 It's a pleasure to be here at the Institute of International and European Affairs and I think this is a very good setting in fact to talk about energy because energy is becoming more and more intertwined with international affairs and geopolitics. So what I'd like to today is show you briefly the key findings from our latest World Energy Outlook. It's a 600 page analysis, some of you may be familiar with it and I'd like to synthesize the key findings. The World Energy Outlook is the IA's report in which we try to show our perspective for the next 20 years how the energy sector can evolve. We don't assume technological breakthroughs necessarily and we try to focus more on the economics of energy and how matters could evolve. Of course before discussing the future it's also worthwhile to take stock of what's currently happening in the energy markets and actually what we see already. One issue is that some long-held tenants of the energy sector are actually already changing and happening. One key example here is the issue of that countries that we were assuming would be in the future large energy importers are actually going to become exporters and here the United States is a clear example. In 2005 many people were expecting the United States to become a large importer of natural gas and they're soon within a couple of years going to be actually an exporter of natural gas. The other aspect of switching roles is that there are actually consumers that will become exporters that will actually become more and more important consumers of energy. Here a prime example is the Middle East. Many of us assume the Middle East is a region there on the map that has a lot of resources and is destined to supply this energy to us in other countries. Well actually if you look at our numbers the Middle East will become the second largest consumer of natural gas in the future overtaking the European Union and also the Middle East will actually become the third largest consuming region of oil. So it's a region that we were assuming would provide us with energy and they will continue so that they will also continue they will use more of that energy domestically. In the energy sector of course there are many global challenges that we are facing one of them is of course climate change based on our numbers in 2012 CO2 emissions reached a record level of 31.1 gigatons of CO2 emissions so another record high and all of this despite all of the efforts that we're making on energy efficiency and renewables. One of the reasons why the world is not able to tap ideally into energy efficiency that's because today 544 billion US dollars are being spent globally on subsidizing fossil fuels and these subsidies are leading to an inefficient use of this energy and unfortunately generating unnecessary emissions. From a development perspective there's 1.3 billion people today so that's about 20% of the global population that actually don't have access to electricity. The majority of these people are living in India and also in Sub-Saharan Africa and 2.6 billion people lack clean cooking facilities so we are talking here about women each day having to carry on their heads a lot of traditional biomass so as to cook meals and therefore not being able to spend time on education and also this has unnecessary health impacts with more than 1.3 million people each year dying from indoor air pollution more than from malaria. In terms of context of the world energy scene I think it's also worthwhile and you see this in the media all of the time especially if you're in Europe but also in Japan energy prices are becoming a key pressure point for policymakers especially as they keep on rising and in my slides later I will show you our in-depth analysis on the issue of energy and competitiveness that you will find in this world energy outlook. So we're already facing sustained high oil prices if you take the average of the last three years of the oil price in Europe the Brent price you actually notice that that price has averaged 110 dollars per barrel over the last three years the oil price in Europe and if you compare that with history we've actually never seen such a prolonged period of high oil prices so we ourselves are actually living in the period of the longest prolonged high oil prices and there's also growing disparities in terms of regional gas and electricity prices so if we look at the future and in the world energy outlook you have three scenarios in this presentation I will focus on our most likely scenario which we call the new policy scenario in which we take stock of the policies that are currently in place and we take assumptions on which policies are likely to be introduced by governments. We do take a conservative approach to this but we believe this is the most likely view of the future of the world in that governments will implement new policies. One example here of a policy is for example we assume that China will introduce a national CO2 price in their energy system as of 2020. If we look at the future we see that countries such as United States Europe and Japan that make up the majority of energy used in the emerging economies are actually not going to be accounting for the majority of incremental energy demand growth. In some of these countries population is declining we've reached a certain saturation point in terms of energy use and we're also becoming more and more efficient and our economies are not growing as fast as the key energy demand centers and that being China, India and Southeast Asia. We expect emerging Asian countries to actually account for the bulk of energy demand growth going forward and there's an interesting insight here in that when you look at our Asian energy demand trends you will actually notice that China is the leader in the first decade up to 2020 and then actually Chinese energy demand growth starts slowing down from the high historical growth rates and India steps in as the key motor of future energy demand growth and of course other key regions such as the Middle East, Africa and Latin America also contribute to the growth in energy. If we look at the fuels and before we look at the projections what you see here is 25 years of history of energy history so this is not projections this is actual historical data and what you can see here is that clearly fossil fuels where the leader in terms of global energy demand growth. Call number one gas second and oil so therefore if you look at the share of fossil fuels in today's energy mix there are about 82%. 82% of our energy we're getting from coal, oil and gas today and if you go back 25 years you will actually notice that that share hasn't changed it is it was also 82% 25 years so despite all the efforts that are being done towards decarbonization and promoting energy efficiency we're actually if you want over 25 years still in the same point that fossil fuels are key for our energy sector and going forward in our scenario due to the strong penetration of renewables into the energy mix there is actually the share of fossil fuels declines to 75% so there is a decarbonization that happens but even in 2035 20 years down the road three-fourths of our energy will be coming from fossil fuels these fossil fuels as you're all aware have an environmental influence in that they generate co2 emissions and the world is aspiring for a two degrees Celsius target of minimizing the increase in long-term temperature to two degrees it's in all the institutions UNFCC G20 European Union everybody's aspiring for this target but based on our scenario we actually see the world reaching a three point four degrees Celsius increase in global temperature so we're actually not yet there in terms of getting the world on a sustainable energy path there's still quite a bit of new policies bold measures that have to be made to attain that so we're not on a sustainable path therefore negotiations have to become more and more stringent and bold and the key next milestone is actually going to take place in Paris in France in 2015 that's when there's going to be the next COP meeting we just had one COP meeting in Warsaw but the one in 2015 in Paris is supposed to actually decide on the new global climate agreement and then we will have five years to implement it so in theory current negotiations are expiring that by 2020 we will have a new global climate accord why do I mention this because in the negotiations often the the discussion is that we developing countries should not be constrained in any way by the climate accord because we are developing and you the Western world you have developed now if you look at the history you can see here in blue that indeed the OECD countries where the the main emitter of CO2 emissions but if we look at things from a cumulative perspective from 1900 to 2035 so more than 135 years of energy history you will actually notice that this balance will become half and half so therefore in the negotiations actually developing economies are going to find it hard to put forward the argument that we're not the culprit for climate change of course when you look at it on a per capita emissions United States will be more than double than China in terms of per capita emissions but still in the end for the energy system it's not per capita emissions that matter but it's the cumulative energy that's put into the system so one of the solutions of course for climate change is also promoting more renewables and in fact renewables account for nearly half of the increase in electricity generation in our scenario and you have of the developing developed economies such as the European Union Japan and United States fostering this renewables growth you have the the green revolution also taking place in countries such as India Latin America Africa and ASEAN but actually the key player in it is China China alone will actually produce more renewable energy to 2035 than the European Union Japan and United States put together a lot of this incremental renewable energy in China will come from hydro because China has still abundant resources of hydro that it can tap into so does the rest of the world for example India and Brazil but in our developed countries Europe Japan and United States we've actually utilized the majority of our hydro potential so therefore we will have to invest more in wind and also in solar photovoltaics and these technologies are still uneconomic compared to fossil fuels therefore we will have to somehow foster them and most often this will be through renewable subsidies based on our analysis 100 billion US dollars were spent globally on renewable subsidies in 2012 and we expect renewable subsidies to double to 200 billion US dollars by 2035 just to support this growth in in energy and to help us decarbonize if you're familiar with the world energy outlook each world energy outlook focuses on a specific fuel the last time we focused on oil was actually in 2008 but since then there has been a big revolution in terms of technology which is called light tight oil and this this is hydraulic fracturing used to generate oil which is taking place in North America so we wanted to look at oil again this year and we have an in-depth focus on oil in this world energy outlook and what we find is that today's and developed countries will actually decrease their oil use going forward because of more efficient vehicles also turning towards biofuels and electrifications of the vehicle fleet so therefore the majority of the future growth in oil will actually come from the emerging economies and China here is a prime example again because China will overtake the United States by 2030 to become the world's largest consumer of oil and once again you can see the importance of Middle East also in consuming oil not only in producing it if we look at it from a sectoral approach clearly the more and more people develop the more and more they want access to mobility so the transport sector is the key growth sector for oil demand and in fact there's also a lot of growth in diesel because people need more goods so more and more heavy freight vehicles are actually being utilized in for example in countries like Asia and also petrochemicals is the second leading growth sector because of the rampant demand in plastics also as economies develop I won't go into detail for the sake of time but if you're interested by the refining sector we actually have a special focus on the refining sector in this world energy outlook and I know refining is a topical issue in Ireland with the prospects around one your one and soul refinery in Ireland what we actually find if you look at our analysis that indeed there will be a more and more of a glut in terms of refining capacity in terms of unnecessary refining capacity and that means that in the future there might be need in certain regions especially in Europe and North America to shed some of this refining capacity because it will become uneconomical shifting from demand to supply we see in the oil markets a kind of two chapters in terms of the what's going to happen in the future in the oil markets when you when you look at the next 12 years more or less you will see that technologies such as offshore drilling will bring Brazil into prominence in the oil markets and also light-tight oil which is hydraulic fracturing that generates oil in the United States will result in the US overtaking Saudi Arabia in 2015 so in two years time overtaking Saudi Arabia as the largest producer and we expect the United States to maintain this leading position till the late 2030s before it gets overtaken again by Saudi Arabia so this technology is really revolutionizing the oil sector but based on the resources that are today available we expect this to be a short-term phenomenon and therefore afterwards there'll be again another chapter in which the Middle East will once again come to the fore in terms of oil incremental oil production and this is a key message for the IEA because the IEA is often perceived as a watchdog of the energy consumers but we are in dialogue with our key partners in OPEC in Vienna and what we try to show is that Middle East will still be needed for the oil markets and therefore it is very crucial that investments are made in that region I'd like to conclude my presentation by showing you the key findings from our energy and competitiveness analysis in this world energy outlook there's a lot of talk in the media about energy and competitiveness and we decided to look at this topic in depth in this world energy outlook all of the buzz in the media is related to the fact that energy prices have grown in certain regions rampantly whereas in other regions they've stayed subdued we can see that by going back in history if you compare Japanese European and Chinese natural gas prices to the United States in 2003 so a decade we go a decade back we noticed that actually all of these regions were paying similar prices for gas so the issue of competitiveness and wasn't really there when it came to energy we just go forward 10 years today and you can see that in Japan they're already paying five times as much for natural gas than in United States and even Europe is paying three times as much two key factors that have led to this in the United States there's been the shale gas revolution which has created an abundance of natural gas on the market which has then depressed natural gas prices in the in the United States whereas in Europe and Japan a lot of our gas contracts are actually oil indexed and since oil prices have stayed strong over the past three years gas prices have also stayed strong so with the two trends going opposite ways the ratio that price differential has actually grown between these regions going forward we expect these differentials to decrease with mainly due to the larger prevalence of LNG on the market but also natural gas prices in the United States will rise as the natural gas there becomes more expensive to produce and this will weaken the differentials between the regions however they will still persist and you can also expect a similar situation in electricity markets before there was much less difference between these regions in terms of electricity prices but going forward we expect factories in Japan and Europe and even China almost paying double for electricity than in the United States now you might ask a question whether this really matters because there's a lot of buzz in the media but maybe that's overestimated but when we looked at the numbers it's true that on average for most sectors of life energy accounts for about 10% of your total production costs on average in most sectors but if you focalize more on the heavy industries the energy intensive ones such as petrochemicals aluminum and cement our analysis has found that in sectors such as petrochemicals for example 80% 80% up to 80% of of your total production costs can be just related to energy and even if you take this sector of cement you could be even paying 50% of your production costs could be coming from energy so this is clearly an issue these price disparities are clearly an issue for energy intensive industries and these industries needless to say do employ 25% of global industrial employment so competitiveness here means means jobs so we decided to take forward our analysis and we looked at if you take the price assumptions that we have assumed in our world energy outlook and you couple that with a model that derives trade in energy intensive goods how will the future look today in fact the European Union is a leader in terms of exporting energy intensive goods about 36% of the market and the United States is second in place but our results show that because of the development in many of the developing countries such as China and the Middle East these these regions will be able to increase their market share of energy intensive goods and the United States will slightly increase its market share because of the cheap natural gas it will have in the future compared to other regions on the other hand the European Union and Japan which will continue to struggle with high energy prices will actually face a comparative disadvantage in the market and we expect them together to lose nearly 13 percentage points of their market share so the European Union will still remain the largest exporter of energy intensive goods but this market share will decline by 10% of course this can be changed there's no silver bullet to helping competitiveness but there are such tools as energy efficiency which is critical for improving energy competitiveness you can also foster indigenous resources such as renewables unconventional gas and potentially nuclear if you are in a country that is willing to open towards that technology you can also foster more integration in energy markets which the European Union is trying to do with its internal energy market reforms so there are methods and possibilities for us there it's not one solution you're going to probably have to tap into a lot of possibilities to improve energy competitiveness therefore policy makers will be grappling with this issue going forward and will have to find the right means towards improving energy competitiveness so let me just conclude my presentation by recapping the key points we've seen that the dominance in the energy world will shift towards Asia especially to China and afterwards to India this region will become the key driver both of demand and also trade in energy technology is changing already currently the energy world and it will change it further with technologies such as hydraulic fracturing that have revolutionized the energy world but still in the future we will be dependent on conventional oil sources such as come those coming from the Middle East we expect regional price gaps to persist going forward and therefore the issue of competitiveness will be another key challenge that policy makers will have to struggle with they've been always struggling with energy security then they started struggling with climate change and now they have the third trilemma of energy competitiveness but of course we cannot forget about climate change even if we're struggling with energy security and we're struggling with energy competitiveness the headache for the policy makers is how to put how to also foster climate change because at certain times you will you will see that energy security climate change and energy competitiveness not not necessarily go hand-in-hand but we at the international energy agency think that energy efficiency is one of those tools that can solve these this trilemma so thank you very much for attention