 Hey everybody, welcome. We're glad that you're here. I asked Matt Frank. I said, do we have a crowd? He says we've got so many people are even sitting next to each other. Usually that's that is usually the sign that we've got a crowd here. We're glad to have everybody here today. This is a very important opportunity. We were delighted to have Tanakasan back with us. He's a good friend, both personally and professionally. We welcome these opportunities to highlight his work. You know, the World Energy Outlook is one of the most important documents that not just here in Washington, but around the world, we all wait for it to see and give us guidance how to think our way through the future. I mean, this is a we're really struggling here. I mean, we've got we're in the middle of a great debate. We're in the middle of a great recession. We're trying to find our our way forward in both of these dimensions. And and and we do have a very strong impulse to try to do something about the environment, but people don't want to wreck the economy in the process. And how are we going to integrate all of that? And we've got people with an enormous amount of passion and probably not enough knowledge. And that's Washington. Okay, I mean, that's you know, and so what we do is we seek opportunities like this to where we can actually put knowledge on the table. People can still hold their passion of views. But let's just step back a moment and grounded on facts and grounded on perspective, discipline forecasting. And I think that's what we've all come to see and expect and admire from from to knock us on and from the International Energy Agency. So we're delighted to welcome him. David Pumphrey is really going to lead this. I'm here just for ornament ornamental reasons to say thank you for coming glad you're here. Welcome our friends back and we look forward to this very insightful presentation. David, let's why don't we start for real? Thanks, John. I think actually I'm here more for ornamental purposes. John's always the star here. And I've also learned something that whenever we give him a piece of paper to read from, we can never know exactly what he's going to say. So it's truly a great honor to have really the senior most representatives of the International Energy Agency here this afternoon to talk about this very timely publication on this World Energy Outlook 2009. We're just about to engage in the Copenhagen round the long awaited Copenhagen round of negotiations to try to set an international framework. And I think having this document on the table is really critical to start understanding the scale of the task facing us if we want to actually get our emissions levels down to the level that science is saying we need to to avoid catastrophic change. And I think that the scenarios laid out in this report are really helpful in understanding that. But I think also it takes us back and reminds us that energy security is a continuing concern. We will have a transition period that we have to deal with. And I think again, the this outlook will be very helpful in providing us that information. We've passed out some of the biographies so I won't go through the biographies in great detail. Executive Director Tanaka has been with the IEA for two years now and I think has really begun to make his mark on the organization. And he will be I think leading the presentation to start it off. I think he'll be followed if I might understand it right correctly by Dr. Fati Barol who's the chief economist and the director of the office and Fati I think may have the distinction of serving almost the longest of anybody in the IEA. I'm not sure but he's pretty close and I think that's a testament to his skills. And then the newest member of the team is Deputy Director Dick Jones who's been there about one year and is filling this role coming from a long career in the US foreign service. So no further ado, Tanaka-san. Thank you. Thank you, David. Thank you, John, for giving us an opportunity to talk all of you and all good friends and new good friends all by here. And I'm really delighted to come back to CSIS to make this World Energy Outlook 2009. You may have heard many things about this World Energy Outlook. Yes, this time we have released about a month ago to the climate change negotiators in Thailand, the special accept for the climate change chapters of this World Energy Outlook. Because this year we made slightly different configuration that we did country by country data and region by region analysis available for the negotiators because this gives a very good benchmark for say the climate change negotiation. We have the technologies necessary for the region of our country or the what amount of money necessary for the investment. So this gives a very interesting insight for the negotiators. So this document World Energy Outlook has been a kind of Bible for the energy policymaker, but now it's a Bible for climate change negotiators. We are very happy to be in such kind of situation and help the Copenhagen negotiation. And also it is very important that United States has certainly the central role to play. And in this regard, we have very much welcomed the recent announcement that the United States is going to make the key step toward the mitigation of CO2 emission by announcing the targets for 2020. Well, Fatih will explain our view about that. Certainly 17% is very close to our number in very in line with our 450 scenario, which she analyzed that maybe 18% compared to the 17% is necessary, but it's very close. And one after another, the new targets are publicized by different countries, and they are almost in line with what we are saying. China has recently announced the intensity of the CO2 emission over GDP, improving it by 40%, 45%. It is very close to what we are prescribing. So that's another again, Fatih will explain to you. So we are thinking that this 450 scenario or we call it 450-150. He will tell you why this is 450-150, but certainly is a very interesting benchmark for the negotiators. But we are making this, well, energy, not only for the climate change negotiators, because if 450-150 happens, it has a huge impact for the energy market and enhance energy security. So that is the reason why the IEA is so interested and very much enthusiastic about this scenario. We found many interesting new discoveries in 450, which he will tell you about. And in the gas sector, in the nuclear sector, this is the new Bible for everybody. And I wish also this outro is the baby of Fatih Biral. The baby is getting bigger and bigger, more famous and more famous, and more relevant and more relevant. That's what we want to see happen. And I am very much delighted all of you here, and to join us of this interesting document launching in the Washington DC. Thank you very much. So good afternoon, ladies and gentlemen. Also, my thanks go to CSAs for hosting us one more time. If I am not wrong, this is the fourth or fifth time in a row. And we always, in our presentations in our work time, always gave very alarming, very pessimistic messages. But this time we will give some couple of good messages, some good news. So it is very rare. And some of the good news are related to the United States, which is even more rare. So this is what you will see when we go through. Now, as Mr. Tanaka said, I am going to describe two different words to you, energy words. One of them is an energy world without a climate deal. And the other one is an energy world with a climate deal. And a big portion of this work this year was looking at what we need to do in the energy sector in order to limit the carbon dioxide emissions so that the global temperature increases only two degrees. This was, we call it the 450th scenario. But also, I will start with a presentation by showing you our reference scenario, what happens if there is no deal in Copenhagen or beyond, which brings our world to up to six degrees increase in the temperature. So two different words and two different energy sectors. Let me start with the reference scenario, which means no changes in the policies. A couple of remarks. One, the almost all the growth in the global energy demand comes outside of the OECD region. And China alone is responsible more than 40% of the growth in the global energy demand. Highlighting the key factor, China, highlighting the importers of any decision taken or not taken in China for the rest of the world. OECD countries reach a peak in terms of oil demand. In the year 2007, they were consuming about almost 50 million barrels per day of oil. And as of 2010, we expect this to come down about 45.5 million barrels per day. And we expect this trend, the OECD oil demand trend with some zigzags will continue. And we will not see the days of 2006-2007 again. Also, in terms of coal, the OECD use has peaked. And oil demand will come again, a mainly from China, Middle East countries, the producing countries themselves, and India. And again, with the current policies in place, they may reach around 105 million barrels per day in 2030. So while the demand context is well known and well studied, and the numbers coming from different organizations, including the EIA, are more or less similar, we wanted to see whether or not the supply side is ready enough, fit enough to answer this demand. A key worry we have is on the investment side. You may remember that last year, when we were here, one of the final messages we tried to leave you with was 2008 onwards, we would like to see oil investments to increase in order to meet the growth in the demand and address the decline of oil production issue. And we ask for an increase and what we have found out is a significant decrease in 2009. So we expect that the investments on the supply side will go down about 19 percent, mainly as a result of financial crisis, but still a significant decline. Talking with the companies in the last couple of months, it will be difficult to believe that there will be a major rebound in 2010. So our worry here is that if this trend continues, the decline in investments, and if it marries with a strong rebound in the oil demand, with the recovery of the economy, this may well have implications on the oil prices, pushing them up, and higher prices than these levels we have may be rather problematic for the economic recovery, which is and which will be still fragile in the next quarters to come. Another worry we have is under related to the resource basis. We think that the oil fields, many of the mature fields are in a decline, significant decline, and to compensate the decline in these mature fields is a major task in itself. Even if we assume, nobody knows how much the oil demand will increase, even if we assume that the global oil demand between now and 2030 would be flat. So today we have about 85 million dollars per day, even in 2030 oil demand was again 85 million dollars per day. In order to meet the decline or offset the decline in the existing fields, we have to find and develop about 45 million dollars per day of new oil, which means bringing four new Saudi Arabia's in the picture. And this has several challenges, poses several challenges ranging from the investment to geology, from geology to structure of the changing structure of the oil industry and the production policies of key countries. The same issue applies to natural gas, decline of the existing fields. In fact, in this year's outlook, in addition to climate change, we look at the gas markets as close as we can. What we see here is that today, worldwide, we produce about three TCM gas and as a result of decline in many countries, including Russia and Iran, two major gas countries, we think the half of the production today will be lost in the next 22 years. And therefore, we have to increase the production in order to A, to offset the decline and B, to meet the growth in the demand. And here, in the context of gas, according to our estimates, about 60 percent of the production in 2030 will need to come from the fields which do not currently in production. A major task in terms of investments and the investment frameworks. Yes, good news. There is a silent revolution taking place in the United States. It is so silent that not many people hear about that, especially outside of the United States. We thought, but we also observed that also in the United States, not very well known, at least perhaps beyond these circles, that there is a boom of unconventional gas. And this is very important and as I will tell you in a minute, this has implications beyond the United States, as much in the United States. So many of us thought that many energy experts, institutions and so on, thought that United States, a few years ago, thought that United States will need to import a lot of LNG in the future in order to meet the growth in the demand and in order to address the decline in the domestic gas production. But what happened? As a result of boom in the shale gas, there was a big surprise and based on our analysis, with a price level of $5 MBTU in real terms, 10% return rate, we can expect that the U.S. import a very little amount of LNG. So a big change in the picture. This is very different than many people thought. Of course, this has implications for the U.S. markets, not only for the energy sector, but also on the climate, which I will come in a minute. But this has implications throughout the world. And we feel that implications already. What are those implications? First of all, there are many companies and countries who thought that they would sell a lot of LNG to United States and made a lot of projects, developed a lot of LNG projects. And some of the projects are still continuing, but there is no market in the United States to buy that there's no need to buy that LNG. So most of those countries or companies do have or will have a lot of gas in their hands looking for buyers. This is one thing. Second, in 2009 global gas demand, we expect that it will decline about minus 4%. A significant decline in the global gas demand. In Europe, it is even worse. We expect Europe gas demand to decline minus 8%, minus 9%, which will bring the European gas demand to the level of 1999 or 2000, so 10 years back. So as a result of this decline in demand and a lot of LNG projects, which were taught mainly to send it to the United States, we see a gas glut coming. And we expected the gas glut about 2015, about 200 BCM, which is compared to the last normal year we have 2007, which is about three times higher than the averages. And this gas glut have a lot of implications under gas prices. So we started from the U.S. shale gas boom and all the implications one by one. What are those implications? First of all, we feel, and everybody feels of course in the markets, you know, that there is a downward pressure on the gas as a commodity, the LNG price, and it may even get maybe getting stronger in the next years to come. Second, a gas crisis, which are linked to long-term contacts in Europe, in Asia Pacific, are going up as a result of higher oil prices. And there is a growing divergence between the gas prices sold in the market and the gas prices linked to oil prices in the long-term contacts. In Europe, just for your background, in Europe about 75% of the trade, gas trade is made on long-term contracts and rest on the markets and in Asia Pacific about 55% on the long-term contracts. So how important it is? So we know that after our book came out that many countries, important countries, companies knock on the door on the of the exporters and want to discuss the terms of the contract, whether or not they shouldn't they reflect the market rate is a bit better than how they are now today. So this is what we hear, what we read, and this is what is happening. Another implication of what happened in the United States is a spillover effect. And I will stop the gas story here by saying that as in other cases throughout the history the what happened in the United States gave an inspiration to the many other countries in terms of looking for unconventional gas resources. And there is a growing interest in a few countries in the world, in China, in Australia, in Baltic Sea, even in Europe, in many countries, and lots of activities in terms of assessing the resource base, looking at the how much gas can be recovered, and there's a growing economic activity in that respect. Let me come to another point which Mr. Tanaka already highlighted, the energy security and the oil prices. We think the oil prices in the future will be on the high sides. In fact, you may remember that when we finished our presentation last year, one of the, it was in November again, it was in November at that time, and we said that the era of high oil prices are over. So it was end of November and we went everywhere throughout the world. The more we said so, the lower the prices went down, they went down to $30 and so on in the next weeks to come, but this was because of the financial crisis. We knew that the price will come up again, and today it is about $80 and we think this price levels will come. Why I am saying this? Because we think the reference scenario with the current policies, oil prices, oil bills may be a problem for the economies of many countries, OECD and non-OECD. This is a very simple chart that we show you here. It shows that in the past, for example, the United States, on average each year paid about $150 billion, on average each year, oil and gas import, and this was again on average 1% of the GDP. But looking at the future, we expect these shares on a yearly basis to increase substantially, mainly as a result of higher prices. And we think the higher prices we have seen in 2008 did play an important role, not the main role, but an important role in the run-up to the financial crisis by weakening the trade balance, by worsening the disposable household income, by weakening the economic growth, and others. And in that year, when we hit this very bad year of 2008, the ratio of in the OECD countries, oil and gas import, based on GDP, was 2.3%. And we will have, for 20 years, with the current policies in place, we will have a 2% ratio for many years to come, which we think is an important aspect to take into consideration whether or not we should stick to current policies or change them. Another point before going to climate change, I wanted to bring to your attention, is a key issue that you may remember, that we follow in the World Energy Outlook very closely in many years, in the last few editions, namely access to electricity in poor countries of the world. According to our analysis, today 1.5 billion people in the world they have no access to electricity, mainly in Sub-Saharan Africa and in South Asia, in India, Pakistan and in Bangladesh. This is definitely very bad news, and this has many implications from small in court, implications to big implications, small implications, very simple, the daily implication. A mother cannot keep the medication for her child in the refrigerator. You don't have access to any communication systems, you don't have light, and you are completely out of the civilization. This is a bad news, but the worst news is, despite the economic growth we expect in Sub-Saharan Africa or in South Asia, in 2030, there will be still 1.3 billion people who will have no access to electricity. So therefore we think this is an important aspect of the energy discussions we have, or if not it should be an important aspect of the energy discussions we have, and we do not think that the markets alone can solve this problem, because bulk of the electricity access problem is in the rural areas, and what can be helpful here is some international concerted efforts to address this issue, and I know that Ambassador Jones has some good ideas how to make a move in that direction. So let me come to the climate change part. Now these trends I show you in the reference scenario brings us, as I mentioned, to increase of the global temperature up to six degrees Celsius, and energy is at the heart of the story. Energy is responsible about two-thirds of the emissions. So we thought we should have a design or suggested energy system or energy revolution that would limit the increase of the temperature to two degrees, and we know that many countries are now ready to be a part of a deal in Copenhagen, but the only problem left is that we do not know who is going to be responsible for how much. This is the only small problem left. So we thought we can make a modest contribution to the solution of this problem, and we analyzed the current position of all the countries and tried to come up with a pragmatic framework how the energy sector can help to find a solution here. Now first of all we have divided the countries into three different groups. OECD countries, first of all then other major economies, Brazil, China, Middle East, and the others, and the third one is the other poor countries, African countries mainly, and India. Three countries according to historical responsibilities and economic affordability, and our approach is first of all one thing very important all OECD countries should have a target for 2020. Second other major economies should have nation policies and measures up to 2020 and should have a target after 2020, and the other countries, poor countries, should continue to have strong policies and measures national such as renewables such as efficiency and the others. One important thing here is that the global emissions we think need to peak around 2020. So you must have, you might have read in the newspapers that the the draft agreement to be presented in Copenhagen by the United Nations exactly suggests the same thing, the global emissions need to peak around 2020. But how will it happen? How this emissions will change? It will not change by us giving nice presentations, nice books, and so on. It will only change if there is a financial signal. And we think our numbers suggest us that we need a CO2 price in the OECD countries by 50 dollars per ton of CO2. This can only give a signal to make the right investments in the energy sector. And in addition to that some of the investments, sustainable energy investments in the non-OECD countries needed to be supported by the OECD markets through CDM and other mechanisms. So for the OECD countries two major tasks, first at home domestic and plus through clean development mechanism helping developing countries to reduce. And the developing countries have mainly at home work. Now our approach suggests that we have the reference scenario in 2020 emissions about 34.5 gigaton and in 450 they need to come 30.5 gigaton roughly. And we first think that all the countries should make domestic policies and measures. Then there are some sector agreements some of you may heard in the sectors where there are a few number of players such as aircraft manufacturers, such as the island signal makers, such as the car manufacturers to bring the efficiency of their use to a certain level and then cap and trade will play a key role. And all of them together would bring us to a reduction which is needed in 2020 about 3.8 gigaton, 3.8 gigaton. And such a system of course will change the world energy picture substantially. So substantially that it is when my colleagues when we have the numbers I was not shocked but when they put it in a in a chart I was shocked to see that the fossil fuels need to peak as a group they reuse in 2020. So this is a big story. So it means oil gas and coal as a group they reuse need to peak around 2020. Of course that all of them has the same pattern. Coal will have to peak conversion coal use have to be much earlier. Gas use still increases but less than the reference scenario and oil increases very very slightly. Today we have about we use about 85 million per day of oil. You remember that in the reference scenario I said it will go to 105 million per day oil and in a for 50 context it will be only 89 million dollars per day on the 4 million dollars per day of an increase in terms of oil. And what happens is that the winners are the so-called zero carbon technologies namely renewables, nuclear and later carbon capture and storage. They share today about 18 percent in the global energy mix and it will increase substantially almost double in the year 2030 in that context. Of course if the oil demand is significantly less it is a good news at least for the consumers. Why it is a good news because when what happens because there will be less pressure on the markets and as a result of that we are oil press trajectories in a 450 scenario is significantly less than reference scenario. And it is the reason why Mr. Tanaka called this scenario not only 450 but 450 plus 150 scenario because we have been avoiding to have higher oil prices. Again I will come at the end in many countries the reason why climate change policies are pushed including China is not necessarily because of the climate change reasons but they are mainly as a result of energy security reasons. But at the end of the day they also help to reduce the carbon dioxide emissions. OPEC what happens to OPEC the following happens to OPEC OPEC production still increases in a 450 context but a bit less than the reference scenario because of the manufacturers including the lower oil demand and but of course for OPEC what is more important is the revenues. Some of the colleagues may who may be involved in the negotiations know that the OPEC countries are a bit reluctant in terms of having a agreement in Copenhagen mainly with the argument that they are going to lose a lot of money and this money that they are going to lose need to be compensated by the OECD countries they come up with such agreement and we wanted to check how much money OPEC is going to lose and how does this argument hold. This is the in the reference scenario with the current policies in place no climate deal this is the cumulative OPEC revenues about 28 trillion US dollars in between 2008 and 2030 with the current policies in place. If there is a climate deal this will go down this will go down and it will be only 24 trillion US dollars still a handsome amount of money I would say about one trillion per year and of course OPEC is still losing money here that's true but still making good money and we said this is a good amount of money but good is a very abstract concept we said we wanted to compare this with the same time period in the past what they have been making so that to understand what does it mean and when we look at the past 22 years we see that the OPEC revenues even in the 450 context is really increasing and we therefore hope to see that the OPEC governments do also play their constructive role in being a part of the solution in this very important international policy question. Natural gas in terms of natural gas natural gas demand still increases in a 450 scenario context but significantly less than the reference scenario because in many countries the share of natural gas is going to be eaten by nuclear by renewables and a lot of efficiency improvements in the reference scenario would mean especially electricity side would mean building less electricity power plants which means building less gas-fired power plants. So but this picture changes on a country by country basis for US and China we see a gas demand to be stronger in the 450 context. When we look at the COT emission reductions we see three major areas in addition to efficiency. Efficiency is the most important policy about two-thirds of the improvement in the reducing COT emissions come from efficiency and followed by renewables, nuclear and after that after 2020 perhaps in increasing terms from carbon capture and storage. And this with all these changes having changes in the efficiency renewables, nuclear, carbon capture and storage worldwide would mean we need about 10.5 trillion US dollar additional investments to come those levels. In terms of countries there are six countries which are very important in this game. As Mr Tanaka said this year we made the analysis on a country by country basis and these are a China, US, Europe, India, Russia and Japan. Now US reduction proposal of 18 percent, 17 percent is very close what we suggested coming from analysis is about 18 percent but ours is a domestic one mainly. Russia for example said 25 percent we come up with 27 percent but the most important country I wanted to mention here is China. China is very important story. What we have done for China is today a Chinese government have a lot of policies in mind at targets for 2020 in terms of the renewables. For example I would have in 2020 share of wind from this bring to that in terms of nuclear power I will increase the nuclear power capacity from this to that the hydropower in 2020 I will have 300 gigawatts I will have efficiency improvements in the buildings from this to that so many many targets and these targets are not necessarily driven by climate change concerns and they were already there before the climate change debate was already very very hard so it was they were there almost a year ago and we have calculated if China reaches those targets that they put themselves mainly as a result of energy security reasons what happens what we have found out that China if they reached those targets will reduce emissions by one gigaton around one gigaton and this is a very big amount of reduction when you look at the global reduction needed about as I told you 3.8 gigaton in 2020 and one gigaton would come only from China if they reached their targets of course there's a if here if they reached their targets and recently announced Chinese target for CO2 intensity was between 40 to 45 percent and if we assume it is 45 percent we want to assume that Israel it is very close to our 47 percent target improvement what we suggest here one gigaton would be around 47 percent very close to what we suggest but of course we are not sure if China is going to reach that target but looking at the past examples China sitting a target and reaching their record track is very very good if that excellent I show you the picture of India sub-Saharan Africa having no access to electricity China in 11 years brought electricity to about 500 million people half a billion people in 10 11 years and they didn't talk about the cost and benefit analysis markets and they just decided and went from target and report electricity they hit is other areas the population growth control they had suggestions they had a target they reached GTP GTP growth targets they always reached their targets so again one shouldn't be surprised if China reaches those targets and will be a major champion in fighting against climate change if they reached those targets United States I want to speed up in terms of United States we think the again efficiency renewable biofuels especially second generation nuclear and ccs can play an important role in reducing the US CO2 emissions two sectors in the United States I will mention these and then pass the floor to Ambassador Jones for concluding remarks in the electricity generation the couple of things are happening the gas will play a much important role in the US today my colleagues from EIA would know better than me but I think we have about 330 gigawatts of coal fired power plants and significant amount of those power plants coal fired power plants will be retiring sometime in the next years to come 10 years plus and there is an important chance that those power plants to be replaced by gas an important opportunity there renewals will play important role we believe out of the investments here if we assume that in the 450 in US electricity generation we will invest about 100 US dollar between 2008 and 2030 about 52 dollar needs to go for renewable energies lots of renewable energy we need and they are capital intensive finally we think if we want to come to 450 if we want to change the oil demand trends there should be a major change in the car sales or the transportation sector according to our numbers today one out of 100 cars sold in the United States is a either hybrid plug-in hybrid or electric vehicles if we want to come to a 450 context according to our analysis in 2030 out of 100 cars sold 60 need to be from advanced technologies and this is a tall order not the fleet but of the sales need to come from there and I can tell you again in China for example some of you may well know better than me there is a huge program in Europe French government is putting subsidies there German government again in Japan there's a strong push in that direction so what would happen one again an additional aspect of this in addition to bring the CO2 emissions down the current US oil demand which is 18.5 will go around 13.5 million dollars per day substantial decline so this will again in addition to reducing CO2 emissions an additional benefit a co-benefit as they say in the climate change jargon in order to bring the oil demand down and being less relying on oil imports from outside now perhaps I can now ask ambassador Jones for the concluding remarks well ladies and gentlemen there you have it that's our story and we're going to stick to it you've probably heard it for a few a few years now but we think we need to continue it basically what Fatih is telling you is that we need a revolution we need to change our energy system the entire system because the current system is just not sustainable even if you believe that we can find six Saudi Arabia's four to replace and two to expand demand if you look at the analysis you the production is going to come for ever fewer countries and many of them will be OPEC countries so from our perspective this increases the probability of a disruption in the supply so it's not sustainable from a security standpoint we don't think the system is sustainable from an economic standpoint Fatih talked about the role that price volatility may have played in the in the financial crisis we think price volatility will continue because it's going to be very hard to have much spare capacity in this system it's going to be really stressed in the in the reference scenario and finally and we put a lot of emphasis on this we don't think it's sustainable from an environmental standpoint whether or not you believe in global warming I think everyone will agree that there's a lot of environmental degradation going on now deforestation pollution and so on and those aspects will always be with us as long as we're such tremendous consumers of oil and gas so whatever way you slice it we think we need a new a new path now again we've we've prepared a a possible alternate path it's not not the only path but we think it's a good path because it's designed to be least cost we think it's based on reasonable policy assumptions but of course the actual policies will only be determined by individual governments and probably through negotiation in that regard we think that the Copenhagen meetings which will be starting next week or is it this weekend I forget but anyway very very soon are extremely important they're an opportunity for the world to choose a different path and we all hope that they succeed of course I think some of the announcements made this week helping increase that likelihood but not all of the announcements made this week as there have been some that were disappointing but the issue is we need to start acting now and so whether or not Copenhagen succeeds people need to start thinking how we can change the system and for that reason the IEA has designed our program of work to compliment the results of the possible results from Copenhagen but we believe our work will stand on its own whether or not there is a good result from Copenhagen so there will be complimentary if there is one but if there isn't one we think it will still be something that we should do and we will continue to do it work like the world energy outlook work like our our policy analysis our market analysis we do regular analyses of the oil and gas markets regular reports our work on energy efficiency we've prepared in the past 25 recommendations for the G8 countries we've expanded them to our own membership and are popularizing them around the world as best we can we're supporting the new international partnership for energy efficiency cooperation which is the G8 plus G5 initiative so we're doing a lot already but I want to call your attention today to three specific initiatives that have come out of our recent ministerial meeting which was held in the middle of October of this year the first is a training and capacity building project the IEA has done training for a long time we train people in statistics we train people in policy analysis modeling and so on but it's always been a kind of a hit or miss affair somebody talks to somebody and says I have some people that need training and we set up a little training course or maybe somebody says I've got a promising statistician can I send him to the IEA to work with you for six months to learn something and we've always accepted those offers whenever resources allowed but finally at this ministerial we actually got approval from our ministers to formalize this program and we're going to be in fact we've already started it we had our first training course a few weeks ago in Paris we had 21 Indonesian statisticians coming to learn how to use templates for collecting data so that their data can be compatible with IEA data and they were joined by one Ghanaian which was an interesting departure for us but it shows that the demand is out there people do want the kind of training that the IEA has to offer and believe me it's important because you cannot make good policy unless you know what your situation is so data is quite mundane but one of the reasons we're able to stand up here today and present these kinds of results is because the IEA is the data storehouse for the world on energy well but we can always improve our data and one way to do it is to get better data from non-member countries and that's exactly what we're going to be trying to do with this training and capacity building program in the end we want people around the world to be able to do this kind of analysis for themselves because we think that the only way that people will really believe you and really make changes in their policies is if they're doing the analysis themselves and we want to help them learn how to do that as part of this effort we another initiative that was launched by our ministers is a partnership initiative where the IEA is going to be working more and more with non-member countries around the world this last ministerial meeting by the way we invited for the first time China, India and Russia all those countries had come in the past individually but none of it they had never come as a group I'm not saying they were a group but they came all at the same time and that was a real departure for us having ministers from those countries involved but we want to expand on that work and we have a green light from our ministers to have a bigger meeting this coming year we may have up to 14 or 15 non-member countries getting all together as a group to discuss our problems and hopefully discuss how we can implement Copenhagen because remember that 60 percent of the emissions problem in the world comes from the energy sector so we're part of the problem we have to be part of the solution the final area that it's a new initiative that was approved by the ministers is a technology platform what Fatih has described really is a technology revolution as much as anything else and we want to do what we can to help accelerate the spread of technologies around the world we have approval for this what we call a platform it will really be a series of meetings but the idea is to help countries around the world understand how to analyze not only what technologies they need but what it takes to deploy those technologies whether it be how to overcome the barriers to deployment in their country whether it be a financial barrier or a policy barrier a regulatory barrier and so on and we think that we can work with countries around the world to help them design strategic energy technology plans that draw on the technology roadmaps that the IEA has been preparing for several years now so that they can understand what they need and how to get it so that they can accelerate the transformation this is all not none of this is going to be easy we don't even think the reference scenario is easy it requires over 25 trillion dollars of investment but it leads to what are a lot of unpalatable conclusions so we've developed this 450 alternative as I say it's only one of many possible alternatives but we think it's an important one and it's not going to be easy but the alternative to this scenario is worse because if these scenarios break down they break down because we're assuming economic growth at 3.1 percent per year but if we don't get economic growth we're going to have problems big problems maybe worse problems than as hard as this is because for the very simple reason that we know already the people that will need jobs in 2030 because they're already here on the planet they're already born and we know it's a large number of people we know that we have to continue because of past population growth we have to continue economic growth to provide jobs for these people if we don't provide the energy for them there won't be the growth if there's not the growth there's going to be a lot of turmoil on this planet so for our own security we need to pursue this I've been I spent most of my life working on national security and I don't think I changed professions by moving to this job and one of the one of the big things that that you mentioned that we're also going to be looking at is this whole idea of your universal access to electricity $35 billion is not a lot of money when you're considering it it's going to impact on over a billion people and also if you consider that there are five or six billion people that have access to electricity if those people purchasing electricity just paid a few dollars more per year we could provide a lot of electricity for the poor countries in the world and after all those countries don't the the poor people they need energy but they're not going to use a lot of it a lot of them will just use it for light bulbs so their kids can read at night things like that maybe so they can watch a television or something we think getting universal access to electricity will help the world a lot and we're going to start fighting for that as well so thank you very much for coming and I guess for now we have an opportunity for some questions thanks David well thank you for an excellent presentation I'm sure you've provoked a number of questions I'll stand up here because I found that when I sit down there I can't see that side of the room and maybe that's a good thing but I would like to at least give everybody the opportunity before we get started though Dick you touched on the question I was going to raise and normally in your presentation you'll have a chart that talks about the investment figures for and I noticed it wasn't in at this time so you mentioned I think 26 trillion for the reference case but what is the 450 scenario what's the increment then any of you obviously it's it costs about 10 and a half trillion dollars more so it's about 37 trillion but you get a saving of nearly 9 trillion in fuel costs you also get a big savings in terms of human welfare okay so the ground rules and questions here are normally if you can state your name and affiliation and put it in the form of a question even if it comes at the end of a long comment we would appreciate that so if I can start back in the back there thank you Tom Doggett with Reuters my question is given that the global economy is still recovering do you think that OPEC should increase oil output at this time when it meets December 22nd and if it doesn't increase output do you think global oil inventories are adequate enough to meet global demand through the winter yes I think well we don't have any position to ask OPEC to produce more they have to decide themselves but as our well oil market report which is coming by the way to the end of this week a new one so I don't have the number exactly for that but it depends on how robust our economic recovery growth rate is if the economic recovery is very strong then we need more oil on the other hand if it's not the case we don't I mean at the current I would say we have revised slightly upward last month for the oil demand and supply situation and colon OPEC that's the number which means that necessary production from the OPEC and adjustment of the inventory is almost stable so that means and also we expect very high spare capacity of the OPEC countries in the next year that means at this moment we think the market is very well supplied and stock level is a very comfortable one to your oh first to your left and then don't argue thank you so we were India global issue today my question is that the global eyes are on India and China and Copenhagen and President Obama might be there including the maybe Indian Prime Minister now Indian Prime Minister was here last week and they had some agreement on energy and India is facing a big energy as you said also here population is growing energy is going down so what suggestion you think you have for India and to solve the energy problem and how the US and India can work on this and what do you think the Prime Minister's visit here achieved anything and actually before you get into that I was in the context of India it was interested in the grouping of three countries that India which is normally linked with China and almost all debates you had put into the lower group of countries and was wondering if you could also sort of elaborate on that as the ration yeah well that exactly David thank you for for clarification exactly that is a reason why we put the India in the third category because in our calculation the India's per capita GDP will not reach 13,000 per 13,000 dollar per capita even in 20 even in 2030 so we think India cannot be categorized as other emerging economies like China and these countries are supposed to get into the cap and trade in in 2020 on so India say of course India should do for their for its own sake the energy efficiency measures in the national actions because that's good for India but certainly the trajectory of CO2 emission will not peak even towards 2030 so for us that we have close cooperation with India and our strong recommendation for the energy security or this climate change is yes to solidify the power grid and investment into the power sector and certainly energy efficiency has a lots of the benefits for for India and I think India we are working very closely with Indian power ministry and they have created and working closely with us for that direction may I just it's something here the in fact these two the questions of David gentlemen the question are very much complementary since about 40% of India has no access to electricity and India is really on a poor situation it is the reason why we didn't put India and China in the same category didn't want to give the same responsibility which is expressed as Mr. Tanaka said in terms of the GDP per capita levels but having said that for India as well there is a need pressing need to put its energy system on a sustainable front and try to give a hand to the rather positive mood in the going to the climate change in negotiation in Copenhagen we saw that China announced up to 45% CO2 intensity improvement which is close to what we have but what we read today in the newspapers about what India may come up and we hope they are not the final ones are not in line with what we thought India could do to put it on the and the records thank you Mitzi and then I'm Mitzi Hassan I'm Mitzi Wertheim and I run something called the energy conversation which we started here in town back in March of 06 to start educating people across government and anybody who wanted to come learn I want to look at this from the other end which is the consumer and my question is how do you get the rest of the folks to recognize it's their responsibility to cut back there's such a desire for growth on one end and what you're saying we need to keep growing but oh by the way you need to use less how do you tell that story in a convincing way that people think yes that's my responsibility and I think telling story I think how you frame the story and how you tell it is a very difficult challenge and takes lots of talented people so what's your what's your part in this a lot of people are part we need to be educated also as you say but best way for the consumers to learn is the message from the market in terms of the price level and we are saying clearly that cheap energy age is over and if the reference and if the no business that if the business as usual scenario continues the price is getting $190 per barrel of oil and certainly this is not sustainable and we think that even with the for 50 scenario the oil price could be around $150 per barrel but on top of that the carbon price CO2 price is $110 per ton of CO2 means about $40-50 per barrel that seems I mean on top of 150 means the price level for consumer are same the difference is the producer price the producer price is much lower in the for 50 scenario compared to the reference scenario so the high price the who takes the rent is a difference so for the consumer countries yes message from the by these prices push us to conserve energy and be more efficient and even possibly changing the lifestyle and in our well the energy I took but also in our mid-term oil market report we think the last year's $147 per barrel of oil is changing the structure of demand here in this country certainly I mean it is shocking but two major auto company collapsed last year certainly it's a great evidence that destruction of demand is happening and that is I think that I would say clear evidence that consumer is learning and enough time well it's already happening and I think now the let's say high hybrid car is so popular smaller car is popular we are start using the public transportation I think the price signal is so strong and we are for example for India we are prescribing phase out the subsidy the price control that is a necessary but politically not so attractive option to say for the consumers in addition to that though we are trying to get the message out that there are alternatives I mean that's what the 450 scenario is about in a way but we are really preaching energy efficiency because in energy efficiency you can find there are many ways to to skin a cat and you can have in many cases you can have the same lifestyle you can keep your buildings warm and use less energy and what we're trying to do is educate people and show them the way to do that we do it through forums like this where we talk to people for the first time this fall we're going to have a public service announcement on CNN we're going to be promoting energy efficiency and directing people to our website and so we're working more in public outreach as well as the policy advice we give our governments let me also say something wise about this it's a very philosophical question you raised let me put it this way it doesn't if a person builds a coal-fired power plant dirty coal-fired power plant it doesn't mean that he's a bad person and it doesn't mean that if somebody builds a solar power plant he's a good person they are both driven by the profit so if there is a signal and human beings unfortunately motivated by profit and money the financial things that are the other things at least most of them I should say if we want to change the habits the ways how we use energy how we produce energy there is a need for a carbon price otherwise it wouldn't work it wouldn't work through our beautiful presentations beautiful books and all of these things there is a need for a signal which I think should be a price signal so this is important thank you spoken like a true chief economist we'll take one here and then one over on this side thanks Dave Mark Finley with BP I'd like to start by thanking you all and your teams for producing such a great product every year I noticed that the reductions in the 450 case by region didn't necessarily map against where the emissions or the economic activity is perfectly and given that there's not a perfect match how do you all decide where the most cost effective reductions to be had if I may sneak one more question in given the focus on data I'd love to hear your views on what's worked and where there might be room for improvement in the data gathering initiatives you already have in place for example the joint oil data initiative thank you so perhaps I take the first question and the joining question I may if you wish I can pass it to Mr. Taneko Ambassador Jones now in terms of the the potential it is very simple we have first looked at the announced domestic policies and measures in OECD and non-OECD countries this is regardless of the cost there are only the policies established in China in India in in in the in the European Union I don't know in Japan and many countries these are done and we took them out of the required reductions so what whatever the amount is and then we hit the sectoral agreements which are taking place in different sectors and they are going to reduce some emissions we took them out and when it comes to rest in the OECD and non-OECD countries we look at the so-called marginal cost curves in the both in households in transportation and in industrial sector and so where it makes the most who where the emission industrial should take place however I want to tell something which I think is important to note here and I am not a negotiator but I think negotiators make one mistake namely bulk of the discussion now takes place it is related to Max question bulk of the discussion that takes place which country is reduced how much how many tons of CO2 emissions I think this is wrong as it stays alone if it is just like that I think more important question is again linking to Max question of the CO2 emissions how much of the investment needs to be paid by whom namely in a country X it may be developing country there may be significant amount of reductions of emissions but if it is finance or co-finance by an OECD country for whom it is cheaper to mitigate in that country than at home there is no problem why shouldn't the reduction shouldn't take place in a developing country where it is cheaper if it is co-finance or financed by an OECD country for whom it is also cheaper to do it it is a win-win situation therefore this is the message that we are trying to give the negotiate and we are at least partially is successful the issue is who pays for the emission reduction of the total amount how much rather than not only focusing on the the CO2 emission reductions itself for the Jody shall I say something Mr. Tanaka or thank you very much so Mr. Tanaka always gives me the so Jody is it of course initiative which started with very good intentions and many international organizations provided help there and compared to the the day we started this work there is a very significant improvement having said that we also see some resistance in some countries to provide better data better quality data and timely data and we cannot say that we reached the target that we wanted to be as of today Kim why don't we gather up a couple of questions and then they'll allow you guys to think about them and sort of answer them appropriately so we've one here Carmen and then so if we can do those three Mikhail Kurchemkin East European gas analysis I like the section about natural gas it's really exciting and I have a question can traditional producers of natural gas of conventional natural gas survive through the period of gas blood they are building lng plants building new pipelines that will be loaded maybe at 40 50 percent so instead of generating profits these investments would result in loss so it's really tough the my point is that producers of unconventional gas have different future from that of traditional producers thank you good Carmen to him yes I was wondering about the price trajectory of on carbon to failure of the gas carbon energy of the oil price outlook and the comparison with the midterm outlook are they consistent with each other it seems that the message we hear today is a little bit different than June 30th with Mr. Kanaka and David Fife we're here I was wondering if they're changing thinking or changing the data okay and then one more question and then that'll give you plenty to work on thank you Clint Leverett you American Foundation good to see all of you I had a question picking up on Dr. Burr-Roll's discussion of the impact of the unconventional gas revolution in the United States we anticipate this gas flood looking out to say 2015 but then if you look longer term particularly the slide about need for bringing new gas fields online it looks like there really is a daunting supply challenge over the longer term if you play those to the both the short term scenario and the longer term scenario if you try and integrate those and and look out through them over time what does that do to the structure of the gas market does it become even more regionalized than it is today or are there some dynamics there which could encourage some evolution toward a more more integrated international market general okay in fact if the first question and the third question similar but perhaps I should say something which I should have said before there are colleagues here in the in the audience who gave us a hand to bring this put this book together such as a guy Caruso Carmen Deficlio Mr. Levet who just asked the question Herman France over there and some others that are left now a the to be honest with you the I nowadays I wouldn't like to be a traditional gas supply it is a bit of a scissor-filling situation that coming to the third question because on one hand to be to be to be ready for the ready for the exporting gas or making more use of gas after 2015 you have to invest for those fields and today nobody needs gas so there is a bit of a scissor-filling situation here and this is a major problem and if I was a major gas exporter I would I would need to be strongly convinced that it is definitely after 2015 they will need my gas because there is one uncertainty we say 2015 but there are two aspects it may be even beyond 2015 to be honest with you one if the economic growth is slower than we expect therefore the gas demand will be gas demand will be lower this is one then 2015 can be postponed and second we say 2015 but this is in the reference scenario if there is a climate deal in some cases in some countries renewables may make a stronger boom than we expect and this may also eat up the the gas shares it may be even earlier but at the same time there is an uncertainty that if the economic growth is very strong then the gas demand may go up and the gas that may be eaten earlier so it is a the name of the game is big uncertainty for the major gas exporters and I can understand that many gas exporters are now today frustrated frustrated deeply with the with the current situation and even when they look at the next one or two years it is even worse for them so and the question is of course as you mentioned the the story is completely different for the unconventional gas supplies especially in the United States they have their own challenges but different than the challenge that we have stated for the traditional gas suppliers now what happens after 2015 my my my it is very difficult to guess but my guess is there needs to be weakening between the oil and gas prices in the long-term contracts this is where we have to go otherwise the it will not be fair to anybody to be honest with you and there will be more diverges between the gas world and the realities of the life so to be honest to be to be to be fair but we still in many cases link long-term contracts but perhaps long-term contracts can be formulated in different contexts than we have been doing up to now and and I think the what will happen is the hands of the in general terms hands of the buyers will be stronger in the next years to come with the hands of the exporters now Karman's question our price assumptions here are significantly different than the the Mr. Tanaka's presented mid-term outlook they are significantly higher than that those that work has been done during the financial crisis where we and others thought that that the the economic crisis would be much deeper and continue much longer therefore the demand will be much more weaker therefore we had lower prices there but in the work that we presented today as Karman noticed we had significantly higher price levels so I think we have time for one last round of questions so I have okay one in the back why don't you go ahead and others over here and then one in the back thank you my name is Raqatis from the World Watch Institute I have a question regarding the technology mix in the 450 scenario because you're putting a lot of emphasis on nuclear energy and carbon capture and storage and then if we look at just the development last year for example where wind was the single most installed capacity in both the U.S. and Europe and also renewables together made up more at least in Europe than all the other technologies together so I wonder which assumption these or which basis these assumptions are based on that CCS and nuclear would make up such a large share and then a second question is given that we don't know yet when CCS will become available and whether it will become available on a large scale and economically viable what is the risk in using this technology and can we bear this risk and what are the alternatives okay Bob Bob McNally with the RapidAnne Group given how the shale gas has snuck up on us here in the United States not because we found shale but we realized we could produce it economically with hydraulic fracturing and horizontal drilling Fatih could you please venture a guess as to how much shale we're going to find that can be produced produced economically in the next few years at any any rough estimate of what increase in reserves we could expect globally and then elaborate a little bit on the environmental challenges to producing that gas especially in densely populated areas such as the Marcellus or Europe thank you and then the last question entirely Dow Jones you included CCS in your projections I'm curious about to what extent you included that CCS in China's coal-fired post-conductor combustion capture it seems that much of their their emission growth I think is almost doubling is based on their their coal-fired power use and I'm wondering if you have adequately compensated for your projections there for the first question CCS and nuclear and renewables we we think these three options are necessary we are I would say in different countries in in in what Fadi explained this is a US case and the nuclear is certainly it's a very important part and CCS coming after the 2020 in globally speaking yes wind and renewables certainly is a very important option to I think we have the numbers that but it's if wind or other renewables are not available certainly CCS must happen if CCS does cannot happen yes we need more nuclear so all these three are related and sometimes we are criticized that okay when our assumption and wind is too low we could have much more that's what the wind mill producers are telling us fine if that's a case we have less CCS or less nuclear but if it doesn't happen we need nuclear or CCS and next year we are going to publicize so-called energy technology perspective so we are making a little more of what's the cases rather than just simple one scenario like 450 we could have higher renewable cases for example and what the cost it what does it cost mean it could cost more than 450 so so by doing so kind of sensitivity analysis we will try to do next year CCS in China yes certainly that is very important part of the solution and in China we make a presentation that the coal power plant major part of the coal power plant should have CCS otherwise this 450 cannot really happen and technology roadmaps which we are developing certainly call for not only 20 CCS demonstration project but 100 project in 2020 840 project in 2030 and even 3400 project in 2050 that's the magnitude of the CCS necessary to make this 450 scenario possible in the future and the later I mean at the beginning like 2020 to 2030 yes certainly this deployment of CCS be in the developed country but after 2020 yes our 2030 much more I would say CCS must be deployed the emerging economy like China otherwise simply would say carbon mitigation is a scientific fiction for gas yes yeah gas and a first of all just cross one remark to the later overdial if we don't have CCS and nuclear believe me renewable cannot save the world alone that is we need definitely some other things and the zero emission technologies efficiency and renewables are the top two policies which would help us but we need others that especially nuclear as a base load electricity generation technology is a key technology here we don't have the luxury to categorically leave out nuclear from the picture about CCS Mr. Tanaka already mentioned but again CCS is you are right different than renewables and nuclear it is not yet fully proven technology such as renewable and nuclear we still need to see CCS to address the challenges of economics technology and regulation but we are working on that in terms of the the contribution of the unconventional gas worthwhile to the global gas production it is very very difficult but our wireless estimate as you will see in our book it can go up to in in 2030 up to 10% of the global gas production up to 2030 of the global gas production but I hope we are wrong and it is higher as I told you in many basins throughout the world there is a very strong interest in many countries and in all of these countries not only the countries national oil companies gas companies are working but many companies who have already gained experience in the United States and elsewhere are showing interest in terms of financial interest in terms of exposure activity in Asia and in in Europe thank you well I think we've run out of time so I want to thank you all for coming and doing this presentation I think it's very interesting to be in this world where we have a much more positive forecast of $150 barrel oil and spending was it more than $30 trillion dollars to get to 450 but I think that's the nature of the world we're living in with energy and climate so again join me in thanking all three of you