Long-Term Energy Outlook · 2019. 1. 30. · World energy consumption: Coal not growing and could fall faster; renewables growing the fastest; electricity is the largest energy user

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Long-Term Energy Outlook Trends, Challenges, and Opportunities in a Rapidly Evolving System

Adam Sieminski

September 29th, 2017

Document 2

Key Takeaways

$

The Global Energy System No major near-term transformation likely

owing to the momentum advantage of

existing energy networks

The Climate Challenge Emission reduction targets agreed at

Paris are not sufficient to meet the

450ppm goal

Behavioral Economics Uncertainty in consumer behavior is a key

component of deployment in renewables

and mobility developments

Cost Structure Uncertainties Forecasts for renewable energy have been

hampered by rapid improvements in

technology and materials

2 Source: CSIS

Economic activity and population growth drive energy demand

relative fuel cost, government policies, and behavior set mix

GDP and population growth drive energy Global GDP rising 3.7% 2015-2030; population up 1.1 billion (90% in non-OECD)

Disruptive technology could upset the consensus Reference case projections are not meant to be forecasts

Electricity demand Fastest-growing form of end-use energy consumption, rising 1.5% per year

Policy can shape fuel mix Efforts to diversify fuel mix favor non-fossil penetration in most key markets

Efficiency & consumer behavior Improving efficiency & shifts in consumer behaviors reducing the energy intensity of

the world economy

?

3 Source: CSIS

Although population and per capita output continue to rise, energy and

carbon intensity are projected to continue to fall in the EIA Reference Case

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990 2015 2040

0

10

20

30

40

50

60

1990 2015 2040

0

1

2

3

4

5

6

7

8

9

10

1990 2015 2040

0

10

20

30

40

50

60

70

1990 2015 2040

Population Million people

Per capita gross

domestic product Thousand dollars

Carbon intensity Metric tons CO2 per billion Btu

Energy intensity Thousand Btu per dollar

Non-OECD

OECD

Source: EIA, International Energy Outlook 2017 4

World primary energy consumption: non-OECD growth dominates

0

200

400

600

800

1990 2000 2010 2015 2020 2030 2040 2050

Non-OECD

Middle East

Africa

Americas

Europe

and Eurasia

Asia

OECD

Quadrillion Btu

5 Source: EIA, International Energy Outlook 2017

World energy consumption: Coal not growing and could fall faster;

renewables growing the fastest; electricity is the largest energy user

0

50

100

150

200

250

1990 2000 2010 2020 2030 2040

Petroleum and other liquids

Natural gas

Coal

Renewables

Nuclear


32% 31%

15% 15%

12% 10% 3%

3% 13%

14%

25%

27%

0

100

200

300

400

500

600

700

2015 2030

Electricity

Losses

Electricity

Consumption

Biofuel

Coal

Natural Gas

Petroleum and

other liquids

World energy consumption by fuel source

Quadrillion Btu

World energy consumption by fuel (with electricity separated)

Quadrillion Btu

Oil Markets

7

Current global oil price cycle not over yet: Lower prices to prevail for longer

$0

$20

$40

$60

$80

$100

$120

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Crude oil prices in real 2015 US dollars and nominal US dollars

An

nu

al a

ve

rag

e p

rice p

er

barr

el

Shale Decade

2010s

China Decade

2000s

Anything but Oil Decade

1980s

OPEC Decade

1970s

Texas Decade

1960s

*1960-83 prices – Arabian Light; 1984-2017 Dated Brent

Lost Decade

1990s

$ 2016 (deflated using U.S. CPI) $ Money of the day

Source: BP Statistical Review of Energy (data) 8

0

20

40

60

80

100

120

140

2015 2020 2025 2030 2035 2040

Sectoral shares of world liquids use hold relatively constant in the

EIA Reference Case even as total consumption increases

Quadrillion Btu

Transportation

Industrial

Buildings Electricity

54%

36%

6% 4%

56%

36%

5% 2%

Note: Percentages express a sector’s liquids consumption compared to total use of these fuels across all end uses.


Peak demand depends on GDP growth, efficiency trends, climate policy

and a host of other factors

10

Million barrels per day

Source: BP, Energy Outlook 2017


Uncertainty for future oil demand

11

60

70

80

90

100

110

120

2010 2020 2030 2040 2050

Statoil (Reform)

Statoil (Renewal)

Statoil (Rivalry)

Exxon

CNPC

BP

IEA (New Policies)

IEA (Current Policies)

IEA (450 Scenario)

EIA

Total (Peak forecast)

Shell (Peak forecast)

OPEC (Reference)

IHS (Autonomy)

Source: CSIS

Electricity Markets and Renewable Energy

12

OECD and non-OECD net electricity generation

Trillion kilowatt-hours

World electricity use by sector

Quadrillion Btu

Net electricity generation in non-OECD countries increases twice as fast as in the OECD

with building use being a major contributor to growth in the EIA Reference Case

0

5

10

15

20

25

1990 2000 2010 2020 2030 2040

non-OECD

OECD

0

10

20

30

40

50

2010 2015 2020 2025 2030 2035 2040

Industrial

Residential

Commercial

Transportation


0

5

10

15

20

25

30

35

40

2010 2015 2020 2025 2030 2035 20400%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040

World electricity generation by fuel


Share of net electricity generation

Percent

In the EIA Reference Case, renewables and natural gas provide much of the growth in

electricity generation with their combined share of the total rising to 57% in 2040

Liquids Nuclear

Natural gas

Coal

Renewables


0

2

4

6

8

10

12

2010 2015 2020 2025 2030 2035 20400%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040

World net electricity generation from renewable power


Share of renewable energy

Percent

Wind and solar dominate growth in renewables and represent two-thirds

of related capacity additions by 2040

Other

Geothermal

Solar

Wind

Hydropower


Disruptions

16

Key innovations/assumptions that could change the consensus

energy outlook

17

• Economic / population growth trends

• Innovations in Buildings / Industry / Transportation efficiency

• Electric vehicles / Autonomous vehicles

• Wind / Solar cost reductions

• Utility and grid-scale batteries / super-grids / distributed power

• Shale – enhanced recovery rates

• Automated drilling /smarter completions and tie-ins

• Carbon tax, fee / Carbon capture, use, and sequestration (CCUS)

• Nuclear: Small Modular Reactors (SMRs) / Fusion

Source: CSIS

Mb/d

Digital revolution

15

20

25

Electric revolution

Mobility revolution scenarios: Impact on oil demand in cars in 2035

Mb/d

15

20

25

18 Source: BP, Energy Outlook 2017

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Bakken

Eagle Ford

Marcellus

Woodford

Haynesville

Fayetteville

Barnett

Today, new shale plays

supports 60% of US gas

production The Marcellus

Shale alone

now produces

more than 6.5

Tcf per yr of

gas.

More than

Canada, Iran

or Qatar…

Shale revolution is not necessarily over – technology advancements continue

Bcf/d

Source: Frank O’Sullivan 19

Paris & Policy

20

Global greenhouse gas emissions: not just fossil fuels

21 Source: IPCCC, Climate Change 2014 Report

Billion metric tons

Energy-related carbon dioxide emissions by fuel

0

2

4

6

8

10

12

14

16

18

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

coal

liquids

natural gas

2015


The 450 Scenario: How might that look?

Source: IEA, World Energy Outlook 2016

Global Oil Demand


23

20

30

40

1995 2005 2015 2025 2035

Base case

Faster transition

Even faster transition

Faster transition pathways

0 2 4 6 8 10

Transport

Industry &Buildings

CCUS*

Power

Faster transition

Even faster transition

*Carbon capture, use and storage

(predominantly in power sector)

Billion tonnes CO2 Billion tonnes CO2 in 2035

Carbon emissions Reductions in emissions versus base case

24 Source: BP, Energy Outlook 2017

Perversity, futility, and jeopardy: Why change is resisted

Source: The Rhetoric of Reaction, by Albert O. Hirschman

25

Perversity thesis

Any purposeful action to improve some feature of the political,

social, or economic order will make it (or something else) worse

Futility thesis

Attempts at transformation will be futile - they will simply fail to

"make a dent“ in the problem

Jeopardy thesis

Argues that the cost of the proposed change or reform is too high

as it endangers some existing order

Snapshot of key energy issues by region/country

Source: CSIS 26

For more information on CSIS…

The CSIS Energy and National Security Program is a recognized and respected leader in

understanding the shifting global and domestic energy landscape

• Analyzing and explaining the intersection of policy, market, and technological developments

• Collaborating with government, industry, academia and nonprofits leaders

• Assisting decision makers to craft smart energy policies that balance economic, environmental,

and security priorities

www.csis.org/energy

Adam Sieminski

[email protected] +1 202-775-3288

James R. Schlesinger Chair for Energy & Geopolitics

Center for Strategic and International Studies

1616 Rhode Island Avenue NW Washington, DC 20036

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Long-Term Energy Outlook · 2019. 1. 30. · World energy consumption: Coal not growing and could fall faster; renewables growing the fastest; electricity is the largest energy user

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