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Energy Security in PECC Region. Dr. David Hong Taiwan Institute of Economic Research 28-30 November 2001. WTI: West Texas Intermediate. World Oil Markets. - PowerPoint PPT Presentation
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TIER 1
Energy Security in PECC RegionEnergy Security in PECC Region
Dr. David Hong Taiwan Institute of Economic Research
28-30 November 2001
TIER 2WTI: West Texas IntermediateWTI: West Texas Intermediate
TIER 3
World Oil Markets World Oil Markets World oil prices initially rose in September following the
terrorist attack, but then fell sharply as OPEC reassured world markets that it would maintain plentiful supplies on world markets. Also enhanced by weakening world oil demand, then West Texas Intermediate(WTI) crude oil spot price averaged $22.6 per barrel in October. Commercial oil stocks in OECD countries are expected to fall well within the average range throughout the forecast.
TIER 4
OIL MARKET VOLATILITY OIL MARKET VOLATILITY
CONTINGENT CAUSESCONTINGENT CAUSES
-Oil suppliers’ Politico-military factors
-Accidental occurrence (e.g. Sept. terrorist attack)
-Market psychology and over reaction STRUCTURAL CAUSESSTRUCTURAL CAUSES
-Supply constraints and rapid growth of demand
-Supplier’s targeted-price policy
-Side effect of market liberalization
-“Green Impacts” + “Dash for Gas”
TIER 5
Source: TIER Calculation based in APEC Energy Data Base (IEEJ)
1999 Crude oil & Petroleum Indigenous Production in PECC Region
24,5188,129
132,052
250
152,003
0
59,879
643 0
32,835
152,630
2,145 4,331 5,179 45
305,099
0 40 3,919
391,865
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000A
ustr
alia
Bru
nei
Can
ada
Chi
le
Chi
na
Hon
g K
ong
Indo
nesi
a
Japa
n
S. K
orea
Mal
aysi
a
Mex
ico
N. Z
eala
nd
P N
Gui
nea
Peru
Phili
ppin
es
Rus
sia
Sing
apor
e
Tai
wan
Thai
land
USA
Countries
Uni
t:KTO
E
TIER 6
PECC Energy Supply Indicators
Crude Oil Proved ReservesPECC Energy Supply Indicators
Crude Oil Proved Reserves
0
10000
20000
30000
40000
50000
Crude Oil (Million barrels), 2000
Aus Bru Can Chil Chin HK Ind JapMal Mex NZ PNG Per Phil Rus Sin
SK CT Tha USA Vie
Source: Energy Information Administration/ APEC
USAUSA
RussiaRussia
MexicoMexicoChinaChina
TIER 7
ECONOMIC AND SOCIAL IMPACTS OF OIL MARKET
VOLATILITY
ECONOMIC AND SOCIAL IMPACTS OF OIL MARKET
VOLATILITY It is essential to secure the adequate oil supply at reasonable price for sound and sustainable economic growth and social development. Yet, the recent oil market volatility is not resource-based. Supply cushion to deal with the fluctuation in supply-demand balance is difficult to work in the short term.
TIER 8
Energy Supply / Demand
In PECC Region
TIER 9
Source: TIER Calculation based in APEC Energy Data Base (IEEJ)
1999 Final Energy Consumption of Asian-Pacific Countries
76,534665
188,549
18,701
575,616
10,65860,741
359,698
136,46526,649
96,94212,991 824 8,563 17,112
482,355
3,56548,54440,293
1,621,312
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000A
ustr
alia
Bru
nei
Can
ada
Chi
le
Chi
na
Hon
g K
ong
Indo
nesi
a
Japa
n
S. K
orea
Mal
aysi
a
Mex
ico
N. Z
eala
nd
P N
Gui
nea
Peru
Phili
ppin
es
Rus
sia
Sing
apor
e
Tai
wan
Thai
land
USA
Countries
Uni
t: K
TOE
TIER 10
Source: TIER Calculation based in APEC Energy Data Base (IEEJ)
1999 Primary Energy Supply in PECC Region
110,2151,837
256,649
23,993
723,622
14,24783,019
511,108
174,66852,878
149,12118,3071,145 9,369 29,953
583,112
20,75676,08660,363
2,254,689
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000A
ustr
alia
Bru
nei
Can
ada
Chi
le
Chi
na
Hon
g K
ong
Indo
nesi
a
Japa
n
S. K
orea
Mal
aysi
a
Mex
ico
N. Z
eala
nd
P N
Gui
nea
Peru
Phili
ppin
es
Rus
sia
Sing
apor
e
Tai
wan
Thai
land
USA
Countries
Uni
t:KTO
E
TIER 11
1999 Excess Energy Supply in PECC Region1999 Excess Energy Supply in PECC Region
132,025
15,564
182,561
-11,751
115,315
-10,658
104,722
-257,917
-105,484
55,773
123,748
1,906 3,730 -645
-6,739
451,119
-3,565
-36,984-13,714
82,454
821,460
-400,000
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
Aus
tral
ia
Bru
nei D
arus
sala
m
Can
ada
Chi
le
Chi
na
Hon
g K
ong,
Chi
na
Indo
nesi
a
Japa
n
Rep
ublic
of
Kor
ea
Mal
aysi
a
Mex
ico
New
Zea
land
Pap
ua N
ew G
uine
a
Per
u
Phi
lippi
nes
Rus
sia
Sin
gapo
re
Chi
nese
Tai
pei
Tha
iland
Uni
ted
Sta
tes
of A
mer
ica
Tot
al
Countries
Uni
t: K
TO
E
Excess Supply
Excess Supply means (Primary Energy Supply) –(Final Energy Consumption).Excess Supply means (Primary Energy Supply) –(Final Energy Consumption).
Source: TIER Calculation based in APEC Energy Data Base (IEEJ)Source: TIER Calculation based in APEC Energy Data Base (IEEJ)
TIER 12
1999 Primary Energy Supply Sources in PECC Region
40%
27%
23%
7%
2%
1%
Crude oil & Petroleum Coal Natural Gas Nuclear Power Hydro Power Geothermal, Solar, etc.
Source: TIER Calculation based in APEC Energy Data Base (IEEJ)
TIER 13
1999 PECC Energy Reserves1999 PECC Energy Reserves
0% 20% 40% 60% 80% 100%
Oil
Natural Gas
Coal
PECC Other Part of the World
Source: TIER Calculation based on B P Amoco Statistical Review of World Energy, 2000
TIER 14
PECC Energy Production/Consumption
Increase in Past 20 years (1980-1999)
PECC Energy Production/Consumption
Increase in Past 20 years (1980-1999)
0% 100% 200% 300% 400% 500%
Total
Hydrolectric
Nuclear
Coal
Natural Gas
Oil
Production Consumption
Source: APEC Report, EIA 2000
TIER 15
Promotion of Natural GasPromotion of Natural Gas Resource Potential in PECC Numbers of LNG, P/L projects being examined or
implemented, eg. China, Korea, Taiwan, ASEAN countries.
Advanced Technologies Advantage as a “Clean Fuel” But constraints are: Price competitiveness, requirement
for large-scale investment in infrastructure buildup.
TIER 16
PECC Energy Supply Indicators
Natural Gas Proved Reserves
PECC Energy Supply Indicators
Natural Gas Proved Reserves
0
50
100
150
200
Natural Gas (Trillion cubic feet),2000
Aus Bru Can Chil Chin HK IndJap Mal Mex NZ PNG Per PhilSin SK CT Tha USA Vie
+ Russia: 1700
Source: Energy Information Administration/ APEC
TIER 17
Promotion of CoalPromotion of Coal Abundant resource potential, eg. China. Top-class production capacity and record, eg. China: 2nd
largest producer. Availability of Australian coal (3rd largest producer) as
regional resource. Price competitiveness Promoted as base-load power source in many economies. But environmental constraints exist (Sox, Nox, Co2
emission). Importance of “clean technology”for further promotion on coal.
TIER 18
PECC Energy Supply Indicator Coal Proved Reserves
PECC Energy Supply Indicator Coal Proved Reserves
0
50
100
150
200
250
300
Coal (Billion short tons), 1998
Aus Bru Can Chil Chin HK Ind JapMal Mex NZ PNG Per Phil Rus SinSK CT Tha USA Vie
Source: Energy Information Administration/ APEC
TIER 19
Nuclear Power Development in PECCNuclear Power Development in PECC
New plants are constructed in Korea and China. Stagnation in US. In most Asia countries, nuclear power is promoted as: 1) Quasi-domestic energy 2) Mainstream of oil alternative 3) Important source of base-load power
TIER 20
Promotion of Energy ConservationPromotion of Energy Conservation Energy conservation has benefits to: Limit energy demand and imports Reduce environment load Enhance economic competitiveness Energy conservation is a top priority in many PECC
economies. Governments set long-term target for energy conservation.
In reality, however, energy conservation is difficult to achieve due to the “income effect”. Energy intensity flattened out or increased in many economies.
TIER 21
Alternative EnergyAlternative Energy
Outlook of Renewable Energy
TIER 22
PECC Domestic Renewable Energy Share of the Primary
Energy supply
PECC Domestic Renewable Energy Share of the Primary
Energy supply
0%
20%
40%
60%
80%
100%
AusBruCanChiChnHK IndJapMalMexNZPerPhiRusSinKorCTThaUSVie
Hydro Solar/Wind/Other Geothermal Biomass
Source: APEC Energy Data Base (IEEJ), 2000
TIER 23
CONSTRAINTS FOR RENEWABLE ENERGYCONSTRAINTS FOR RENEWABLE ENERGY
Relatively low price of fossil fuelsHigh initial investment costsLack of information dissemination Ineffective distribution and
marketing
TIER 24
Outlook of RENEWABLE ENERGYOutlook of RENEWABLE ENERGY The renewable portfolio is diversified geographically in response to
available resources and technologies, and the level and structure of energy demand.
The portfolio is currently dominated by large-scale hydropower and biomass consumption.
But the development of large-scale hydropower will be limited in the future because of substantial environmental and social impacts.
Other renewable energies (solar, wind, geothermal, etc.) are growing rapidly (500-600% in the past two decades), but from a very small base.
Estimated total share continues to be around 2-8% in the next two decades.
TIER 25
Policies for Energy SecurityPolicies for Energy Security
Diversifying Energy Import Sources Strengthening Ties with Oil Producers Investing Overseas Upstream Introducing Oil Producers’ Capital into Domestic
Downstream Market
TIER 26
In principle, pursuit of energy security by each PECC economy can contribute to enhance energy security in whole PECC region.
However, if initiatives to enhance energy security conducted too exclusively, tensions could be generated and escalated among PECC economies, thus damaging regional energy security.
TIER 27
International Strategic Alliance for Energy Security in PECC Region…
International Strategic Alliance for Energy Security in PECC Region…
International Cooperation for Crude Oil Storage International Cooperation for Crude Oil Exploration International Cooperation for Energy Technology
TIER 28
Thank you very much!Thank you very much!