Energy Perspectives 2015 Long-term macro and market outlook EP2015 IGU Workshop Cartagena Runar...The global centre is in Asia World energy demand per region Bn One of the known knowns:

Energy Perspectives 2015 Long-term macro and market outlook IGU workshop, «What Does COP 21 Mean for the Role of gas?” Cartagena, Columbia, 22 October 2015 Runar Tjersland, Special Advisor 2015-10-14 Classification: Open

Macro and market outlook to 2040 – www.statoil.com/energyperspectives

Energy Perspectives 2015

2 2015-10-14 Classification: Open

A world of volatility and change Hope to be vaguely right, not precisely wrong…

Sources: Thomson Reuters Datastream, DOE, CEIC, IEA

0

200

400

600

800

1997 2002 2007 2012

BrentHHNBPCoal

Commodity prices (real Apr 2015, indexed Feb 1997=100)

0

1000

2000

3000

4000

5000

0

300

600

900

1200

1500

2000 2003 2006 2009 2012

Chinese int. tourists

New Chinese cars

Chinese air passengers

US shale oil prod.

Solar generation (rhs)

Supply and demand factors (indexed 2002=100)

2015-10-14 Classification: Open 3

Long-term forecasts are uncertain

2015-10-14 4 Classification: Open

Climate change, policy, technology, consumers and economy will decide

• Some known unknowns handled by constructing

scenarios

• Energy and climate policies

• Economic growth

• Energy efficiency

• Relative costs and prices driving fuel mix

• A large number of other known unknowns:

• Consumer behaviour

• Cold fusion

• Natural disasters (volcanoes etc.)

• Climate change impact

• … as well as the unknown unknowns …

Sources: The Economist, Financial Times, Google, UN, Statoil, McKinsey & Company, National Geographic, twistedsifter.com

Three scenarios – stories about the future – have been established

Several futures are possible

5

0

20

40

60

80

100

120

2010 2020 2030 2040

Reform

Renewal

Rivalry

Energy intensity in different scenarios Index, 2012=100

CO2 emissions/TPED Index, 2012=100

0

20

40

60

80

100

120

2010 2020 2030 2040

Reform

Renewal

Rivalry

Source: IEA (history), Statoil (projections)

Renewal

Reform Rivalry 2040

2015-10-14 Classification: Open

Economic gravity moves (back) to the east, and so does energy demand

The global centre is in Asia

One of the known knowns: Asia matters

6

World energy demand per region Bn toe

0

4

8

12

16

20

Ref Ren Riv Ref Ren Riv

Rest of world India

China OECD Pacific

OECD Europe OECD North America

2020 2040 2012

Sources: Reddit, IEA, Statoil (projections)


World GDP growth rates 10-year annual growth average, %

Growth is a key driver for energy demand…

7

0

2

4

'13-20 '21-30 '31-40

Reform

Renewal

… and is different in alternative scenarios

World GDP growth rates 10-year annual growth average, %

0

2

4

'13-20 '21-30 '31-40

Reform

Rivalry



14%

24%

24%

10%

4%

13%

11%

Renewal

… depending on growth, efficiency, technology and policies

Energy demand and energy mix differ

8

World energy demand per fuel Bn toe

0

4

8

12

16

20


New renewables Biomass and waste

Hydro Nuclear

Gas Oil

Coal

2020 2040 2012 2012

World energy mix Share of total energy demand in 2012 and 2040 (TPED), %

29%

31%

22%

5%

2% 10% 1%



25%

27% 23%

6%

3%

9%

7%


14%

24%

24%

10%

4%

13%

11%

Renewal



9


0

4

8

12

16

20



Hydro Nuclear

Gas Oil

Coal

2020 2040 2012

29%

31%

22%

5%

2% 10%

1%

Reform



25%

27% 23%

6%

3%

9%

7%


14%

24%

24%

10%

4%

13%

11%

Renewal



10


0

4

8

12

16

20



Hydro Nuclear

Gas Oil

Coal

2020 2040 2012 14%

24%

24%

10%

4%

13%

11%

29%

31%

22%

5%

2% 10%

1%

Renewal




25%

27% 23%

6%

3%

9%

7%

14%

24%

24%

10%

4%

13%

11%

Renewal



11


0

4

8

12

16

20



Hydro Nuclear

Gas Oil

Coal

2020 2040 2012 30%

27%

22%

5%

3%

10%

4%

14%

24%

24%

10%

4%

13%

11%

Rivalry

29%

31%

22%

5%

2% 10% 1%



* Excl. Bio-fuels


Global gas demand Bcm

Oil and gas are here to stay

12

Global oil demand*

Mbd

Considerable need for new investments, irrespective of scenario

0

20

40

60

80

100

120

140

2012 2020 2030 2040

International bunkers Other non-OECDNon-OECD Asia OECDRenewal Rivalry3-6% decline

0

1000

2000

3000

4000

5000

6000

2012 2020 2030 2040

International bunkers Other non-OECDNon-OECD Asia OECDRenewal Rivalry3-6% decline


… in particular in transport and power – this is no walk in the park!

Electricity and renewables Thousand TWh and %

Fuel shares in private road

transport (%)

Source: IHS Global Insight and International Energy Agency (history), Statoil (projections)

Renewal requires large changes

Energy use in transport Bn toe

13

0

1

2

3

Ref Ren Ref Ren

Biofuels Electricity

Gas Oil

Coal

2012 2020 2040

0

20

40

60

80

100

Ref Ren Ref Ren

Biofuels Electricity Gas Oil

2020 2040 2012

0

10

20

30

40

50

0

4

8

12

16

20

Ref Ren Ref Ren

New RES*

New RES share in el (rhs)

El share in final energy (rhs)

2012 2020 2040

* incl. Biomass


… driven by policy, energy intensity, and fuel mix

Source: Statoil, IEA WEO 2014

Energy related CO2 emissions vary considerably

14

World CO2 emissions Bn tons

0

10

20

30

40

50

2012 2020 2030 2040

Reform Renewal Rivalry

IEA NP IEA 450

China CO2 emissions Bn tons

0

5

10

15

2012 2020 2030 2040

Reform Renewal Rivalry

IEA NP IEA 450


So, in summary …

15

• Three very different scenarios developed

• Renewal delivers on sustainability in several

dimensions

– VERY challenging – requires huge investments

– 2-degree target achieved

– Transformation of private transportation and

electricity generation

– Radical assumptions – coal significantly

reduced, but oil and gas are here to stay, for

decades

– Oil and gas demand in 2040 ~ today’s level

• Reform and Rivalry imply higher oil and gas

demand, but an unsustainable development

2012 Renewal

Reform

Rivalry

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Documents

Energy Perspectives 2015 Long-term macro and market outlook EP2015 IGU Workshop Cartagena Runar...The global centre is in Asia World energy demand per region Bn One of the known knowns: