1. The End of the Age of Oil Akito Matsumoto
Acting Chief of Commodities Unit
Research Department, IMF
Disclaimer: The views expressed in this presentation are those of the author and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

2. Oil occupied dominant share of primary energy supply, but
Oil’s share of primary energy supply continues to decline
Coal is expected to lose most as renewables getting cheaper
Natural gas supply is expected to grow faster than total energy demand growth
The share of natural gas is expected to increase

3. Oil demand and supply continues to grow
Oil demand “level” is expected to continue to grow at the rate slower than economic growth or total energy demand growth
Efficiency and energy transition (shift to natural gas and renewable) plays a key role

4. The source of oil demand growth
OECD: Peak Demand – reduction in oil demand (aging and slower economic growth)
Non-OECD
Emerging Market Economies
Rise of middle income class leads to increasing automobile demand and other transportation demand. (e.g. jet fuel)
Developing countries
Switching from coal or biomass

5. Peak oil supply? Technological progress U.S. tight oil (shale oil)
Ultra Deepwater, Heavy Oil
U.S. tight oil (shale oil)
Reducing cost to survive with lower oil prices
“stranded assets”
Not all currently proven reserve may not be tapped

6. Technology
Higher oil prices stimulated energy saving technology (Efficiency Gain)
Concerns regarding CO2 and other pollutant emission will play an additional role going forward
Carbon Capture and Utilization (CCU) might be able to save fossil fuels

7. Energy Transitions
Renewables grow faster than fossil fuels as it becomes cheaper
Obstacles: battery technologies and intermittency (causes net load fluctuation)
Natural gas : compete or complement?

8. Climate Change
Without major technological progress, CO2 level is expected to increase.
Policy and technologies are two key areas
Policy (negative for coal and oil, less so for natural gas)
Fossil fuel subsidies
Carbon tax
Pollutant regulations
Technologies
Renewables + Batteries
Efficiencies
Carbon Capture

9. Oil’s future depends on
Economic growth (population growth)
Policy (Subsidy, Carbon Tax, Regulations)
Technology
New type of energy supply (renewables, fuel cell, hydro methane and more)
Efficiency gains
Energy Transitions (to natural gas, renewables)
Carbon Capture
Economists tend to think of “technological” progress as exogenous shocks with a few exceptions. But we should at least keep an eye on technological progress even if we cannot explain well (yet) how technology evolves

10. Thank you!