source: Platts). Source: BP Statistical Review of World Energy, June 2007 (1970-1980); EIA, AEO2007 24

What’s Different This Time 1973 - 85 2003 - 2015 Liquids Demand + 3 + 17 MMB/D Non-OPEC Supply + 13 + 4 Unconventional ≈ 0 OPEC Production - 14 + 9 First period totals do not add due to inventory changes, refinery gain, and rounding 25

Examples of Special Analyses Periodic Reports Petroleum Status and Natural Gas Storage Reports, weekly Short-Term Energy Outlook, monthly Annual Energy Outlook 2007, February 2007 International Energy Outlook 2007, May 2007 Examples of Special Analyses Long-term Oil Scenarios, Looking Beyond 2030, April 2008 Why are Oil Prices So High, November 2007 The Global Liquefied Natural Gas Market: Status and Outlook, Dec 2003 “Restricted Natural Gas Supply Case,” Annual Energy Outlook 2005 www.eia.doe.gov Glen Sweetnam glen.sweetnam@eia.doe.gov 26