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
Overview 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 opportunities for improved comparability 2
IEA and OPEC outlooks covered in the report 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 3
Examples of recent progress on data quality and comparability of outlooks Both IEA and OPEC used same baseline years for long-term projections in the outlook, 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. 4
Baseline 2014 liquids data 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 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 6
1.3 mb/d difference in 2014 IEA-OPEC liquids supply associated with FSU & OPEC supply 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 7
A 1.5 mb/d difference in base year 2014 liquids demand contributes a significant portion of demand forecast differences for IEA-OPEC mb/d 97 Short-term world liquids demand 96 95 95.8 1.7 94 94.6 1.7 94.1 93 92 92.8 1.5 92.9 91 91.3 90 89 2014 2015 2016 IEA OPEC 8
Global liquids demand outlook 9
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 mb/d Revisions of 2015 liquids demand growth forecasts 2.5 2.0 1.5 1.0 0.5 0.0-0.5 IEA (World) OPEC (World) IEA (Total Non-OECD) OPEC (Total Non-OECD) IEA (Total OECD) OPEC (Total OECD) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 10
Medium-term demand projection difference mainly comes from Non-OECD regions mb/d 100 98 96 94 92 90 88 (a) World liquids demand 2014 2015 2016 2017 2018 2019 2020 IEA OPEC mb/d 54 52 50 48 46 44 42 (b) OECD and Non-OECD liquids demand IEA (Non-OECD) OPEC (Non-OECD) OPEC (OECD) IEA (OECD) 2014 2015 2016 2017 2018 2019 2020 11
Long-term liquids demand projections vary widely, yet OPEC Reference and IEA New Policy scenarios are within 1 mb/d in 2040 mb/d World liquids demand projections in various scenarios 125 120 115 110 105 100 IEA Current Policies OPEC HEG OPEC Reference IEA New Policies OPEC LEG 95 90 85 IEA 450 ppm 80 2014 2030 2020 2040 12
Global liquids supply outlook 13
Non-OPEC liquids supply growth forecast for 2015 initially dipped, then recovered Revisions of liquids supply forecasts for 2015 mb/d 1.4 1.2 1.0 0.8 0.6 0.4 0.2 IEA (Total Non-OPEC) OPEC (Total Non-OPEC) IEA (OECD) OPEC (OECD) IEA (Non-OECD) OPEC (Non-OECD) 0.0-0.2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 14
Short-term IEA and OPEC forecasts for 2016 show slowing non- OPEC liquids supply growth turning negative mb/d 2.8 2.4 Non-OPEC liquids supply annual growth 2.4 2.2 2.0 1.6 1.2 1.3 1.4 1.3 1 0.8 0.4 0.0-0.4-0.8 2013 2014 2015-0.6 2016-0.4 IEA OPEC 15
Short-term liquids supply growth is led by OPEC crude, while OECD Americas supply declines in 2016 Short-term liquids supply net annual growth forecasts mb/d 2.0 1.6 1.2 1.8 1.5 1.2 1.3 0.8 0.4 0.0-0.4-0.8 IEA 2015 OPEC IEA 2016 OPEC Processing gains OPEC crude OPEC NGLs + unconventionals Non-OECD Other OECD OECD Americas World 16
Medium term Non-OPEC liquids supply growth forecasts still show continued growth mb/d 1.0 0.8 0.6 0.4 0.2 0.0-0.2-0.4 mb/d 1.0 0.8 0.6 0.4 0.2 0.0-0.2-0.4 (a) IEA Outlook 0.7 0.7 0.4 0.5 0.6 0.5 2015 2016 2017 2018 2019 2020 (b) OPEC Outlook 0.7 0.8 0.9 0.3 0.5 0.4 2015 2016 2017 2018 2019 2020 Processing gains Other Non-OECD Europe & Eurasia L. America Other OECD OECD Americas Total Non-OPEC 17
Long-term oil supply scenarios vary widely, yet similar projections for OPEC Reference and IEA New Policies scenarios 2040 liquids supply outlooks in different scenarios mb/d 140 120 100 80 88 9 110 13 39 122 13 44 102 9 34 110 10 115 9 41 45 60 28 40 20 51 58 65 60 60 60 0 450 ppm Scenario New Policies Scenario IEA Current Policies Scenario Low Economic Growth Reference Case OPEC High Economic Growth OPEC NGLs + unconventionals OPEC crude (incl. Venezuela extra heavy) Non-OPEC 18
Oil price assumptions 19
Medium-term price assumptions are similar until they begin to diverge somewhat in 2019 $/bbl 120 Medium-term oil price assumptions (nominal US$) History Assumption 100 80 60 40 20 0 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 OPEC reference basket Brent history / IEA average import price assumption 20
IEA s long-term oil price assumptions are substantially higher than OPEC s $/bbl 160 Long-term oil price assumptions (real 2014 US$) 150 140 120 128 100 80 60 40 20 0 71 83 80 77 95 95 2020 2040 21
Key remaining challenges in comparing IEA and OPEC energy outlooks 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 22
IEA and OPEC in the context of other long-term energy outlooks 23
Challenges in comparing IEA and OPEC projections to other energy outlooks 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 24
Differences in primary energy consumption data exist among various long-term outlooks (2010 shown here) quadrillion Btu 600 million barrels oil-equivalent per day 300 500 400 300 200 100 250 200 150 100 50 Non-hydro Renewables Hydro Nuclear Natural gas Liquids Coal 0 BP* U.S. EIA * ExxonMobil IEA OPEC 0 * BP and U.S. EIA do not include non-marketed energy 25
Future energy consumption growth varies widely across energy outlook scenarios, depending largely on policy assumptions primary energy consumption 900 800 700 600 500 400 (quadrillion Btu per year, left axis) IEA Historical IEA Current Policies IEA New Policies IEA 450 BP U.S. EIA ExxonMobil OPEC Shell Mountains Shell Oceans History (million barrels per day of oil equivalent, right axis) Projections 450 400 350 300 250 200 59% 2010-2040 growth range 18% 300 1980 1990 2000 2010 2020 2030 2040 150 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. 26
Global fuel shares: history and future scenarios 100% EIA and BP omit nonmarketed biomass 80% 60% 40% 20% 0% Renewables Nuclear Natural gas Liquids Coal 2040 Outlook sources: IEA 2015, OPEC 2015, USEIA 2013, BP 2015, ExxonMobil 2015, Shell 2013. 27
million barrels per day Liquids consumption growth shifts decisively to the East 80 History West Projections 80 History East Projections 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 1990 2000 2010 2020 2030 2040 0 1990 2000 2010 2020 2030 2040 BP Historical U.S. EIA IEA Current Policies IEA 450 BP ExxonMobil IEA New Policies OPEC Outlook sources: IEA 2015, OPEC 2015, USEIA 2013, BP 2015, ExxonMobil 2015, Shell 2013. 28
For more information Richard Newell richard.newell@duke.edu 29