States, and even China’s industry pays almost double the US level. In
Action to reduce the impact of high energy prices does not mean
WEO-2013, large variations in energy prices persist through to 2035,
diminishing efforts to address climate change. Energy-related car-
affecting company strategies and investment decisions in energy-
bon-dioxide emissions are projected to rise by 20% to 2035, leaving
intensive industries. The United States sees its share of global ex-
the world on track for a long-term average temperature increase of
ports of energy-intensive goods slightly increase to 2035, providing
3.6 °C, far above the internationally-agreed 2 °C climate target. The
the clearest indication of the link between relatively low energy prices
report emphasises the importance of carefully designed subsidies to
and the industrial outlook. By contrast, the European Union and Ja-
renewables, which totalled $101 billion in 2012 and expand to $220
pan see their share of global exports decline – a combined loss of
billion in 2035 to support the anticipated level of deployment.
around one-third of their current share. An in-depth focus on oil in WEO-2013 looks at how technology is
55
“Lower energy prices in the United States mean that it is well-placed
opening up new types of resources, such as light tight oil and ultra-
to reap an economic advantage, while higher costs for energy-inten-
deepwater fields, that were until recently considered too difficult or
sive industries in Europe and Japan are set to be a heavy burden,”
expensive to access. Despite new resources being unlocked, na-
says Fatih Birol, IEA Chief Economist.
tional oil companies and their host governments still control 80% of the world’s proven-plus-probable oil reserves. The pace of oil de-
Among the options open to policy makers to mitigate the impact of
mand growth slows steadily, from an average of 1 mb/d per year to
high energy prices, WEO‑2013 highlights the importance of energy
2020 to just 400 kb/d thereafter, as high prices encourage efficiency
efficiency: two-thirds of the economic potential for energy efficiency
and fuel switching, and the decline in OECD oil use accelerates. The
is set to remain untapped in 2035 unless market barriers can be
shift in the balance of oil consumption towards Asia and the Middle
overcome. One such barrier is the pervasive nature of fossil-fuel
East is accompanied by a continued build-up of refining capacity in
subsidies, which incentivise wasteful consumption at a cost of $544
these regions. However, in many OECD countries, declining demand
billion in 2012. Accelerated movement towards a global gas market
intensifies pressure on the refining industry: in the period to 2035,
could also reduce price differentials between regions. Gas market
nearly 10 mb/d of global refinery capacity is at risk of low utilisation
and pricing reforms in the Asia-Pacific region and LNG exports from
rates or closure, with Europe particularly vulnerable.
North America can spur a loosening of the current contractual rigidity of internationally traded gas and its indexation to high oil prices.
Source: IEA press release on World Energy Outlook © OECD/IEA - 12/11/2013