IHS Global Scenarios to 2030
OilExp International Conference
Moscow • 30 September 2010
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© 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142
No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.
IHS Global Scenarios and
IHS CERA Energy Scenarios
Introduction
• The IHS Global Scenarios provide three distinct views of the future to 2030 based on
geopolitical, macroeconomic, and security trends.
• Launched in summer 2010, the IHS Global Scenarios to 2030 and the IHS
CERA Energy Scenarios constitute a major, wide-ranging project designed
to help companies and organizations to plan for the future, evaluate
strategy, test investment decisions, and understand the forces of change
in the world.
• It is the product of a collaborative effort among IHS CERA, IHS Global Insight, IHS
Automotive, IHS Jane's, IHS Herold, IHS Fairplay, member companies and
organizations, and distinguished experts.
-
Scenarios are a framework for thinking about the future and its many uncertainties.
-
Scenarios are different than forecasts. They are a tool for decision makers to build
robust strategies that stand up under a range of alternative futures.
• The IHS CERA Energy Scenarios focus and provide detail on the energy industry
consistent with this global framework. The global oil market is a key element of this
energy analysis.
• This slide deck is meant to provide a high-level understanding of the scenarios as they
pertain to the global oil market.
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IHS CERA_Global Energy
Scenarios_1010
1
Scenario Framework: The 3 Big Questions
• Will major powers
cooperate to enhance
global security and
prosperity-or will
cooperation fail?
Global
GHG deal?
Financial
imbalances?
Technology
innovations?
Protectionism?
• Will major powers avoid a
reoccurrence of
economic turbulence and
preclude long-term
weakness in the global
economy ?
• How quickly and to
what degree will the
world shift to a low
carbon economy?
Nuclear
proliferation?
Role of US and
Europe?
Growth in China
and India?
Enough oil?
Future of
the dollar?
State v. Market?
2
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3 Scenarios Provide Distinct Views on the Big
Questions
Global
Redesign
Metamorphosis
Vortex
3
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Summary of the 3 Scenarios
• GLOBAL REDESIGN. Anxious, difficult transition from world
of concentrated power to broader distribution of wealth and
influence
• METAMORPHOSIS. Strong move toward low carbon
economy, but with difficult trade-offs
• VORTEX. Severe volatility in economic growth and poor
global cooperation
4
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Global Redesign
The Planning Scenario
Level of Global Cooperation and Security
• The reinvigoration of market forces and shared interest among major powers
to expand global trade and investment foster robust economic growth.
Low-carbon Economy?
• Greenhouse gas (GHG) reductions fall short of aspirations, but the long-term
trend of declining carbon intensity of the global economy continues.
• Historically high oil prices and government policy sustain a steady, longterm decline in the energy intensity of the global economy, but not large or
fast enough to satisfy environmental goals.
Economic Growth
• International dialogue on macroeconomic issues helps to moderate volatility
in economic growth.
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IHS CERA_Global Energy
Scenarios_1010
5
Meta(morphosis)
Alternative Scenario
Level of Global Cooperation and Security
• Intense global competition to gain advantage in lower-carbon technology.
• Major GHG emitters agree to multispeed approaches to GHG reductions and
clean energy policies, which encourages investments and attract other
countries over time.
Low-carbon Economy?
• High oil prices and technological innovations lead to a distinct slowdown in
the pace of global GHG emissions.
• Electric vehicles take an increasing share of the light transport market, and
wind, solar, nuclear, and biofuels all play a role in the transformation of the
energy system.
Economic Growth
• The transformation of the energy system requires reallocation of investment
and resources, creating new economic winners and losers.
• Toward the end of the Meta era, economic growth is boosted as more of the
world’s population has access to energy.
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IHS CERA_Global Energy
Scenarios_1010
6
Vortex
Alternative Scenario
Level of Global Cooperation and Security
• Global cooperation suffers during the “Long Slowdown”—an extended
period of weak economic growth following the recession.
• This impairs progress in international trade, diplomatic relations, and efforts
to address climate change.
Low-carbon Economy?
• Environmental and climate change concerns become secondary to more
pressing domestic economic issues.
• However, weak economic performance, rather than policy-induced actions,
help to moderate growth in GHG emissions during the late 2010s.
Economic Growth
• Volatile economic growth returns with a vengeance in the early 2010s as a
second “Great Recession” emerges and hits Asia as well as North America
and Europe.
• The world enters a period of greater volatility in economic cycles than had
been experienced during the previous three decades.
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IHS CERA_Global Energy
Scenarios_1010
7
Global GDP Across IHS Scenarios
Source: IHS Global Insight , IHS CERA Energy Scenarios Summer 2010 data set.
*Calculated on an exchange rate basis.
00708-61
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IHS CERA_Global Energy
Scenarios_1010
8
World Annual Economic Growth Across IHS
Scenarios
Annual
Average
Percent
Change
in Real
GDP
Source: IHS Global Insight, IHS CERA Energy Scenarios Summer 2010 data set.
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IHS CERA_Global Energy
Scenarios_1010
9
Global Oil Demand
Global Liquids Demand
to 2030 by Scenario
120
110
Global Redesign
Meta
Vortex
History
100
Million
Barrels
per Day
90
80
70
60
1990
1995
2000
2005
2010
2015
2020
2025
2030
Source: IHS CERA Energy Scenarios Summer 2010 data set.
Source: IHS CERA Energy Scenarios Summer 2010 data set.
Note: Liquids demand includes petroleum products, biofuels, and synthetic fuels (gas-to-liquids, coal-to-liquids).
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IHS CERA_Global Energy
Scenarios_1010
10
11
Shifts in World Liquids Capacity to 2030 (mbd)
9.53 9.94
4.14
3.14 3.53
10.72 10.44 10.17
5.59
5.08 5.16
4.35 3.80
Canada
3.08
2.18
Northwest Europe
7.17 7.27 7.65 7.54 7.16
2.21
Russia
3.26
3.89
4.90
5.35
Caspian
13.10 13.01
United States
11.72
10.18
11.36
10.97 10.72
8.09
11.13
8.91
9.90 9.54
8.38
12.22 12.63
40.05
38.56
Asia Pacific
34.88
Africa
30.59
28.11
Latin America
Source: IHS CERA.
90509-4
2005
2010
2020
2030
2015
Middle East
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IHS CERA_GO_Rome_RT_0610
Oil Price Trends Across IHS Scenarios
• “Long Aftershock” increases prices until late 2010s; then
prices fall and flatten in real terms.
• Demand growth driven by non-OECD countries.
Global
Redesign
• Demand growth slows in latter half of scenario period.
• Tight distillate market.
• Very high prices in early 2010s due to supply difficulties.
• High prices foster innovation and policy response.
• Electricity begins a major entry into transportation.
Meta
• Oil prices low by end of period.
• Return to “boom and bust” leads to cycles in oil prices.
• Investments and price hard hit by downturn—paves the way
for future price spikes.
Vortex
• Oil alternatives are limited.
• Volatile supply growth.
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IHS CERA_Global Energy
Scenarios_1010
12
WTI Benchmark Crude Price by Scenario
RealPrices
Prices
WTI Crude
Nominal Prices
WTI Crude Prices
160
180
140
120
Global Redesign
Meta
Vortex
History
160
140
120
100
Real 2008
US Dollars
Global Redesign
Meta
Vortex
History
Nominal 100
80
US Dollars
per Barrel
per Barrel
80
60
60
40
40
20
0
1990
20
1995
2000
2005
2010
2015
2020
2025
Source: IHS CERA Energy Scenarios Summer 2010 data set.
2030
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
Source: IHS CERA Energy Scenarios Summer 2010 data set.
Source: IHS CERA Energy Scenarios Summer 2010 data set.
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IHS CERA_Global Energy
Scenarios_1010
13
Global Sales of Plug-inGlobal
Electric
Sales and Battery
Plug-in Hybrid Electric
and Battery Electric Vehicles
Electric Light-duty
Vehicles
50
Global Redesign
Meta
40
Million
Vehicles
Vortex
30
20
10
0
2000
2005
2010
2015
2020
2025
2030
Source: IHS Automotive Scenarios Summer 2010 data set.
Source: IHS Automotive Scenarios Summer 2010 data set.
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IHS CERA_Global Energy
Scenarios_1010
14
Global Biofuels Supply
2030 by Scenario
Globalto
Oil Demand
4.5
4.0
3.5
Global Redesign
Meta
Vortex
History
3.0
Million
Barrels
per Day
2.5
2.0
1.5
1.0
0.5
0.0
1990
1995
2000
2005
2010
2015
2020
2025
2030
Source: IHS CERA Energy Scenarios Summer 2010 data set.
Source: IHS CERA Energy Scenarios Summer 2010 data set.
Note: Biofuels include ethanol, biodiesel, and next-generation biofuels (e.g., cellulosic derived gasoline and diesel).
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IHS CERA_Global Energy
Scenarios_1010
15
Degree of Global Cooperation on Key Issues
Across the Scenarios
Economic
Policy
Low
Medium
Greenhouse
Gas Limits
Prevention Of
Nuclear Proliferation
High
Source: IHS CERA.
00104-9
16
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Comparison of Key Metrics Across Scenarios
Oil price
volatility
Low
Medium
Security
Crisis
Technology
Innovation
High
17
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Few Words About Short Term
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© 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142
No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.
A Multi-Speed Global Economy
• Economies are resilient; the expansion will continue
• But recoveries from financial crises are usually slow
• Asia is on the fast track; Europe is in the slow lane
• Wage and price inflation will stay mild in most regions
• Governments need an “exit strategy” from deficits or financial markets
will impose one
• After a near-term rally, the dollar will depreciate
• Globalization means business cycle synchronization and volatility
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Thank You!
CONFIDENTIAL
© 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142
No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.