Lecture 1 OEME, Energy trends

8/7/2019 Lecture 1 OEME, Energy trends

1/81


2/81

[email protected]

Office hours on Tuesdays 11am- noon


3/81

Readings availability

Required and Optional Readings will be on the Blackboard, except:

Background reading: Daniel Yergin, The Prize: The Epic Quest for Oil,

Money, and Power and Leonardo Maugeri, The Age of Oil

You are expected to read these books in parallel with class proceeding. Theyare fun to read anyhow.

Readings MUST be completed IN ADVANCE of each class.

Beyond required readings, you are encouraged to browse through optional

readings and recommended websites and read things you deem importantwith regard to the course

You are not expected to read everything: you should use your judgment inselecting what is truly important.


4/81

Readings

Too much to read You should:

Learn to read selectively

Make sure that you can retrieve, not necessarilyrecall, relevant information

Distill your own qualified opinion


5/81

Requirements

A mid term and a final

Precept participation and attendance

Short (ca. 500 words) professional memo onone out of three topics proposed

You will be able to use all course material and

sources Topics will be drawn from current developments


6/81

Syllabus

1) Global Energy Trends

2) Oil Reserves

3) Refining and Transporting 4) Oil Markets and OPEC

5) Oil Companies

6) Oil and the State in the Middle East


7/81

Syllabus

7) Economic Development and Domestic

Energy Requirements

8) Middle East Oil and International Politics 9) Natural Gas

10) Geopolitics of Natural Gas

11) Middle East Oil Production Challenges

12) Beyond Oil: Renewables and Nuclear


8/81

Global Energy Trends


9/81

Energy Market Factors

The current energy earthquake is the result of

the clash of several tectonic plates

Finance

Energy

Globalization and division of labor

Military power

Global governance

Epicenters: US/ OECD, China, Middle East


10/81

Energy stress lines

Insufficient investment

Huge gaps in energy consumption standards Demand growth and supply bottlenecks

Global warming

CURRENT TRENDS ARE NOT SUSTAINABLE


11/81


12/81


13/81

C

n

Petrochemical

Products


14/81

Final Energy Consumption

Source: REN 21: RenewablesGlobal Status Report 2007

Renewable Energy Share of GlobalF

inal Energy Consumption, 2006


15/81


16/81

C

n


17/81


18/81


19/81

Source: EIA, International Energy Outlook 2010


20/81


21/81

Source: EIA, International Energy Outlook 2010


22/81


23/81


24/81


25/81


26/81


27/81


28/81


29/81


30/81


31/81


32/81


33/81


34/81


35/81


36/81

Source: Der

Spiegel

German Energy Change Strategy: 50% Renewables by 2050 (2008:

7.1% of total energy cons./ 12.5% of electricity)


37/81

Source: Der Spiegel

German Renewable Energy Mix 2008 in %


38/81

Source: Der Spiegel


39/81


40/81

Challenges for German Energy Change

Concept:

Expansion of Energy Storage Capacity

Expansion of Remaining Life Period of Nuclear

Power Plants

Expansion of usage of electric cars Efficiency gains in electricity consumption of 28%

realistic?

New Electricity Highways from North (offshore

wind power) to South Constant Balancing of Variabilities in the Grid and

use of Biogas

Better Supply/ Demand Management via Smart

Grids


41/81

A word about scenarios 1

Global energy scenarios are complex only

few institutions can afford to produce them

The most widely quoted are IEAs and EIAs;

also to be considered: OPEC (for oil), EU

Commission, Shell; other institutions produce

occasional scenarios

BP excellent for historical data


42/81

A word about scenarios 2

Scenarios are not meant to be realistic images of thefuture

They extrapolate trends under certain assumptions

They allow exploring the sustainability or coherence ofpolicies

They generally contain one or more messages

They reflect the politics of the institution producing them


43/81


44/81


45/81


46/81


47/81


48/81

Food for Thought

$312 billion the cost of consumption

subsidies to fossil fuels in 2009.

$57 billion the cost of support given to

renewable energy in 2009.

$36 billion per year the cost of ending

global energy poverty by 2030.


49/81


50/81

Demand in 2035 will be 99 mbpd with the remaining 3mbpd coming from processing gains.

Non-OPEC total output will remain stable until 2025 with NGL and unconventional oil

offsetting declining crude oil production. After 2025 total Non-OPEC output will start to fall.


51/81


52/81


53/81


54/81


55/81


56/81


57/81


58/81


59/81


60/81


61/81


62/81


63/81


64/81


65/81


66/81

Cancun Agreement

Rich states should reduce emissions by 25 to 40 per cent from 1990levels by 2020.

A fund of US$30 billion a year will be established immediatelybetween 2010 and 2012 to help poor states combat the effects ofglobal warming.

By 2020, a US$100bn fund will be established for the samepurpose.

Most important for the ME oil producers, the summit agreed tomake CCS, a technology that captures emissions and buries them,eligible for funding under a United Nations clean technologyscheme (CDM). Until now, the programme has focused on

renewable energy, energy efficiency and limiting the emissionsfrom landfills. The proposal was submitted by Qatar in November.

Besides the UAE, the proposal enjoyed the support of Saudi Arabiaand Norway as well as coal-dependent states such as Australia.


67/81


68/81


69/81


70/81


71/81


72/81


73/81


74/81

Energy and Poverty


75/81

Energy and Poverty

Energy Poverty: Annual Deaths from


76/81

OECD/IEA - 2007

Energy Poverty: Annual Deaths fromIndoor Air Pollution

The number of people using dirty traditional biomass forcooking is set to grow from 2.5 billion now to 2.7 billion in

2030 absent new policies

2.8

1.6

1.2 1.3

0

1

2

3

Malaria Smoke from

biomass

Tuberculosis HIV/AIDS

millions

Source: World Health Organization


77/81

Energy and Poverty


78/81


79/81


80/81


81/81

Documents

Lecture 1 OEME, Energy trends