 Thank you, Quentin. Good morning everyone. It is a real pleasure to be here back in Australia on a lovely winter's day which puts to shame the summer days that we're suffering in London at the moment and swap this weather anytime. It is indeed the 61st edition of our annual review of World Energy and each year what we try and do is look back at the past year's data so we're looking at 2011 and trying to tease out the main stories from that year and what does it tell us about long term trends and the way the markets operate. The main thing for this year is really all around the disruptions that we saw in 2011 and how the global energy system coped with those disruptions and what lessons, if any, we can draw from the adjustment. The lasting memories of 2011 are likely to be of human hope and tragedy of courage and frailty in the face of natural disaster and political upheaval. The World of Energy, which is the focus of this review, those events translated into large and unpredictable disruptions in supply and demand. Quantifying the disruptions is where we're going to start. Political unrest and violence caused loss of oil supply and gas production in parts of the Arab world. The loss of Libyan oil exports alone is at 1.2 million barrels a day disruption. If you add in the outages of gas from Libya and oil supply from elsewhere in the Arab world, that was a total decline in excess of 72 million tonnes of oil equivalent and that's roughly 11% of European Union oil consumption, for example. It's a large number. Of course in Japan, with the tragic events surrounding the earthquake and tsunami, we had the shutdown of Fukushima, followed soon after by eventually the shutdown of all the Japanese nuclear reactors. There was also coal damage to coal-fired power generation capacity in Japan and German nuclear reactors were shut down in response. If you add all of that up together, that's the loss of 43 million tonnes of oil equivalent of energy. Roughly a third of Asia's nuclear output or 7% of world nuclear output. So large shocks to the system. In addition, in 2011, we also saw for the first time ever an annual average oil price above $100 a barrel, the first release of strategic petroleum reserves since 2005, the largest increase in OPEC production since 2008, an exceptional swing in European weather from the relatively cold year to the end year and here in Australia, of course, huge floods which had a big impact on coal production. So it was anything but a boring year in 2011. And yet, when you look at the aggregate data, what was happening to total energy consumption in the world, nothing out of the ordinary appears. It appears to be a smooth year, everything on trend. GDP and energy consumption both grew in 2011 at or about their 10-year average growth rate. GDP 3.7%, slightly faster than primary energy consumption growth 2.5%, that gives you an improvement in energy intensity, an amount of energy per unit of GDP of 1.1%, that's all in line with long-run 10-year trends. And as we'll see, other trends were also in place. The evolution of fuel shares, for example, was brought in line with long-term trends with the obvious exception of nuclear power. The first place where we really see an indication that there was something else going on is in prices. We had large increases in prices across most fuels and most geographies. Oil prices measured by dates have burnt up 40% to $111 per barrel. That's a record in nominal money of the day terms. If you want real inflation and adjusted prices, you have to go all the way back to 1864 to find a higher price. Of course, in 1864, that's just a few people swapping a few barrels in a hotel in Pennsylvania because it doesn't really count. So very high prices for oil. For coal, if you add together the coal market prices that we've published in the review, they increased by 24%, it gets to increase in Europe. Gas prices in the US down. Gas prices down in the US, but elsewhere outside of the US, gas prices rose. Many of those gas prices, of course, are due to oil prices, so they naturally went up with oil prices, and spot prices rose as well. So pretty much everything outside of the US was increasing. Supply disruptions are one plausible explanation for what was going on. The other usual suspect is the economy. Something happening in economic growth. When we look at the economic data, there's nothing much there to indicate an abnormal year in terms of pressure on energy demand and prices. Global economy grew by 3.7% in purchasing power power returns, 2.7% in market exchange rates, lower than 2010, but very much in line with long-run and 10-year averages. As is now customary, non-OECDs have developed in the economy's outpaced OECD growth. They contributed more than three quarters of the growth in the global economy last year, but for both camps, OECD and non-OECD, there's pretty much on trend in terms of economic growth. There was, of course, volatility and disparities within each of those camps, but particularly in the OECD in 2011. For Japan, the pathway, of course, determined by the earthquake in tsunami, growth in the US into tentative recovery mode. Europe, the way we phrase it, is still coping with unresolved issues in the unified currency area, and it's still here. Both those developments are still with us. The world is going through an adjustment to a post-menstrual crisis world, with slightly lower growth rates. We're starting to see repercussions about even in places like China and India now, but that's really an issue for 2012, wasn't an issue for 2011. When you're adding a primary energy growth, again, nothing out of the ordinary is at the annual level. The big picture is no extraordinary impact from the economy on an energy demand, composition of fuels, in line with long-term trends. Really, to start seeing a deviation from trend, you have to split out non-OECD and OECD. So the non-OECD countries, energy consumption growth 5.3%, bang on line with the 10-year average growth rate. China, of course, growing very rapidly, 8.8% increase in energy consumption there. That's equivalent to adding the entire annual consumption of energy of the UK, or if you prefer one and a half Australia's, just one year's growth in China. Every year we see China passing another milestone. In 2011, China overtook the US to become the world's largest power producer. It was power generator in the world. So that's all as expected on trend for the non-OECD. OECD, in contrast, there was a decline in energy consumption of not 1.8%, despite average GDP growth. This is now the third and the last four years where we've seen a decline in energy consumption in the OECD. What happened in 2011? We've already had three reasons why energy consumption declined. First of all, the price increase, high prices, particularly high oil prices. For the OECD, there's relatively little subsidisation of fuel prices, so an increase in international prices feeds directly through to consumer prices and consumers' response. And we've certainly seen that in the OECD. In the US, for example, energy consumption down 0.4% in 2011, driven by oil and oil is where we've seen the largest increase in prices. The second reason for the decline for Kashima, so Japan, the world's third largest economy, energy consumption there, declined by 5%. It hasn't noticed all the impact. Finally, third reason, Europe experienced a significant shift in the weather from a cold year to a warm year, almost a record switch in the heating degree days, and that was the key reason behind a 3.1% decline in European energy consumption. These energy dislocations in the OECD give us another indication of how the markets cope with the disruptions. Just to summarise in a nutshell, three major adjustments took place. First of all, an increase in oil supplies dropped set the Libyan outage, most notably from Saudi Arabia. Together with flexibility in trading and refining, allowed the heavier Saudi crews to replace the lost Libyan barrels. Secondly, there was a diversion of natural gas which had been heading to Europe towards Asia to meet the increased demand for gas, particularly in Japan. Finally, there was a release of coal from the Americas, facilitated by the availability of cheap gas, and we'll talk more about this later, which helped gas to replace gas in Europe. So coal was released from the Americas, came to Europe and that allowed gas to be diverted to Asia. I'll tell you in more detail as we go fuel by fuel. Starting with oil. Oil markets experienced oil turbulence in 2011, and still have this year, in 2012. Oil prices rose substantially. The date of pregnancy set up 40% to $111 a barrel, record in money in the day terms. Prices began the year around $90 a barrel, and then rose very sharply to about $127 a barrel following the loss of Libyan supplies. Modulated thereafter, as we had a combination of the economy weakening, oil demand growth weakening, OECD nations released 35 million barrels of strategic petroleum reserves, and OPEC producers with a bit of a lag eventually started to replace those lots of Libyan barrels. Earlier this year, of course in 2012, we had a price spike around the stand-up with a round on nuclear. That, of course, concerns about supply disruption. Those fears seem to have been calm when they come down, but for now they're out of the way. We're worrying more at the moment about the state of the global economy, so at the moment the oil prices back down around $90 and it tends to go up and down according to people's sentiment about the global economy. Second key development in oil markets was the massive $16 gap that opened up between two of the key market prices, Brent and WTI, West Texas and the media. These are very similar great qualities of crude and they normally track each other very closely. Big gap opened up between them and that was due to infrastructure constraints in the U.S. WTI, West Texas and the media is in effect the inland U.S. price. A lot of suppliers coming on available in that area couldn't get to the coast, and more about pipeline capacity and therefore disconnect between that price and the sea-bond price, which is Brent. We'll hear more about that later. The main factor driving prices up last year was that decline in Libyan supply, $1.2 million a day. That was the largest decline in the country's oil output we've seen for 20 years since the aftermath of the Soviet Union. It was a significant event. Several other countries in the Middle East and North Africa also experienced losses, which are still there. When you look at the aggregate data you don't see those losses. The increase in the oil production is $1.2 million a day. Virtually all the increase came from OPEC, which includes Libya. Reason of course is a massive increase in oil production from the other OPEC producers. They increased output 2.5 million miles a day. Eventually meeting not only the loss of Libyan crew but also providing for the growth in oil production. Saudi Arabia alone increased production by $1.2 million a day for a record level, $11.2 million a day. The US, Canada, Russia and Colombia offset and continued declines in mature provinces such as the North Sea, the UK and Norway in particular where they decline. Extended outages in a number of countries like Azerbaijan and biofuels were unusually flat last year in 2011 due to bad weather in Brazil which hampered ethanol production. Now notice there the increase in US supply turns up on the chart. This is a very important part of the oil supply story, the striking shift in US oil production. The US had the largest increase in non-OPEC oil production for the third year running and this is largely thanks for a switch in drilling activity from gas which has a low price to liquids or oil which has a high price and it's the application now of techniques that have been developed for shale gas to oil shale liquids and that's proven extremely productive. I'm not sure you can quite see this small paint here but the Tentas in North Dakota that shale plays, that shale liquids. Very strong growth and it's continuing this year. Combined with rising supply from Canada and Alberta this was the surge in production which meant there was too much oil in the inland areas of the US and created that disconnect with rent. There's an important lesson behind all these developments. Canada and the US both have very open and competitive investment in property regimes and it plays out and you see that in the switch between gas drilling and oil drilling, that happens very quickly in the short term and the long term counterpart is very rapid developments of new technology, innovation and deployment of that technology and it's no accident when you see all this supply growth in deployment of new technologies happening in North America. On consumption, oil consumption growth is weak in 2011. Global oil consumption is up just to 0.7% about half a 10 year average rate of growth and for the 12th year in a row oil share in both energy fell. On the surface, oil consumption data appears to mimic what's going on with OECD and non-OECD energy demand but for oil, we're quite confident now to say oil is in structural decline in the OECD. Non-OECD oil consumption grew by 1.2 million barrels a day and of course there's no surprise China once again the largest contributor to that with half a million barrels a day of growth, 42% of the world's net increase in oil consumption in China. Significant gains also seen in Russia India and Saudi Arabia consumption declined in North Africa and growth was below average in the Middle East and of course that's a reflection of the Arab spring events. Also a reflection of subsidy cuts in Iran which had an impact on oil consumption then. OECD consumption continued its long term decline by 600,000 barrels a day reaching its lowest level since 1995. US and Germany recorded the largest contractions by coincidence the warm winter weather we had in Europe that reduced demand for heating oil by about 120,000 barrels a day roughly the same volume as the additional requirement for oil in Japan to help offset the loss of nuclear power just turned out to be roughly the same amount of oil. A few distinguished consumption by type of product that further illuminates the reasons behind weak consumption growth for oil the weakest portion of overall demand growth is light distribution gasoline primary gasoline is price sensitive when prices go up at the pump, people buy less and this contrasts with middle list of it diesel for example that tends to be much more closely aligned with economic activity so as economies grow more middle list of digital crime particularly you see that in the non OECD so during the recent years of high oil prices it's been middle list that have held up the demand growth in oil rather than light distribution the consumption data confirm some other important developments demand responses to high international prices are still concentrated in OECD countries where subsidies are absent but the emerging economies are becoming more price sensitive because they are reducing the degree of subsidisation about 20% of the world's oil consumption in 2011 and in countries that subsidise final consumer prices of oil products and that's down to 40% in 2008 and pretty much now the only countries that are subsidising are the oil exporters themselves and that group which accounts for less than a quarter of global oil consumption contributed two thirds of the global demand growth so if the oil exporters are subsidising where a lot of the demand growth is coming longer term price effects are becoming very visible fuel efficiency of new vehicles it's improving rapidly in all markets not just the US and Europe it's happening in China and everywhere this is driven in part by government standards things like the capway standards in the US but it is also a consumer response after several years of high prices we are seeing a real shift in consumer preferences towards more efficient vehicles of course the vehicle fleet only turns over relatively slowly this is a long term effect and we'll see this effect for many more years now in the consumption data and when we put it all together overall supply and demand we can start to tell a story of what happened to how we explained prices in 2011 and 2012 as 2011 began oil consumption was actually growing faster in production and that reflected the legacy of OPEC production cuts that have been put in place after the recession that gap widened significantly of course when we lost the Libyan oil even with a large increase in output from Saudi Arabia, other Gulf States overall OPEC output didn't exceed the pre-destruction levels and global production didn't exceed consumption until well is there almost the end of the year before production exceeding demand so that left inventories stocks well below average and supported crude prices throughout the second half of 2011 so far this year in 2012 global production has exceeded global consumption by a large margin now although we have those tensions around the nuclear stand-off and spiking the prices early this year inventories have now returned close to normal levels setting the stage for significant weekly that we've seen in prices in recent weeks so prices have now backed down below $100 about the first time since February 2011 refining global refining business continuously characterised by excess capacity and slow and throughput growth next global capacity grew by 1.4moz a day in 2011 but crude runs throughput only increased by 0.4moz a day for in fact we added 1moz a day that wasn't required in 2011 most of that growth and capacity came from Asia and mainly China there's a split here between non-OECD and OECD non-OECD crude runs are increasing OECD crude runs are generally declining the exception to that in the OECD is the US as a result of the relatively low price of west Texas intermediate the US refiners had a competitive advantage they increased their crude runs and they were exporting product the US became a net exporter of oil products in 2011 the first time certainly in our data series which goes back to 1960 and probably sometimes it's the second world war global unused capacity of refining increases is about 1moz a day in 2011 it's now 5moz a day 10moz a day higher than it was in 2005 there's simply too much refining capacity around however not everyone is suffering flexible sites with world class operations particularly in 2011 had a good chance to show what they could do as the world tried to make up for the loss of Libyan supplies destruction of Libyan crude meant that Europe lost around 800,000 barrels a day of very good quality, light, low sulfur crude oil and many exporters made up some of them the loss but most of the replacement came from the Middle East in particular with much heavier and sulfurous crude so that meant that we needed more refining in terms of good crude products fortunately there's plenty of excess refining capacity on a highly upgraded nature available in Europe so the refining system was able to cope with that switch very large volume switch with relatively little trouble and refining markets that's an indication of it wasn't causing strain on the refining system natural gas, this has been one of the areas where we've seen some of the biggest changes in energy markets in the last few years there's two key themes running through this one is the growth of unconventional gas in the US, shale gas revolution the second theme is the growth of international trade particularly of LMG we saw those two things we played out in 2011 and they both played a part in the market so that's a good response to the disruptions I start with a summary of the changes at the aggregate level gas production globally was up 3.1% like above trend growth was primarily coming from the Middle East North America and the former Soviet Union consumption was up 2.2% little bit below trend led by Asia Pacific North America and the Middle East European consumption in contrast suffered an unprecedented record for climate change of course there's no global price for natural gas, we still have to look at regional prices and those regional prices show the very wide divergence in 2011 annual average spot prices for LMG in Asia increased by 82% $14.00 per mnv to you driven by a combination of higher oil prices, lifting contract prices and the additional demand for LMG in Japan they've since risen for further higher this year for about another 16% 2012 years of date at the other end of the spectrum US prices fell slipped by 8% in 2011 to an average of $4 per mnv to you they've since fallen another 42% averaging about $2.30 this year and at times they've been below $2 an mnv to you extremely low and a record discount to oil and a record discount to other international gas prices European gas prices hover between those two extremes they're between the US nation prices UK spot prices averaging $9 over to you in 2011 up 37% on the previous year milder weather helps keep spot prices below contract prices throughout 2011 and so far this year and that's despite the loss of million supplies and despite the divergence of energy in Canada various to Asia one of the main stories is the growth of international trade of gas facing the growth of consumption and production international trade was up 4% LNG was up 10% in 2011 a nice little symmetry here that 32% of all the gas that's consumed is traded across international borders and 32% of traded gas is LNG put those two numbers together turns out that about 10% of all the gas that's consumed arrived at its destination of an LNG cargo Asian LNG imports were up 34% there was a big shift in the pattern of LNG trade towards Asia European LNG was only up 3% Asia bound deliveries accounted for 90% of the global LNG growth in 2011 almost all of the growth in energy supply came from Qatar in 2011 which completed the final phase of their expansion of megatrends that they've been bringing on and Qatari LNG grew by 35% Qatar overtook Norway to become the world's second largest gas exporter the share of LNG delivering to Asia rose to 63% of the global total Europe's market share fell to 27% so what was driving this switch in the pattern of trade of course Japan's need to import more LNG dominated the headlines in all due to the loss of the nuclear power so Japan the world's largest LNG import increased LNG imports by 12 billion cubic litres 12.5% and they got additional supplies from a combination of some of the new Qatari supply and also a diversion of supplies that were going to Europe from suppliers like Nigeria and Ecuador again those cargoes got diverted to Asia now while Japan caught the headlines quietly in the background China recorded the largest increase in gas consumption in the world growing by 22% 3 billion cubic metres China's gas market has now doubled in the past five years still only the fourth largest in the world China is now debating a programme to double the share of gas and its energy mix from about 4% to 8% under its new five year plan in 2011 the growth in Chinese consumption was supplied by a combination of domestic production growth pipeline imports in Turkmenistan a very important new route ramped up significantly in 2011 and also LNG imports in addition Asia saw a strong LNG demand growth in India driven by domestic production problems and from South Korea which had strong economic growth and cold weather which was a great combination here LNG demand overall LNG demand in Asia was up 15% now with Asia absorbing most of the growth in LNG supplies there were little left for Europe European markets also had to deal with a lot of Libyan gas supply and large production declines within Europe so the North Sea production was down very significantly down 23 billion cubic metres where we have underlying natural decline of mature fields exacerbated by a lot of maintenance in 2011 much of which was unplanned the loss of Libyan and North Sea supplies was mitigated by an increased supply of imports from Russia but also very importantly by falling demand so we had a collapse in demand effectively right across Europe with a solid exception in Turkey due to a combination of weak economic growth exceptionally mild winter compared to the previous year and substitution by cold in power generation consumption fell faster in supply which led to a significant build up in inventories and that was what kept spot prices below contract levels while Asian markets were struggling to find enough supply for their rapidly increasing demand and Europe was coping with production declines North America was facing a very different challenge the continued momentum growth of unconventional gas supply in the US saw gas production increase by a record 47 billion cubic metres and that accounted for nearly half of the growth in world gas production in 2011 and it took gas production in the US to a new all time high above the previous peak of 1973 10 years ago everyone was talking about the US being in terminal decline in gas gas production and they would need lots of LNG imports to replace that it's turned out very differently 30% of US gas is now shale gas demand couldn't keep up with this production growth despite gas prices low enough versus coal to encourage substantial substitution in power generation this excess supply led to a build up in inventories and a reduction in net imports from Canada and in this year 2012 coming out of a relatively warm winter we've seen US gas prices fall even lower pushing the share of gas in power generation in higher, pushing the share of coal in power generation to record lows I just got an email from a colleague this morning from EIA, very good very cool where gas and coal are now equal shares in power generation in the US a really significant shift in the power mix in the US the growth of LNG trade and coal as a conventional gas continues to transform the world of natural gas in 2011 they combined to give gas markets the flexibility to accommodate the additional Japanese energy demand without disruption for other parts of the system to complete the picture we have to look at coal coal was the fastest growing fossil fuel last year both in production and consumption coal's story is one of production and trade patterns which are able to adjust to market conditions and coal has been buttressing global supply security coal production increased by 6.1% globally easily exceeding the 10 year average growth last year as in many years came from China most of the charts we have to truncate the scale we showed at a full scale everything else part of China was being visible China now produces half of the world's coal growth didn't come from India where there was a prolonged monsoon which caused production growth to allow consumption growth by an even wider margin than usual EU production grew by 2.6% that's very unusual first time since 1995 that European coal consumption increased only a small share of coal is traded but this share is growing in size and in reach in 2011 and outside of China coal export is benefiting from import needs in Asia and Europe being the largest contributors to production growth with Indonesia there recording the largest increase in production outside of China the world's biggest exporter Australia caused a decline due to the influx strong global demand was driven by non-OCD particularly with China up 9.7% India up 9.2% and if you put China and India together that's 98% as virtually all of the growth in coal consumption over the last decade OECD share coal consumption has declined from 47% to 29% last year OECD coal consumption declined by 1.1% five times the average and that decline was particularly pronounced in the US down 4.6%, 24 million tonnes of water equivalent where shale gas eroded coal's rolling power so this is the coal side of that gas story also a decline in Japan where coal fired power capacity was offline for a number of months following the earthquake these declines were partially offset by growth in the EU where coal was winning against gas partly because of lower prices but also because of some government interventions and regulatory incentives carbon prices were very weak and of course, weak carbon prices is a benefit for coal in the power generation there were explicit quotas protecting coal in Spain steam coal prices in Asia are made at a premium Chinese import demand driving up prices throughout the region even in Japan where demand is falling European import prices it goes even more rapidly 31% albeit from a lower level and enough to attract additional volumes from across the Atlantic now with Australia and South Africa's coal exports falling there was lots of room for other suppliers to fill the gap the most with exports up to Asia up by 18% Russia second meanwhile Colombia and the US and Russia satisfied Europe's higher net import requirements so a clear pattern in that this higher Asian coal prices redirected exports from Indian ocean suppliers which had previously been heading towards Europe back into Asia also attracting new supplies from Russia and Indonesia European markets compensated by picking up abundant Colombian and US coal supplies and of course that US coal was available at a competitive price because it had been backed out of home by cheap gas so that allows us to complete this puzzle of how markets coped the large scale disruptions that dominated the headlines in 2011 production increases demand changes even the weather played a part in essence however this is a story of fuel substitution and shifts in trade flows triggered by price adjustments before we leave that subject let's have a look at what happened to non fossil fuels nuclear of course was right at the heart of one of the disruptions nuclear production globally was down 4.3% the largest decline on record nuclear output is down to levels of 2001 nuclear share at global energy at 4.9% the lowest share since 1986 so that was a big impact but beyond the closure of Japanese and German nuclear actors the lower term of the impact of Fukushima was actually a relatively limited so outside of those areas 22 countries grew their nuclear production in 2011 and one country joined the ranks of nuclear power producers in 2011 around hydro electricity depends largely on patterns of rainfall the global level it was relatively modest growth 1.6% but there were big regional variations to the US saw its largest ever increase in hydro output and those had significant impacts on those regional power boxes other renewable power so this is solar wind, geothermal etc power generation grew by 18% that's the 9th successive year of double digit growth very rapid growth now it's the largest ever volume increment you turn that electricity growth into energy terms it's 29 million times of oil equivalent that's 10% of the growth of world energy consumption 2011 so renewables are still small in total share but they are showing up now in the growth of energy and it's a larger contribution of energy growth than oil for example the US, China and Germany together accounted for more than half of the renewable power growth in 2011 overall renewable energy if you're adding biofuels accounts for 2.1% of primary energy consumption now renewable energy didn't play a role in responding to the disruptions of 2011 the expansion of renewable power is driven by installation new capacity which in turn is driven by policy in time renewables may be part of a longer term response particularly if the output of the nuclear becomes less certain but in 2011 the path of renewables growth was largely predetermined by the existing policy settings and the capacity that had been added through to the end of 2010 2011 as a year when the economy wasn't driving prices but prices went up anyway and this introduced a new very familiar debate the impact of high energy prices on the economy particularly of high oil prices there is widespread consensus that high oil prices are detrimental to the world economy but there's no agreement on how high the price has to be or what the magnitude of that impact is if you're interested there's a rich academic literature that's delved into this complex topic you're not going to do that this morning I just want to pick out one element of the equation and that's looking at the way that petrodollars can be recycled the oil revenues earned by oil exporters they can spend it, they can save it to the extent they spend it oil importers have the opportunity to get some of it back by exporting other goods and services to the oil producers the ability of oil importing countries to do that varies a lot between countries Europe has been very good at that but the EU in 2011 was able to claw back a lot of the revenue that had gone to oil producers by exporting BMWs, Mercedes, whatever to the oil producers they're much more effective than the US likewise China is more effective than India in pouring back some of the oil import money that ranking hasn't changed very much what has changed is the relative position of the US not because they've got better at exporting to oil producers but because they're importing less oil as a result of their rising production and declining demand their net oil imports green iron over on the right there their net oil imports are declining and that's giving them an advantage in dealing with high oil prices now for most of the presentation I'll focus on 2011 let's stand back and have a look at some long term trends put 2011 into a long term context fuel substitution is an important part of the short term story the long term account part of that is the evolving shares of fuels in the energy mix oil has been in long term structural decline for 40 years now its share of energy 33% now the lowest in our data set and that line really shows you how how specialised a fuel can be can become transport in the case of oil gas share has been increasing whether in modesty in recent years the big increase in shares has been coal rapid increase in the share of coal in the energy and this has profound implications particularly for something we haven't talked about yet carbon emissions carbon emissions were up globally last year by 3% so faster than the growth of energy and that's been the case over the past 10 years that carbon emissions have grown faster than energy the carbon intensity of energy consumption has been increasing carbon emissions fell however in one large energy consumer that's not known for its carbon policies in the United States the reason of course is the substitution of coal by natural gas an example linking back to the development of new technologies and what that can do for you today's energy mix of course is still dominated by fossil fuels with renewable energy accounting for just around 2% of global consumption and the rapid growth rates and the continued financial support you can see it's going to take a long time for renewables to make a big difference at the global scale and I guess that's kind of without technological breakthrough and it brings to mind the question of we've seen technological change rapidly growing in the fossil fuels are there any lessons we can learn from that to apply to renewables second issue in conclusion is the look at the short term capacity of the system to respond in 2011 the availability of production the longer term counterpart of that is the the resources and we've been tracking proved reserves of oil and gas since 1980 and every year since 1980 gas reserves have increased every year except one, oil reserves have increased despite increasing consumption today's proved reserves of oil are sufficient to meet current production for 54 years the natural gas is 64 years more than a hundred years as we've long argued the world does face a lot of challenges in growing the supply to meet the world's growing energy demand but the availability of hydrocarbon resources isn't one of them the way we phrase it is the problems are not below ground they're above ground where does this leave us? let's try and wrap it up with a few takeaway comments it was a year of disruption with seemingly normal growth in line with long term structural trends it really revolves around the flexibility of markets so the ability to increase production to substitute across fuels to change trading patterns all of that has been crucial to the ease of which the system has adapted for this to work of course prices must be allowed to play their role of signals to the reallocation of energy flows one of our messages that changes very slowly is to praise the role of markets in guaranteeing energy security so there's a second related conclusion here it's become fashionable in some quarters to advocate energy independence as the path to energy security I think when you look at the data objective you see that it's precisely the interdependence of world markets with flexible trading that gives it real strength that's where the resilience of the system comes from just imagine for a moment that Japan is being truly self-sufficient energy independence not integrated with world markets in 2011 then many of the adjustments that we've seen would not have been possible thank you very much for your attention