 I'm no botanical. Let's start the energy workshop energy and climate workshop We have time until is a seven right right correct. Okay, so let's aim at two hours session and If you want to have a floor you have to Push the button. I mean when if I give you a floor and then push the button again to off to turn off the light that is The process of getting the floor This is a energy session. I Have some short presentation of how I see the current energy security And climate mitigation or sustainability issue be combined together and some issues for or security as well as Policy of geopolitics and it covers very well what we are going to discuss. So just give me The present focus the presentation over there. I used to work for the IA international energy agency It always gives some interesting insight by the world energy outlook This is that the new one will come very soon. But the last year it was 2017 version and They give us a very interesting for revolutions in the energy sector in upheaval, so I may say one is the first one is a US share revolution So it gives us a Undisputed global leader for oil and gas. This is a very strong word undisputed Because of gas is already US is gas exporter will soon be the oil exporter So energy independence energy dominance is what The former president Obama as well as mr. Trump really wish to say so US is a hegemon in the fossil film Coal is also abundant in US Another second revolution is solar photovoltaic revolution and IA first admit that Solar photovoltaic will be the cheapest source of energy new energy New electricity in many countries. This is the first time ever IA admitted and this has a huge impact to the relative price of the mix To gas to coal to renewables Excuse me to that nuclear this has huge implication the third one is a China and China is Moving toward the green revolution by using gas to replace coal and lots of renewables with State grids expanding the grid lines So China's green revolution is the third revolution and the fourth one is electrification so using the Electric vehicles digitalization AI So this is the future of the future energy and those who don't understand this will force countries to Appraise the energy security and and sustainability Strategies and those who don't understand will perish that they say the important thing is the latter three revolutions are happening in China Bizarby US is leading the fossil fuel so China's strategy is clear by Connecting grid lines and using photovoltaic solar and wind For the electric vehicle So US is the conventional leader of the energy by share revolution while China is trying to be the new generation Revolution by the photovoltaic and electricity EV etc So this dichotomy is happening in China in the world energy market Which side are you taking or which policy you are taking between these two major players is the issue this is a chart of energy Dependence on oil and gas importation the vertical axis gas import ratio While horizontal one is the oil import ratio So you can see that in the right right hand upper side is both Importer of oil and gas the left is both exporter of oil and gas and green a blue to red From 20 current situation to 2040 change So China is now importing 60% of oil and about 30% of gas Will soon be the 80% importer of oil and 40% of gas importer So India getting worse Japan Korea stuck in the hundred percent right hand top corner because We continue to import 100% of oil and gas. We stuck there The US moving toward the other direction. This is a very big contrast US will be the exporter both of gas and oil in the future. So They are the US is a kind of joining the exporter side rather than importer side the China's policy is building another acts the third acts or of Renewable energy and increasing renewable energy and reducing the fossil fuel dependency from Middle East From Russia and from the United States. That is the China's geopolitical strategy So they have much more freedom of of Messing that Middle East or really or fighting with Russia so US advantage of this share revolution is tremendous So Japan Korea should depends on the oil and gas from Middle East But the situation of the Middle East as everybody knows from that US Retrieval retrieved from the JCPO of Iran where this geopolitical situation is certainly Suffer the country like China India Assay on in the future European Union Japan Korea. So these countries in a way should make a collective energy security vis-a-vis Exporting countries I don't want to go too much But this graph shows clearly where the future of the energy mix happens all the renewables Nuclear play role, but very limited Gas is still important coal will reduce its importance And this is the cost of power generation in China The solar is getting very cheap wind is getting cheaper while coal and gas increase means Solar will be the cheapest source of energy in 2040 So that will be definitely be making a huge impact to the China China's police energy mix So this is what China is saying about global energy interconnection This is the electricity version of one road one belt strategy So do you do we connect our grid to China? for cheaper renewable sources, but losing some dependence I mean independence or Independently develop our energy security and sustainability. This is a really challenge for the countries around Mr. Bakuri of Massen talk about connecting Morocco to Europe by grid line it's already connected. So Europe is has Established this connectivity of grid lines and pipeline. This is a collective energy security and Sustainability strategy while Morocco is joining this European integration of the energy sector So this is the way one good example and good model for security Japan's problem is we are separated east and west So there's we lost the electricity after that great earthquake and tsunami Western part as a lots of Spare capacity but cannot transmit that electricity to the east who lost the nuclear power So blackout happens Hokkaido recently made a total blackout in the Northern Ireland because The connectivity was very weak. So for the security purposes and use of more renewables this integration of connectivity is very important I don't want to this is the renewable energy hundred percent companies I asked this question to Carlos Ghosn Are you joining this because you can see that GM BMW Apple? Famous big corporations a member 140 more and These companies aiming at renewable energy hundred percent user by 2030 or 2050 and They are requesting their suppliers to do the same if that is happening who Which company in the supply chain of these major global companies by the power? Generated by coal for example coal has no future. How can we get out of coal to do something else? How can we get rid of even oil and? gas for the fuel purposes in the future and then what kind of future that Middle-East oil producing gas producing country should think about to live with this kind of Structural change which is triggered by the demand side this demand side pressure will be a very Big one for the energy supply. We are always talking about supply side But demand side sustainability pressure will be very strong That is the reason why I asked this question to Carlos Ghosn. Yes, this this morning And this is a peak oil will happen when? I ate sustainable Scenario sustainability development scenario say it may happen as early as 2020 it should happen by 2020 in The lycra scenario the peak demand of oil will not happen so easily I was invited by the Saudi Aramco's Alfali Sun to make a some assessment with Daniel yagin about two years ago When the peak demand of oil happens that was a question to me I said by 2030 maybe and Saudi Aramco, maybe Lyra will tell us more but Saudi Aramco is thinking about Hydrogen for a future of the clean oil that is interesting technological development. So some kind of this this would say Geopolitical pressure as well as sustainable pressure will make a huge impact to everybody that is what I wanted to say and Final point about nuclear can nuclear survive. This is the cost curve of relative generation electric generation by the Lazard American investment bank and Nuclear is moving up dramatically because of the Fukushima accident the cost of safety is Making the nuclear light water reactors cost higher and higher while solar and wind is getting cheaper and cheaper How could nuclear? Continue, this is the question which I asked to the French for I mean the prime minister rural Fabius last night can France lead the global community of do using more Nuclear for the sustainability sake With this cost curve This is a really challenge for France and Japan and those countries who wants to use nuclear. That's for new nuclear Yes, this is for new no no no no outstanding is much cheaper correct correct. That's right Restarting nuclear power in Japan is much cheaper. This is a new plant So replacing the old new old reactor by the new one doesn't make any sense. That is the point You're right. Mr. Cooper. Thank you very much So this is the cost average cost of power generation in the different countries. Japan is the highest cost while Russia China Canada US are the lower so can Japan compete with other countries if The cost of electricity so high so how can we make a Cheaper mix of electricity by using more renewables Etc and be competitive. So this is Kind of difficult but interesting Let's say issue which we want to discuss. This is a nuclear I think only solution for the nuclear is force generation small modular type current big light water reactor We will not have any future. So there are many countries who are interested in Using light water reactor system, but stop it probably it's not good idea. It is just Doesn't have any cost competitiveness relative to the renewables Okay, let's stop here and we will start the Exposed by our Panelist and first in my list is Olivia Per Okay, I'm I will Like in my presentation to set up the scene of the US and China we discussed yesterday and today about the trade The trade battle between those two countries and I think it's Interesting and it was on the agenda of this meeting I think it's interesting to consider what could be the impact of this trade war on the energy scene and first of all, I would like to highlight the the landscape the the change of the landscape both in China and in the US The last ten years and in fact for the last ten years the landscape has dramatically in change And just consider the figures some figures in 27 and 2017 energy demand in the US is characterized by a great stability But there is a game changer of the Shale revolution, but I will come back afterwards total energy consumption as well as oil consumption Decreased by around four points percent and Refining capacity is almost stable On the contrary total energy consumption in of China increased during this same period by 45 percent oil consumption by 54 percent and refining capacity by 66 percent Just in ten years Internal production of oil remains stable in China increased in for gas, but in fact consumption of gas has been multiplied by a factor of four in just ten years So China is now the second importer of LNG behind Japan cool production and consumption grew by 20 percent we it's In the Western country we consider that coal is over, but it's not the case in China and the consumption increased but coal demand picked in 2013 despite a recent slight increase China has moved has started to move away from coal and in those last ten years the share of Coal in China's primary energy mix declined to sixty point four percent From seventy four percent just ten years ago Electricity consumption almost double and it is clear that energy security Is the Achilles heel of China? China's oil import dependency rose Ratio rose to sixty eight percent in 2017 the highest in its history and Natural gas imports dependency rose to almost 40 percent a few words on renewable energy which has been increasing both in China and in in in the US, but when the Renewable energy increased by a factor of four in the US it increased in the same period by a factor of 30 in China and 40 percent of global investment in renewable energy are done in China and you know that for Chinese companies are amongst the five biggest producers of solar panel which was not the case at all ten years ago The geopolitics of oil and gas experience during this period the game changer of non-conventional hydrocarbon in the US and thanks to shell revolution All oil US oil production increased by a factor of two despite the drop of oil prices and The US are now the first producer of petroleum ahead of Russia and Saudi Arabia gas production increased by a factor of 40 and US became a net exporter of gas and thanks to the shell oil and gas revolution energy US energy dependence has fallen from 29 percent in 20 or 7 to only 8 percent in 2017 This is opportunity opening wide opportunities for the US diplomacy as it is in clay explained clearly in Trump's America first energy plan the clear objective is to make America energy independent and the energy independence of Obama has been replaced by an energy dominance and I quote one of Trump's tweet American energy dominance is a strategic economic and foreign policy goal of the United States the US wants to become and stay totally independent of any need to import energy from the opaque cartel or any nation or style to our interest So it is not surprising that energy is also at the core of the Trump war between China and the other Trump led war with China. I Just remind you that it started in March and June 2018 when the US imposed the tariffs or quotas on steel and aluminum and Then in July and August the US began imposing tariffs on 50 billion Chinese industrial goods on the ground of unfair trade practices as China has Retaliated with tit for that that measures President Trump has imposed tariff on 200 billions in Chinese good and threatened to tariffs all Chinese imported goods During this escalation energy product has been included by China such as LNG or coal As China domestic energy consumption has grown the country has become a significant destination of US energy export China has taken a large share of incremental volume of US LTO and emerged as the second largest buyer of US crude in 2017 but Despite these dramatic increase the US account for less than 3% of Chinese crude imports As a global market is fungible China would likely replace the lost US barrels for its top sellers Russia or Saudi Arabia and clearly China will also continue to import Iranian crude Despite the US embargo So in the short term the biggest winners of an oil trade war between the US and China Would be OPEC and Russia which is quite surprising China has retaliated To the US tariffs by imposing amongst others a 10% tariff on US LNG The US is becoming the third largest Exporting countries by capacity but currently the US is not a major supplier of LNG to China The US represent less than 4% of total Chinese LNG imports in 2017 and the trade conflict could however have a significant impact on the new wave of US LNG project the Chinese Tariffs may delay or even Stole some US LNG project and slow down the expansion of US LNG exports China will not lack Alternative resources a cut in US LNG import by China will open the door further to cooperation with Russia Other energy exporters will benefit such as Qatar Papua New Guinea or Australia and Canada and the recent FID taken by LNG Canada clearly targets Asian and China's market Since August 23 China has imposed an additional 25% import tariff on US coal in 2017 China imported in fact three million tons of US coal Representing only one percent of total Chinese import and almost nothing in its total consumption So the impact of the tariffs will be minor on the US side China accounted for only five percent of US coal export but The effect of China's tariffs on the US coal industry can be seen in fact as a missed opportunity for US miners as The Chinese market was a potential outlet for US coal Trump decided also to impose on on top of a quota of 2.5 gigawatts of import free of duty 30% tariff on solar panels The objective was to stimulate the creation of new job in the US Some new factories will be built creating some jobs however the impact of On the downstream industry will be significant. That's why the solar energy industry association Were opposed to tariffs Developers have since reported the consolidation of freeze of more than 2.5 billion in large project Let's add to Additional impact for the oil for the energy industry in the US The imposition of the tariff on imported steel will have an indirect impact on the US oil and gas industry and prices of US steel products as sold so this have a significant impact in the for the oil and the oil and gas industry and Also, that's why the oil and gas executive expressed their opposition to the tariffs but Though we can't ignore the fact that the trade war may have an indirect impact on energy market and There is a risk that the current rate tension escalate further would have an adverse effect on confidence asset prices and investment and Impact in fact the economy grows lower economy grows would in turn reduce the pace of increase of crude oil and energy demand and the this is the last potential impact of this Trade war between China and the US Thank you, Olivier just one small question to you said that China will continue by oil from Iran Do you think China will increase the volume of importation or decrease with this trade? War between US and China may have certain impact will China Try to do a deal to reduce the oil importation or Just battle by increasing the importation of oil from Iran, which do you think China will take? I'm convinced that China does not care about the embargo and In fact due to the war the trade war between China and the US They will continue to import and even increase their imports What could be the retaliation measures the retaliation measures as explained by? Trichet just before are Detrimental for Western companies and that's why total for example decided to to drop from Spass LNG 11 But what could be the retaliation measures of the DOG or the the US government towards? The Chinese company and by the way I'm convinced that the Chinese the Communist Party in Beijing will urge companies to Oppose any Decision of the US Is there any Chinese participants in here to comment? Maybe not Okay. Well, maybe we may back to this Iranian issue maybe later, but let's move to Laila. Thank you, Tanaka son Well, we are in the second day of the word policy conference the end of the second day, so I will not Insist again on the fact that the global context has changed again over the last decade And I think and I have some slides actually that needs to be that they need to be projected but Thank you And and after I think they're very comprehensive and an excellent Picture that Olivier has shared with us on all the the aspect that have changed over the last decade I'll just focus on a couple of points some couple of subtle trends that are that have been Changing over the last ten years, but not a going a little bit more unnoticed than the rest Should we wait for the slides or should I just proceed? It's coming It's coming But you can talk all right, so the first point that I wanted to mention I mean mr. Bakuri of our lunchtime has rightly pointed out that for example PV Solar PV module cost have decreased Over time, so they have actually dropped 80 percent between 2010 and 2017. That's a massive drop But I would really want to insist on another Cost decrease that is happening in the energy sector, which is related to storage electricity storage And that's I agree mostly driven by by EVs battery EV batteries But at the same time, I mean it's quite important to mention those cost drops that we've seen in the battery in the including a stationary applications a great scale batteries So Electric storage storage in general have been decreasing 60 to 80 percent since 2010 And they are expected to drop by the various agencies investment banks and and researchers by an additional 50 to 60 percent by 2030 But I really want to point out the large uncertainty That is prevailing in these outlooks large uncertainty because we don't know which technology would prevail We don't know which chemistry is gonna prevail We don't know how much money R&D money will will will be put in those technologies Where the manufacturing capabilities will be will be focused in or concentrated in next few years And of course government support. How will government support will evolve over time? But I think it's fair to say that we can see some additional cost decreases in energy storage as well in the wider sense the implication for me or the implication for any energy player in the scene companies and countries alike is a race a race to gain leadership in Technologies and beyond that a race to secure access to the materials and commodities that are underlined these Storage technologies and I will give some some some examples later on the second point the second subtle subtle change that I am seeing at least in In the energy sector over the last Decade I mean of course there has been an unprecedented volatility in oil prices and and it has been widely documented in press and we all know about it when oil prices increased to $140 in 2008 before dropping to $20 to $30 and now we are in that 70 to 80 band around that so Here again We would argue I mean any planner will argue that this is just another commodity cycle and and nobody really likes commodity cycles and and it's an uncertainty Uncertainty that we have to live with and I think the industry has been Very used to live with this some sort of uncertainty But the implication of these volatility is I think every planner's nightmare We are today in a situation where oil demand outlooks can go from a Today's market of around 100 million bars a day to anywhere between I mean it can increase to 80 million bars a day by 2040 or Grow increased to 112 150 million bars a day When you are in industry with with huge capital investment programs It's it's it's a it's really a nightmare to be able to to plan in those circumstances So today that gives another type of race as well race for cost leadership Race for profitability, but also a race to guarantee some sort of security of demand And that security of demand is slightly different from the traditional definition of said a security of demand that we have seen over I would say the last two decades in the oil markets. We are seeing today a lot of several players investing in in Securing demand for oil and gas in established markets So you invest in making sure that I see engines Continue to be the engines of the future forces for sustainable transport You continue to to invest in low emission fuels And in on-board co2 capture we see that in the heavy-duty vehicles in the shipping industry as well We are seeing a lot of love changes happening there in those established markets but you also see another trend in a race to capture market share in new markets for for crude and gas and I'm thinking here about of course petrochemicals plastics polymers for for crude and for oil products in general and And in transportation for gas And in this context They will be In this the discussion to prepare this this panel we talked a lot about Revolveries and I prefer to use the word Shifting alliances, so there will be a lot of shifting alliances. They will be a lot of I would say proactive strategies. I prefer to use this word But and we should not forget that in addition to the traditional alliances that we are used to in in this here again highly capital-intensive sector the alliances today in many cases are being driven by large corporations private corporations, but also large increasingly large sovereign funds other national champions of new forms and National oil companies large national oil companies which in many cases are being perceived as competing with each other because they are pursuing similar objectives And similar strategies. They all want business integration. They all want downstream investments They all want global footprint because there's a limit to what you can achieve in your domestic market It's there's a limit to what you can sell in the domestic market And there's especially if you are heavily exposed to mature domestic assets so This proactive strategy is that I've that I've been talking about all those Shifting alliances are driven by these three key aspects The first one is as I mentioned the the race To secure market share by making sure that we are or that we continue to be low-cost as much as possible and through Of course optimal extraction of resources an Increasingly important capital discipline, especially after the volatility of all prices that we have seen And off in addition to the to the low-cost position This would be coupled increasingly with the low carbon intensity of some operations So you put that in a melting pot and the conclusion is that Of course the Russians and the Middle East and NOC's are very well positioned because to take advantage of their low-cost position We are talking about two to four dollars per barrel void equivalent In for development and production costs There will be a bigger challenge of course for Latin Americans Asian NOC's Because simply their costs are more than double that or for Canadian players Which are disadvantaged by their the carbon intensity of their upstream operations? one word on capital discipline I Mentioned I mean spending rates in the industry have been scaled back in the wider industry by NOC's and IOC's majors all alike And we've seen cuts in exploration budgets, which and I will trigger and I will talk about it a little bit later on in my conclusion might be triggering another commodity cycle that None of us actually like in the end But most of the national oil companies today are investing at higher rates than than the majors and but in general if I think it's quite important to mention here just a caviar that apart from CNOC Petronas and Sino-pec Investments of no most national oil companies are very much focused on on domestic projects and and domestic markets And this is the reason why you see now this rapprochement that Olivia has mentioned between the Russians which are differentiated by their By the scale by their portfolio longevity And the Russians do which are now courting National oil companies from the Middle East while you have the Asian national oil companies Still focusing very much in the short term our resource capture Initiatives but not at any price and we have several examples in the headlines. I mean you're all aware of the OPEC plus Alliance Apochement between Saudi Arabia and Russia The several investments or potential investments in the international gas industry Qatar emerging as a major shareholder in Rosneft. That's another example 18.95 percent In the nine billion dollars deal because the talks with the China China's CFC have collapsed. So these are all examples in the headline that sort of support these Hypothesis that I that I presented here And Since we are talking about market share I thought it was quite important to say a word about the chemicals business more more specifically because that there's a question that I very often get is why is the chemical business increasingly considered in integration with with with refining capacity with downstream investments One example is Saudi Arabia aiming to increase refining Capacity to eight to ten million bars a day and to double the pet cam capacity by 2030 Here the scale of of the investments definitely has a weight in the market of some key Petrochemical products, but also potentially to it raises some concerns Around a long-term financial performance of the business because the issue that we are facing is that in many cases the return on capital employed of Petrochemical project or a chemical project is registered single digits Percentages while the industry as we all know prefers to have 15% Returns usually so the integration with refining becomes Very valuable a very important we need much more capital discipline and in the area and In the basket of opportunities It would be also great to add some quick wins in terms of measuring acquisitions to be able to build this Sustainable chemicals business coupled with with with refining But these are really the only ways that that we could see to improve the financial performance of of this important business for the for the oil industry the upside is that Market access to the same demand growth centers Targeted by oil and gas namely China India Southeast Asia, etc Really facilitates the building of Brands the building of presence, which is much more important in the petrochemical industry And it's it also facilitates strategic partnerships with with with the with major Corporations in those countries, but we still need and I think the industry is is realizing that we really need large marketing efforts large branding efforts to be able to able to be able to establish a presence Sustainable presence in this important market for crude and The third race that I mentioned in my introduction was around the technologies and commodities We are faced in situation. I use the example of energy storage where Many countries and companies are engaged in a race to secure the minerals and materials to take leadership in Clean and clean and storage technologies So for example, I mean it was already mentioned a few times that China has been leading global investments in renewable energy We all know that What has been less documented is that the country has been quite aggressive in its race to Dominate in energy storage as well. So for example, and now it's very clear by the end of 2017 2017 the country has issued a unified nationwide policy to boost the energy storage industry in the country So to give you just some order of magnitude the Chinese industrial capacity at the end of last year was around 389 megawatt and Between in January and June of this year. So during six months of this year They put in place new energy storage projects of around 340 megawatts, so we are doubling the capacity in six months and that's across the country in various provinces including Guangdong including including Jansu, etc One word about the technologies themselves. I mean apart from pump hydro where We have many countries that have installed them over the years The three key other families lithium-ion flow batteries and high temperatures They all have these large cost reduction potential that I mentioned earlier with the caveat that it comes with a large uncertainty So for example, lithium-ion batteries for stationary applications could drop up to 60 60 percent by 2030 and that will depend a lot on which battery chemistry We are following but the stationary applications and I insist on that have much higher costs than the EV applications because you need battery management system systems you need more hardware for the stationary applications, but they are benefiting of course from the growth in the EV industry and The flow batteries and these are my personal favorites Not only because of the beautiful colors that we see in a vanadium flow battery These Batteries can actually drop the other cost can actually drop two-third about in between now in 2030 Here again huge uncertainty, but the beauty of flow batteries and that is that they are independently scalable and The power and energy storage capacity characteristics make them very much scalable and modulable Which makes them very well applicable for for grid-scale solutions but all this All this rosy picture of cost decreases comes at the price and the price that I wanted to highlight here is the minerals that And and commodities that are on which these technologies are dependent on so the issue that we have today is that this all the technologies Are the technologies around the energy storage revolves around just a few key commodities We have the NMC the nickel manganese cobalt We have copper lithium of course graphite zinc and now increasingly vanadium Copper and nickel are already key industrial materials key industrial metals Which are trading on commodities commodities exchanges and consumers are very much used to Managing supply risks Manganese and graphite supplies are available in sufficient quantities But the issue now is really around cobalt and you see in my slide the price volatility In cobalt and lithium because these there are major concerns as we as we know around security of supply for those two commodities and and and cobalt primarily is driving some country's strategies including China and China's aggressive investments in DRC Democratic Republic of Congo where 60 percent of supplies of cobalt are concentrated Is quite key there, but it comes as we know with political instability with Conflicts of our mineral issues, etc so even if with the industries and the industry and The research development in the energy storage is trying as much as possible to reduce its dependence towards cobalt and and other Key commodities there by switching to less cobalt to reach cathode on or trying other other alternatives the the Five leading Galitium ion battery manufacturers that mr. Carlos gone has referred to Are definitely the still dependent a lot on cobalt supplies so in conclusion We talked about the US Russia Middle East China a little bit about the the EU as well I mean, of course, there's a lot of there's a lot of repositioning and alliances and changing alliances in today's world But I think it's quite important to mention that there is still a continuous Emphasis and a continuous focus on the key fundamentals, which is growth Profitability and increase it trying to have a proactive technology strategy because that's really a must for the future one key area that has been neglected so far and And I would like to to finish on that is really system flexibility more than more than much more than system security actually and And and I see that and I've been an advocate actually myself of the LNG industry as well because It's bringing liquefied gas from the other side of the world Frozen at minus 162 degrees Celsius minus 260 degrees Fahrenheit is a beautiful Technical challenge is a beautiful commercial challenge But it does not necessarily answer The the issue of system flexibility simply because the market mechanisms that we have today are not mature enough to reward System flexibility. We still have pricing mismatch. We still have arbitrage that the traders and the industry is Sticking of advantage rolls and we still have marketing efficiencies that hampers Energy system flexibility to be properly rewarded. So ideally we want to have more tradability more connectivity between between regions between neighboring countries and with global markets and that then there's no secret there We need more investments in infrastructure in midstream and downstream infrastructure for that. So that's why I focused Surprisingly most of my presentation on storage because there is a growing awareness in the industry whether we like it or not that energy storage is of incredible and paramount importance because we've I mean in the country where I'm based There's a large swing of demand for example, you see in many other countries a massive introduction of renewable energy and in many cases this questions the large capital investment programs in the oil and gas part of the industry and That creates another commodity cycle another cycle of volatility That is definitely not in the interest of the producers and not in the interest interest of the consumers. Thank you very much Thank you. Thank you later. Very good presentation One point I won't ask you that IA free agree with many of the points you raised For example, the industrial use of gas and oil will increase rather than fuel The future of the gas for example, it's not the fuel for the power generation It's going to be the petrochemical as that input. So And also I understand that for the storage It's Saudi Aramco serious about using hydrogen as a possible way of storage of the clean source of hydrocarbon I mean non-carbon fuel I talked with some of the CTO of Saudi Aramco that Taking out the carbon dioxide and put underground as a enhanced oil recovery It's a capture and storage. So the hydrogen becomes the clean source. So by doing so Exporting clean oil as hydrogen is one of the technological option for Saudi Aramco. Are you seriously thinking of this option? Here I am not speaking in my in my capacity as Saudi Aramco here. So I will not I will not make a comment on that I think I mean I can only comment on what the industry is doing on that and and there are there are many many Initiatives OGCI is one of them and I think a lot of the players in the industry are quite serious in investing as much as possible As I mentioned earlier to reduce to try to preserve market share in established markets as much as possible And including capturing CO2 in multiple applications. That's that's all what I can say on that Thank you very much. Let's move to Richard Cooper Our session is called energy and climate change and I just want to remind everyone that while these two issues are closely related Climate change is due to more than energy and in particular Roughly speaking one quarter of greenhouse gases comes from agriculture and changes in land use And so when we think about climate change, we should not only think about energy We have to think about energy is important But we have to think about other sources of greenhouse gas emissions as well We all heard last night Laurent Fabius talk to us about The urgency of dealing with climate change According to him and he's been involved in an intimate way now for at least 10 years He reported on the latest IPCC report Which I have not read I've only learned about it from a few Newspaper articles and what he said last night But it Two things surprised me about What I have not read but have heard about One is its specificity. I followed the science of climate change for at least two decades and as an interested observer not as a scientist and There's still huge uncertainties including the sensitive Sensitivity is called of the climate itself to greenhouse gas concentrations in the climate They have not changed in 25 years One and a half degrees centigrade to four and a half degrees centigrade for a doubling of co2 from Roughly 1800 So we've invested tens of billions of dollars in research on climate change We know much more than we did 20 years ago And one of the things we know is how complicated the earth's atmosphere and oceans are So that in spite of all of this greater research and we're much better informed on individual pieces We still do not have an accurate overview of Climate change and its relation to greenhouse gas emissions So I was given That background. I was surprised at the specificity That was reported at least again. I haven't read the report but I've reported in the newspapers and in Fabulous's speech last night and In order to get get that specificity They had to make a lot of assumptions about things that we actually don't know about They may be completely right in those assumptions. I don't have a judgment on it But they may be also badly wrong and so we should not take that as firm knowledge about the climate even from the accomplished scientists The other thing that surprised me that this is again from newspaper articles and Fabulous's speech is the degree of urgency which was conveyed Apparently to the readers of the report and maybe by the report itself and statements about 2030 and I will just say flatly as a practicing Economist for a half a century that That will not happen by 2030 So we should get it out of our heads that no we're not going to turn society over on the around the world Over the issue of climate change is not just not going to happen now What might happen is that we overshoot and then Technological improvements permitted us to go back down to that one and a half I don't rule that out, but the notion of stabilizing the Average temperature increase at one and a half degrees Centigrade by 2030 is just out of the question in my view and So we need to think about much more actively if if the scientists are right in What they say much more actively about adaptation along many many different fronts Not just building seawalls But with biodiversity and so forth the human agency can Adapt the of all of the species the most adaptable are probably human beings some ants and some bacteria But the human beings have an enormous capacity for adaptation To change particularly if there's notice about when the change is coming as we have increasingly So I think it's I guess I would say bad politics To urge strongly that we do something that's going to be impossible That sounds like mr. Trump He actually has some things as it might not climb and change but other things which I think are possible Now my view on the trajectory Talking just about the energy side I know that a number of environmentalists at least in the United States and I gather in Europe also deeply regret the shale gas Revolution on the grounds that it's another fossil fuel and it Generates greenhouse gases and of course they are correct in their factual statement But per unit of useful energy Natural gas in producing electricity produces about half the greenhouse gases as coal does so the My trajectory for the not the next decade because I think it's impossible but say for the next three decades is natural gas as the bridging incremental fuel and Solar as the ultimate source of energy supplemented by wind and other things Geothermal but the main source will be solar and if we've heard from the previous presentations the Cost of solar energy has come down dramatically just within the last Decade and so basically in the short run The thing we need to do is above all prevent the building of new coal-fired power plants that's Which is strongly? Against climate change and of course heavily polluting And then there's the question of what we do with existing power plants those that have still have economic value and That's an issue certainly for private firms as in the United States and some other countries but even for state ownership of Coal-fired power plants and that's an important budgetary decision Do the coal-fired power plants which have very low Operating costs once the capital costs have been incurred and they last for 40 or 50 years Are they going to be taking out of production? And can we have an international agreement on that? Probably not can we have an international understanding that it would be desirable probably feasible leaving aside mr. Trump for the moment and And and then it would be up to individual countries whether the extent to which they accelerate the Shutting down of existing coal-fired power plants, but above all we have to stop building new ones and And We have not built any coal fired coal is still very important in the United States, but we have not built any new plants For the last 35 years All the incremental power has been achieved by natural gas which has much it's a higher operating costs, but much lower capital costs to build and We've expanded some existing coal-fired plants, but we've built no new ones and all as I say all of the incremental apart from a modest amount of solar and wind and those those renewables and and then if the we're bridging a Period with natural gas to solar the issue comes up which has been emphasized by our previous speaker Electricity storage. I'm glad she did not use the word batteries because batteries are one form of Electricity storage chemical storage basically But there are other forms of electric storage Batteries of what we could call batteries in general are perhaps necessary for electric vehicles Which move around But they're not necessary for stationary sources of power and the true traditional ways of storing Electricity think of wind and solar when the wind is not blowing and the Sun's not shining are pumping water and Of course that only works if you have a lot of water which you can pump and flywheels Have been understood for many many years They're relatively cheap to build to build a really first-class one Requires special materials, but to build ordinary ones are cheap to build and you can imagine under any wind Turbine or a collection of wind turbines Five wheels around which store the electricity and which can be drawn on during when the wind is not blowing For mobile Things like cars and trucks and airplanes of course batteries are Much more important in the traditional sense and probably mostly chemical unless we go to hydrogen as a fuel I Have long favored under the heading of climate change Nuclear power So I'm not a conventional environmentalist in that sense But as we've seen today Nuclear power is now outclassed in terms of cost unless we get new smaller modular Nuclear power plants which have been designed down the river from me at MIT and in other places But we we have not seen them yet in commercial use and so they remain to be tested I saw recently a press report on fusion saying that fusion practical fusion commercial fusion was Five years away I'm old enough to know that It's been said that fusion was just within a two decades since the mid 1950s and I simply don't believe it believe it Yeah, and I'm not willing to put more money in it, but as a taxpayer But some people are apparently so we're still working on fusing, but I don't see fusion as a practical operation in this and I guess in Talking about timing. I'm persuaded of the tremendous inertia in human affairs Even in a rapidly growing economy like China And now India and more slowly growing in Europe and the United States We have a lot of legacy Capital stock very large in the United States in Europe, but Even in China we heard in an interview today that there are now 9 million cars in the United in the world From Goshen and 9 million cars in the United States the average car lasts eight Years that's the average I drove a car once for 14 years from the time it was made until the time I sold it actually didn't junk it I sold it so think about converting those 9 million cars all internal combustion engines into Climate change friendly vehicles if we were to stop producing Internal combustion engines this year and from January on produced only electric cars Only electric cars it would take Nearly two decades to replace the outstanding stock of cars and there are also trucks and other Vehicles And then I want to remind everyone I'm sure everyone knows here You cannot just look at the vehicles that are electric you have to look behind it to how the Electricity was generated and we still generate most of our electricity with fossil fuels and So you have to look at the entire cycle and not just the fact that the car is electric Let me say a word about Mr. Trump and his Withdrawal from the Paris Agreement it happened by coincidence He announced his attention to withdraw in June of 2017 and as you Probably know it actually takes three years to formally withdraw. So he announced his intention to withdraw Two weeks later. We had an annual conference of mayors It's an annual conference two weeks later representing 1,400 cities all of the largest cities in the United States and the conference of mayors Republicans and Democrats voted overwhelmingly that they were not giving up on Addressing climate change now it has to be said that many cities do not have a climate change policy But surprisingly perhaps many u.s. Cities including mine Cambridge, Massachusetts Do have a climate policy and the conference of mayors in direct reaction to Trump's announcement have Announced that they were going to carry on and of course we know some states California Upfront but that includes Massachusetts and other U.S. States are going to carry on with time climate change and the time dimension of this issue problem challenge is such that Trump will come and go Before it's been solved Seriously, and so I do not Trump can do a lot of damage as President but it's not mainly in this area things are going to carry on They're going to be driven mainly by market phenomenon. Well, we've talked about the changing cost structure for solar and and wind and nuclear and coal and so I That's not high on my priority list of things that the damage that Trump Can actually do Well, I have a lot more I can say but that's probably time to stop and we can talk about other things in Congress Thank you very much. Dr. Cooper. As you say this IPCC's 1.5 degree C special report was just released and They are very Kind of ambitious or really surprisingly tough and specific very specificity there and to make net zero emission by 2050 is necessary and and Compared to the two degrees healthy a scenario. We need three times or four times more investment needed and As you say if over shooting happens Definitely the carbon capture and storage or usage Will be the key technology to achieve net zero emission by that time so Carbon storage and capture is is really technologies there But without carbon price or carbon tax or some kind of penalty on carbon. This is very difficult so United States In in some companies has carbon pricing and and reducing the carbon contents But this carbon capture technology It's only possible in a Saudi Arabia or these oil producing country as I enhance the recovery but just burning cold and take out carbon dioxide and And put it underground is probably Almost impossible. So now the other technology direct carbon capture from the air is Also discussed. So the things is but this is another very high cost Other things is yes battery of the electric vehicle as a system if there's a millions of electric vehicles On the market one on the street that they could be connected and they can provide the gigawatts of storage As a system. So that is one of the Chinese strategy or some of the Bebe companies are thinking about it's a digitalization and connectivity So part of this storage program Fusion interesting. I learned some of the fusion company in the United States are really ambitious and some money Venture capitalist put in I hope One of them may work, but we'll see That's that's a part of my comment, but let's move to Masuda-san from the Japanese perspective Thank you very much. I just follow on what Olivia Pell said, but I don't follow my my text prepared because almost good things have been consumed by this time just how I see The tension between China and the United States from Japanese iron and the same time a historian since Roman Empire, so I see put it down long perspective This is my feeling As I made my intervention yesterday in 1980 50 the 50% of or more world GP was produced by just two countries that is India and China and If history may repeat itself the rise of China is inevitable course My feeling is that probably the US people top people with Sensitivity has realized the creeping shadow of China, which is accelerating speed and They have an easy Feeling don't I don't say fear of they could be overtaken by China Inevitably so before China rise to much bigger than the United States unable to even touch fingers on that They like to everything to slow down or dig deter the course of Chinese growth This is a very basic Sentiment of the US which is not the only the product for Donald Trump in energy scene a lot of things have been ongoing and China may have no problem in securing fossil fuel energy Let us all be a person already China's taking initiative to increase import from Qatar of energy and also recently China agreed made agreement with so tall to increase its procurement from total from one million Tom per year to 1.5 million and all seen China was the largest import of you US oil in May this year that Proportion percentage in Chinese import is not so big and they have no problem in that But as for coal there is a problem. Yes, China is a best student in dealing with coal at least I'll wait for the last few years, but What is doing in the name of one belt one road is Chinese Intensively exporting its coal fired plants technology to One belt one road countries There's interesting data today about 130 coal fired plants are built under the Chinese initiative in those countries and new new coal fire perhaps not necessarily using the state of art clinical technology and if you look back from 2002 2016 China lead construction of roughly 240 coal fired power plants project in those areas as well. So China is making home green and exporting black things abroad. This is what's happening and But in climate policy perspective China is consulting the leading position in both the deployment of renewable energy and Establishment of the world's largest carbon market Instantly a friend of mine academic in China is designing this Largest carbon market, which seems to be working well because of the size involved so China would be the leader in those two areas and One of the one of the reason why China is so successful in renewable energies Not just because of government drive to clean the economy It's coming from like in the United States sheer competition among many participants for example in clinic company China there was roughly 2700 in 2005 2005 now in 2015 10 years later the number increased over 50,000 and Today that number is bigger and they are competing very fiercely with each other Because of the size of the market again and support plus government support that naturally led China to be the leader but in those areas China has a clear advantage in technological development Number one because of firewall around it Number two when Western companies come to China China want them to bring the state-of-art technologies and ask them to review all secret and softwares and hardware as they own so This is one of the reason why China is so fast in developing batteries. I Went to China last year and met several PhDs who are working on Batteries and they are so proud to say they said honestly well well behind America and Japan and Korea in terms of batteries, but we have a fleet of 300 PhDs only own battery and in a matter of few years from now We're gonna be the champion in terms of technology in terms of size of the deployment into the market in In terms of egg vehicles. Yes, China is a champion for example in 2017 there's about Global 1 million new EV has been deployed to the market in the world and more than 50% only in China and if you talk about global EV stocks 40% of global stocks are now in China and In terms of other technologies China is a champion already artificial intelligence for for various reasons But one of the scariest story just aside from climate and energy issues is China is using this for social surveillance Using those AI and they are quietly exporting this technology to some autocratic countries like some big country in desert just few footnote on If you I'm just quite an estimate by discussion we had about solar panel Yes, solar panels is good solar energy is good for work to be champion for incoming years But we are forgetting one side negative side of Diplometers massive amount of solar panels. How much energy do you think we need? how much environmental Externalities coming from purifying and crystallizing silicones and that number question and solar panel have a lifetime of roughly 20 years after 20 years But they do if they dump them as industrial waste It cause another serious environmental pollution all over the world if they completely recycle use solar panel The massive cost involved with many countries the countries there dare to bear the cost it's all already big problem for Japan and Germany and most importantly China and in many other countries who are now rapidly deploying solar panels, so we shouldn't forget this downside Although it's good for climate purposes if we pollute the entire planet we are going against the big Common good of the of the human race Lastly about TV Because my company is supplying critical parts for EV Let me allow me to say something about EV EV is pretty good But as Professor Cooper said it takes such a long time to replace all these existing fleet of combustion engines, but there is a light at the end of the tunnel If you remember a wonderful marriage of Prince Henry Henry of UK He drove Blue jogger out of in the castle It was converted EV Conversion of EV is one brilliant idea of increasing EV fleet on the planet converting old car is Life cycle cost of car making EVs far less because already it's used and more battery Provided a cheaper cost and better motor will make conversion of EV a big industry And I like I'm dreaming of a world where newly product EV is competing with lovely second-hand EV That's gonna actually the deployment of EV. So I like the end of my story's bright future. Thank you Thank you very much By the way, you talk about China and coal What is the Japan's policy about coal still? Japan is building the new coal power plant and even try to export the efficient coal plant. What do you think? Japanese policy on coal. I'm I'm a Japanese. I'm brought up in Meti, but I'm pretending to be a foreigner And I do not believe the policy Held by Japanese duty companies and the government about coal fire power plant is not Something recommended Japan is still constructing roughly 40 coal fire power plants and Japanese banks are very hesitant to stop Providing new loans to those facilities. So in a way, Japan is 10 years behind than average Western countries in terms of climate change. I don't like to criticize good engineers and having state-of-the-art clinical technologies, but Maybe it's time for Japan to depart from the old legacy of all those technologies and maybe Should fly high with some lighter technologies. That's my comment. Thank you. Thank you very much I cannot agree more and that's a reason why I asked the question to Carlos Ghosn or Toyota or whoever Say that these Renewable energy hundred companies will probably kick coal power plant out of anywhere. That is probably would happen Well, let's move to This lab from the international companies your point please Yes, thank you very much. I thank you. I have a presentation here. What basically I'd like to do is to Share with you the point of view from an oil and gas company on how we can integrate this climate change issue in the strategy of the company so it turns as an example, but I think it can be it can be useful actually to use that as Not necessarily a reference, but at least an example and to set the scene I have to say well, we're oil and gas company. We sell oil gas Electricity we are part of the problem. No doubt So we need to be part of the of the solution and we take this responsibility very seriously and the the main difficulty for us if I want to summarize for your benefit is on the one hand We consider our responsibility is to provide energy To people who need it and it was very clearly stated this morning that energy demand is going to increase so we have to supply more energy Affordable reliable clean energy, but more energy and at the same time we need to reduce the carbon footprint of What we sell to our clients and so joining the two together turns out to be quite quite challenging and On top of that we have to do that at a profit because we we're we're in business. So basically in In in a nutshell, I'd like to tell you the way we look We could actually try to achieve this kind of challenge which seems difficult To do that we take as a reference the two-degree scenario of IE I don't know whether this scenario is going to happen or not But at least it's a good reference that we we use and when you when you look at that That's on the right-hand side actually well on the on the left side of the slide, but the right bars You I think they are Interesting things to note. The first one is that the share of oil which is in dark blue is decreasing between 2016-2040, but still Oil represents more than 20 percent of the energy mix and as you all know Of course, we have to fight against the the natural decline of oil fields So at the end that's quite a significant amount of oil which has to be produced and brought to the market by 2040 in this two-degree scenario now if we assume that the Steel demand for oil over the long run is going to decrease we cannot Ignore the possibility that oil price would would go down and This is why it seems to us extremely important as a strategy to take that into account In order to already anticipate that trend and position ourselves on low break even oil Second you see that gas is increasing in In relative terms and in absolute terms also so clearly and I share the views that you mentioned Richard that that probably gas actually yes will be An energy that will be needed and demand for gas is increasing significantly So definitely going and developing our activity along the gas chain That makes sense and finally of course you can note that what is called renewable low-carbon electricity is developing very fast as well So we look at it as a as an energy company as an opportunity to develop our our activity But When we want actually at the same time to reduce the carbon footprint It's clear that there are many different levels that we have to work on and for us It's clear that that's not by just following one path that will manage to improve Our situation, but that's really by combining different levels together I mentioned five of them and I'm going to run you through Those ones the first one is of course energy efficiency Actually as an oil and gas company we consume energy very large consumers Through the refining or even the production activities and so by reducing Our own energy needs by improving our energy efficiency and I can tell you that something that I think it's extremely effective in terms of Reducing at the end carbon emissions is something critical The second aspect that I want to mention is methane. You know that methane has Impact in terms of CO2 equivalent Impact which is much higher than the CO2 so we need also and OGC I was mentioned as part of OGC I we are working with a group of companies to to reduce actually or to calculate and reduce our methane emissions and Thirdly carbon pricing of course is absolutely key because if there is no carbon price There is no way you talked about CC us It's good to be the the last one because you can take everything which had been said ready by different people So I do appreciate that but it's clear that without any carbon price It will be extremely difficult to to develop CO2 battle because of course You need to give a price to the negative impact that it can have in order to combine business models with Carbon fight So energy efficiency is number one clearly gas is number two and it seems extremely important as I Bonds back on something which has been said already, but we have to keep in mind that wood wood gas reckless coal in Electricity generation Of course, this is just this is difficult to imagine right away But you mentioned no more cold plants But if gas was to replace coal we would save about five gigatons of CO2 emissions which represents about 10% of what is being emitted worldwide today. So the The objectives would be achieved right away. Of course, that's not going to happen But that's to give you the the order of magnitude of how gas can be effective actually In particular for power generation if it was to to replace coal third aspect is Low-carbon electricity. I'm not talking electricity only but low-carbon electricity because as it was rightly mentioned it depends where electricity comes from But I think that for a company like ours what is very important is not just to be on one aspect of electricity, but to really develop activities along the chain by producing electricity, trading electricity, selling electricity and of course having production coming from either gas Through CGT's or renewables that we want to develop in order to integrate actually this Low-carbon electricity business. It is a growing business there are some challenges in terms of economy because Sometimes it is challenging we have to face it but by integrating along the whole chain we think that we can actually get decent returns along the chain for this electricity low-carbon electricity business The fourth aspect that has to be integrated is the biofuels and here public policies do help to a certain extent as there are some right one or More obligations which increase the level of incorporations of biofuels in gasoline or diesel And you see from the past that actually demand for biofuels has increased quite significantly and so it's also an area that will develop further and That we should capitalize on well as a matter of fact we are first Distributor of biofuels in in Europe and produced biofuels ourselves So that's an area also that we see as an opportunity to develop further Finally and maybe more over the the longer run But there is the issue of getting to net zero emission in the second half of The the century no doubt that this cannot be achieved without negative emissions compensation and we see two of them one of course is CC us and again We we for us we we spend quite some money 10% of our R&D programs in CC us but again What is absolutely critical is to have a carbon price in order to promote the business? model for for CC us the other one being natural things like forests where also there are some efforts to be made and We initiated actually some some programs through our foundation But what I want to to get at is that at the end I'm going to drop that one It's it's probably too too detailed that by combining all these different levels together We do genuinely believe that an oil and gas company like ours can decrease gradually the carbon intensity of the energy products that we sell to our customers and at the end what comes is to be in a position to to provide a service to provide some products Which have for the same amount of energy a lower? in a carbon intensity and and you see we've Defined actually that's an example, but that's for us what we have Issued about a month ago say okay. It's good to have words But at the end it's good to have ambitions and to measure what you want to to achieve And so we have as an ambition for instance to decrease the carbon intensity of the energy products We sell to our clients by about 15 percent. You see here. It's between NPS SDS scenario, but quite in line actually with the efforts that have to be done in order to contribute to climate change Challenge and that's the way we we intend to to do it So this presentation is to provide a practical example of what a company an oil and gas company major can can Have as an ambition in order to take into account to integrate climate change into a strategy Thank you. Thank you at this last could I ask one question? I mean I think Total should have internal carbon pricing for the future investment decision. What is the price level now? It's about the $40 per ton So it's increasing. I mean I I talked with Patrick did he said 30 so it does it reflecting the current I'm going to be very precise. Actually We have different oil price Scenarios and so depending on the old price scenario. It's it goes from 30 dollars per ton to 40 dollars per ton Thank you very much. One more question if I can About Iran Total announced withdraw the big money investment from Iran because of the possible Sanction take under the sanction of the United States The European Union prepared this special Clearing house mechanism for the investment to Iran With even with this Program total continued. I mean has determined to withdraw and not using this mechanism No, but I think it was maybe my colleague Bertrand is Knows that better than I do but I have the microphone. So I I take advantage of it But yes, if he wants but what what I can say it's very clearly and it was mentioned by Mr. Trichet today I mean there is absolutely no question given the retaliation from the US We are listed company in the US and we have more than one-third of our shareholders Which are American? Investment firms or pension funds there is no way that we are just going to ignore that part ones That's too important for us and on top of that. I should mention We had this Project in Iran as you rightly mentioned but did not commit that much money that was money to be to be spent in case We would have had the the clearance and we didn't have it Thank you. Thank you very much before Opening the question to the floor. Let me ask one question to all Let's say panelists the question is that if renewable energy become the mainstream and certainly the demand for fuel moves away from fossil fuel regardless of what mr. Trump is pushing and Demand for oil demand for gas declines and the oil price Getting from eighty dollars per barrel to eight dollars for example just for the sake of Our brainstorming or scenario analysis as such That's this low price of oil certainly impact Saudi Arabia Iran or Middle East or Russia and also the United States of the share of production That's this kind of new world with renewable energy means more peace in the Middle East for the other way around more war or battle because of The let's say battle for that diminishing Returns of a profit. What do you think? First it's clear that the oil consumption will continue to increase and Yeah, but it will happen in 40 or 50 years from now So I'm afraid that in between there will be many many revolution in the Middle East Well for renewable energy to become mainstream. I mean here again, you will need these are interments and technologies So you will need a lot of gas a lot of storage, etc. As we mentioned, right? So but I'm willing to play the game They really depends on when that will happen. So if you assume in in in 40 50 years time, I mean A lot of these countries. I'm hoping will have time to implement some of the reforms that they have engaged But here again, I mean, it's very difficult to put all the countries in the same basket because I Think your second graphic Tanaka son showed how the The regions are evolving the countries are becoming importers exporters at the same time and being exposed to oil and gas Prices totally differently. So I would not I would not like to simplify it by putting just one Given one just one statement, but I think for some countries there will be an imperative to push to Some reforms more extensively than others Do you think So what was occasion In when Yes Shabbat to you dr. Cooper I'm with Olivier. I don't want to play the game If we can play that game we can imagine we have a magic one And just to facilitate what we want. That's science fiction So I'm not willing to play your game Or if you want to play that game, I'm allowed to put in some other things as well Like what a magic one a magic one No, it's a good point at the relevant Keep peaceful for that magic one for the peace I Just because you know my exercise of this kind of volatility You know many companies are making the scenarios for for preparing for the unprepared situation I mean or very much volatile situation so so Yes, science fiction is true, but without thinking this kind of very unpredictable situation Well, thank we are we are in trouble five just a barrel rather than eight dollars a barrel What do you think about the 30 dollars or barrel? I think Saudi Arabia will survive 35 stars with difficulty, but it will survive 35 is very easy for Saudi Arabia. I think production cost is much too much and eight is impossible to imagine Yeah, without a magic wand to go along with it Well, let's see in 2030 what the oil price would be. I mean, you know, who knows and This is a difficult thing but You know without Thinking about unprepared situation Japan faced such a big mess after the crisis in in earthquake and Nuclear, so Prepare for the unpreparedness is unprepared situation is is very very important. Do you want to play the game Masuda-san? Yeah, I Think there is one one condition if I may go along with this what you said When as the director by in charge of oil market oil prices single digit I got a call from Riyadh from my friends and Explained how difficult it is survive that said we will be able to survive for a while. Anyway, if Oil prices should go to eight dollars per barrel or 10 the renewable energy need another revolution Total Voltaic is all old technology. It's already 150 years old already technology We need revolution the revolution one or two then make renewable more sustainable and Easy to provide and probably there will be a peace in the world because this integrated Supply system consumption system is more peaceful than in ticket to it So I go along with what Panakson said Thank you. Laila has some additional comment. Yes. I mean before getting to To your eight dollar figure that I think a lot of a lot of us disagree with In my second slide, I think I showed all the different levels of costs breakdown for different countries So, I mean before it reaches the low cost producers in the Russians and Saudi Arabia and others I mean you would have other countries which will be in deep trouble before that So I don't think the industry will stay not doing anything before that happens How about you? Well, I play the game because and and by the way, let's remember that at the end of 90s The old price was one digit figure so what seems to me as as a company important is To take into account not the fact that it will be forever, but that there is cyclicality and Cyclicality is something you can play with by being counter cyclical And I think that's part of the of the of the answer to the question saying first by the way We realize that even in the two-degree scenario of IEA I mentioned 22% for oil but it's about 50% for oil and gas and we should not forget that In your question at the end it's for oil and gas because these countries produce both So and 50% of the mix and they're the two-degree scenario It's quite challenging to imagine that you will get to To reduce that very significantly, but even if that was the case and that happened in the past I think that investing counter cyclicality Is is definitely one of the of the answers to the question So so so you mean you mean the total will survive Of course Okay. Mr. Cooper. Yeah question of a lot of sloths He might one of his four points or five was renewable by biofuels What do you have in mind exactly? because The biofuels I know about which are Corn-based ethanol and power oil based fuels are terrible from a climate change point of view So what biofuels do you have in mind? No as a part of a solution the the one that actually we're talking About is really the current biofuels that are being produced because that's right that second generation Subgeneration biofuels remains extremely challenging from the technological technological point of view But I made that point because I think that's one of the areas where public policy Today is helping the case at least in terms of emissions Because and and we don't see that that often on other aspects There is some in energy efficiency where there are some Mandatory objectives that are imposed by public policy But for instance, we don't really see it on carbon pricing So I took the example of biofuels saying ah at least here. There is a level of incorporation which is made Mandatory and at the end which helps the case even though I agree that the impact in the future of additional Biofuels may remain quite limited at the scale of the challenge that we face Thank you very much. I will open the floor to the questions first. So don't Johnston my former boss Thank you very much, sir My name's on Johnston and I was the secretary general of the OECD from 1969-2006 I had the pleasure of actually having And the bulletin a car our chairman is one of our first class Directors in the organization Well, I'm not close enough to the mic But I just wanted to make a few observations I've been following this dossier for a long time. In fact, I chaired this I think it was in Doha for you you were then with total were you not and total you made a very impressive presentation as you have I think total is actually probably quite exceptional in many respects But you know, we're really talking here I don't want to sound cynical, but I've heard the story so often so long going right back to 1992 there's Rio and then I came to the OECD and 97 was the big year That was the year of ungas, you know, the United Nations in general session in New York Which which I addressed to be heard all the terrible things that we were going to cure in the next few years We had Kyoto For other countries undertook, you know, and we had addicts and non addicts and Canada, for example We undertook to reduce its its emissions to 1990 levels, you know, it was something like 100% in 2010 it abandoned Kyoto because it increased by 25% And we've seen this right across the board. So, you know, really what I'd just like to say is when you get out of the discussion here You're talking you're talking mitigation That means we're trying to reduce the greenhouse gas emissions, which we've been uniquely unsuccessful in doing or Adaptation I don't hear enough about adaptation. I mean the fact of matter is look at the world today Look around what's happening The forest fires in the rest of the United States in Canada in northern Sweden above the Arctic Circle the temperatures and so on So I think you have to think in those terms. I'd like to see you talk more about adaptation less about Try to meet these targets. Finally, it's that that the people start discussing about adaptation just as you said. Yes, that's true, please Wait a minute. Push now. Okay. Yeah, we spoke quite a lot about long-term being on the market. I'm more a short-term minded and being short-term minded, I would like to have your views about The future of our different commodity prices, of course, I understand Mrs. Benelli doesn't represent our Ramco, but I would like to know how much oil So Saudi Ramco and Saudi Arabia can pump more in the short term Can we can can we reach $100 per barrel or perhaps more? You spoke we spoke much for of course about the price of oil But I'm also struck by the price of natural gas natural gas prices have been I've never been so high since the Fukushima crisis and It's really a long-term trend with Ladislas we spoke about the commoditization of the LNG market What's your view in the future? And by the way, it was said by Mrs. Benelli The price of coal is Pretty high and the demand for coal beat a steam coal or cooking coal is Pretty high. So we are dreaming about Renewables, but on a short-term basis. We are really with almost an energy crisis For the question, yes, please go ahead As we are in Morocco, I would like to say that What was mentioned during the debate that here we can confirm What we lived in this country, especially with renewables. You heard Mr. Bakuri during the lunch, but The price that we reach on the project on wind is 3 cents per kilowatt hour 4 cents for PV It's big power plants produced by private companies and selling to this price Add to it to the utility So it's true We are working to have 52% of our electricity capacity in 2030 from renewables It's possible because they have anti-connections in Spain with Algeria soon with Portugal and Mauritania It's also possible because we have water pumping for storage We have also melting salt for storage in Marzazette and also batteries We're talking about big projects, but don't forget especially for Africa. How small project? PV roofs PV pumping can be used in the whole continent and It's something that is as important as big power plants But there's also these solutions that can be also something important last point I'm hitting the moroccan agency for energy efficiency and I think the cheapest way the fastest way of reaching this climate in this is It's true energy efficiency We should work on energy efficiency in industry transport housing public lighting agriculture in all those sectors We have programmed for that. So that's also as important as the big programs. That's my observation. Thank you Thank you. Are you from Massen? Amé is the other agency in charge of energy efficiency We have two agencies in our energy transition policies Massen for the big power plants with renewables and Amé is the working agency for energy efficiency Yeah, because Mr. Makuri mentioned about Makuri mentioned about this sustainable energy transmission project with the European Union Germany or France or Portugal, but it's very interesting initiative of Morocco Please go ahead I'm John Little bull former president of Shania marketing. So I will advocate a little bit for gas on the short term I don't fully agree which we what has been said just now The price of gas in the United States, it's three dollar per million BTU. Yeah, so it's very cheap And we've the startup of the LNG export out of the US and with the Commitization of LNG. I don't believe that the price of gas will go up It's true that in Asia and in Europe with the price of gas Index on oil there could be some time where these prices will remain high But in my mind, it's very temporarily in my mind So and and within the next two or three years there will be plenty of new liquid-action project in the US which will help the gas prices to become more and more a commodity price with a world price more more and more on the longer term First of all, I'm not sure to fully understand Your Mr. Tanaka your guess your curve on the coast of wind In my mind, I'm not sure that this cost will go down So so fast and as of as a matter of fact today All the renewable prices are still highly subsidized especially in Europe On on always on the long term if you don't build Additional nuke power plant in the world. The numbers do not square without high development of natural gas They just do not fly So I'm not sure to understand your curve where there is a peak gas in 2035 and I'm not sure to understand that On the storage of electricity and this has been stressed by Mr. Cooper Battery everybody insists about battery. I highly believe in the future of hydrogen and You can produce hydrogen We've electricity Outside the peak hours. So practically the cost of producing hydrogen can be negative or almost zero You can use hydrogen in the fuel cell even in the car Somebody has said that in the car for the mobility you will still need battery. It's not of use in my mind you have a lot of technology of Power to gas to use electricity to produce hydrogen and this in and then inject hydrogen Into the network of natural gas So you have still plenty of technology which are under development and which allow natural gas to Increase its market share even if The renewables are seen as a solution for everything Thank you for your question to my Sinemis chart. Yes the 20 30 peak over gas is Still that chart the gas is increasing even with the sustainable development scenario for 50 scenario Or you peek out very quickly around 2020 get cold much earlier, but gas will continue to grow until 2030 or 2040 Yeah, so but but but slowing down if Sustainable scenario or two degrees Celsius or 1.5 happens because it's still carbon Emission happens. By the way It's we have 10 minutes more So that's I'll give the floor to the panelist to answer some of the questions about price or some of the questions about Gas row Oribid let's start a Few comments and I would like to develop a little bit the issue of the Oil embargo to Iran, which is a short term issue first clearly Mitty adaptation was part of the Kyoto protocol and in the following cops It almost disappeared and now as you said it is quite difficult to cope with two degrees or 1.5 And then it's very important to consider Consider adaptation and I just I understand that it will be one important part of The next cop in Poland. It's clear that they will not discuss a lot of they will not push the The theme of mitigation, but I think it will be it's a good news Second part was what struck me when we discuss about energy is that I remind that electricity Represent 20 percent of the problem, but 95 percent of the comments and when we discuss about Renewable energy we discuss about solar and wind, but in fact, don't forget that 80 percent of the final energy consumption is non-electricity So a few words on the embargo the oil embargo on Iran is One of the one important explanation of the II price now because the thanks to the Decision taken by OPEC plus two years ago. The market is now almost stable in good balance But on the top of that there is this decision of Trump to set up an embargo against against Iran in fact the spare capacity the stocks are at Low level worldwide the spare capacity is not so high the official figures is 2.7 million Boris per day or 2.5 and Around 1.8 in Saudi Arabia and my experience at the IA is that Spear capacity where you don't know exactly when will you get when it will be possible to get this production it may take Three months six months or one year because it needs it's necessary to need it needs some investment so the What is for me the most challenging is the reaction of Iran To this position of the of a tramp and this may create a mess in the Golf in the person golf just I remember that the missiles of Iran have been tested on the straight of our moves and If there is anything which happened The it will be totally impossible to Load oil In the Gulf of in the Persian Gulf. I remind that the straight of our moves the Persian Gulf represent 20% of the world oil consumption and 25% of the LNG So this may it's not An increase of the prices Nobody knows at what level it may come we may come to $200 per barrel because there is no elasticity on the market and also this situation of Yeah that's The comments I wanted to make and I have very specific views on Iodgen I'm not a believer. I think I don't any is the question of religion Yeah, we are Japanese are very religious about hydrogen. Yes, Lila. Do you have comments on the stock? spare capacity Well, I mean here again first point I'm not been dated to talk about short-term markets and Saudi Arabia's production policy again Second point Olivier a pair has already made all the comments that need to be made about the spare capacity So thank you very much Olivier for Thank you so much. I mean he always saves me in those meetings No, but I mean on Gas I really want to because yes, we can be concerned about what is happening in the oil markets And I think there was a lot of work being done for to have to bring those 25 countries together in OPEC plus Alliance But there are also some concerns on the gas side because today in Europe I mean I agree with the points that was made on us But today in Europe gas prices are 3.5 million dollars per million be too higher than the same time last year We don't know what's what happened this winter We don't know if we're going to have a very colder winter that average or not. So These are also and in many of these countries. I mean gas prices are being now reformed and Linked to international gas prices as well. So that's that's also an aspect that I would just wanted to highlight as well in the meantime Thank you Ray that dr. Cooper Well, I address mainly long-term issues, but since Iran has been raised Don't you think that the Iranian problem in quotes will be solved by China? China could take Iranian oil it's substitutable for other kinds of oil and China could well set up a clearing arrangement, which did not use swift or the dollars US dollars at all and Chinese firms Operating in the US would have a problem like total would but there are Chinese firms that don't operate in the US at all so is Do you seriously think that Iran will not be able to export its 2 million barrels a day say what I can what I heard on the market recently is that The bank of Kundron Kundron Bank, which is more or less the only bank Which has a kind of monopoly of relationships between China and iron which is owned by CNP see as just finished accepting bills by iron paid either in euro or in new ones and It is said on the markets that for November There is no Iranian oil which has been bought either by CNP see or synopec That's a that's it. You know Even even the Chinese have problem with a that Right that you have you American have with the dollar May I remind you that it did cost ten billion dollars to be in Pippa Ibar Talking about November, that's just a week away. Yeah, I'm not talking about November. I'm talking about the next few years and Whatever happens in November as almost already happened But if I were advising the Chinese government, I could construct a scheme that did not use the US dollar nor would it involve synopec or a Yeah, CNP see because they both have business in North America at least in Canada But there's a way to do it and the question is how imaginative they and the Iranians together will be about Bringing it about and there are lots of two-way trade It's not just oil from Iran to China, but it's Chinese goods going to Iran And so you it it's basically barter with a little fluid to grease it basically I Think you European Union invited China to join that's clearing house. Is that right? I Have heard that but I don't know. Okay, let's move to Matsuda-san, Matsuda. Okay, just to make one one comment on renewable energy I think we talked a lot about the renewable energy and stories, but Obviously, we need second and third revolution technology and what we face about technical evolution is There's two type of death of valley death valley value of death one is a technical value of death to make new New technology to be able to be developed fully that's one and there's a lot of shortage of supply of financing one and second is Financial death of valley if though there is a demonstration plan to ready to go There's no one to invest and there's no way to commercialize so unless we are able to overcome all these value of death in technical development deployment We won't be able to have revolution, but otherwise We can have technical revolution which again completely rewrite the energy scene and I a world energy outlook could be very obsolete in a few years Unless they are able to do it and we have to do that That's my ending remark. Thank you. Thank you very much. You must have found that is left Maybe quick comments on the on the on the price I think short term there are definitely some supportive fundamentals for the al-pais because demand is still Significant opaque and Russia Well-lined then once very specific element with regard to the US where there are some bottlenecks of exporting Shell oil by pipe so Probably until the mid next year there will be some constraints on the on the US market exports reduced from Iran, of course, and don't forget Venezuela Libya, there are some countries which still Fits quite some difficulties not taking into account the fact that we have to keep in mind that the level of Investments that have been made in the oil and gas industry has decreased very significantly by 2014-15 when the oil price collapse and there are some impacts that are going to be associated with that So I think it's quite supportive on the on the on the short run Even though for me on the mid run or long term the keyword remains volatility Thank you very much everybody, and I really appreciate very your participation to the interesting game I raised and I hope everybody enjoyed the discussion here