 So, thank you very much, Madame Ambassador, for introducing me. And very many thanks to CSIS colleagues, first of all, giving me the privilege to share with you some of our thoughts about the unconventional energy revolution, but at the same time, a big congratulations to CSIS for this excellent report, a must-read report, and a very professional presentation of that report, very impressive indeed. So thank you very much. And another thank you goes to the Norwegian colleagues here. Yesterday, I did enjoy a lot the Mr. Foreign Minister's speech, who was very precise, and to the point, as far as the global gas markets and the current challenges are concerned. What I will try to do is a bit different. I will first try to tell you a bit complementing what the CSIS colleagues did, the importance of shale oil and gas, but I thought it might be a better idea to put some cautionary questions here and there about the perception of the shale oil and shale gas here in this very country and beyond. So let me start by, before looking at the future, today, where we are in terms of the energy. Now as a result of two major drivers, we are seeing a major change in the global energy scene. By far the most important one is, of course, the unconventional energy revolution that we will discuss in a moment, but at the same time, there is another one we shouldn't forget, the after Fukushima, some countries change their nuclear policies, which also has effects on the gas markets, coal markets, carbon dioxide emissions, and beyond. But as a result of that, we see a completely new energy movie. And in that movie, some of the actors who has very established roles in those movies are changing their roles. What are those? For example, some countries in that energy movie had the role of being a major energy importer and affecting the markets as such are now changing the role and becoming energy exporters, such as, of course, the United States, a major change, a huge change. For instance, there are some countries, it goes unnoticed sometimes, who have the role of in the energy movie, global energy movie, being energy exporters and affecting the markets as such are now, at the same time, becoming major energy consumers, such as the Middle East countries. When you look at the last five years, ladies and gentlemen, Middle East countries were second to China only in terms of their contribution to the global oil demand growth. About one-third of the global oil demand growth came from Middle East, just second to China. They are therefore having a double role. One is export and providing oil and gas to the markets. But at the same time, they themselves are becoming major consumers. Third change, trade patterns, energy trade patterns changing. And the first of all is the oil trade center is shifting from Pacific to Atlantic and it is happening very, very fast. Or some countries are looking at the different directions. Let me take Canada as an example. Until recently, and we have colleagues from Canada here, until recently the life for Canadians were very comfortable. They produced oil and gas, sent it to Sa'at, got the cash and enjoyed life. But now it is changing. Sa'at, they do not need so much Canadian oil anymore, they will get some. But huge Canadian oil and gas resources have to go somewhere and therefore Canada is turning its face to Asia, a very definite destination. Look at the Canadian government's website. How many times Canadian governments, the head of the government ministers are visiting which country and you will see a big portion of the visits to Asia in order to build this new trade linkage. So these things are changing and as I said the major driver here is the unconventional energy revolution. But there are certain things which are not changing and which I would like to see personally changing. What are those? First of all, carbon dioxide emissions, major cause for climate change is increasing steadily and puts the world in an unsustainable path. And energy is at the heart of it. About three-fourth of the emissions which cause climate change come from the energy sector. So without solving the energy sector, we have no chance whatsoever to address the climate change problem. Second, in many countries in the world, fossil fuel prices, the consumption at the pump or at the burning stations are heavily subsidized. They are extremely cheap, much cheaper than their own value and as a result of that people use it in a wasteful manner. If something is much cheaper than it is normal value, we human beings tend to use it in a wasteful manner, not a careful way. If I have a tire of five dollars, I can have my lunch comfortably, but if the tire is five hundred dollars, I am much more careful with how am I eating my lunch. So therefore, it is very important the value of the energy and it is undervalued that it gives a wasteful use of energy in many countries, especially in the emerging countries. And third issue, it may not be very much at the focus of your attention now, but I will still insist to bring to your attention today 1.3 billion people, about 20 percent of global population, they have no electricity. In sub-Saharan Africa, India, Pakistan and Bangladesh, main countries. And this energy issue, but maybe beyond the economic issue, security issue and perhaps most importantly, a moral issue, I believe. Now, I finished the current picture by telling you one last item about the energy prices. Many of us perhaps don't notice it very clearly, but since three years, we have oil prices averaging 100 dollars. It has never been the case in the history. Three years, 100 dollars of oil prices and looking at the increasing cost of production, looking at the difficulties some countries are facing, producing countries and looking at the increasing complexity of the fields, I do not see major chances that the prices will go back to the levels we have seen in 50, 60 dollars several years ago in a sustained period of time. And the second point on the prices is something very new and critically important, namely, in the world. Natural gas and electricity prices in different regions are diverging from each other, different prices in different regions with major consequences that I will share with you in a minute. Now about the fuels, which fuels are going to win, which fuels are going to lose? Now since we have Norwegian colleagues here, again going to the Norwegian example, in 1987 a very distinguished Norwegian Prime Minister, Mrs. Brutland, made a report at the request of the UN Secretary of General about the sustainable development, brought the sustainable development context for the first time in a powerful way. And then since then, the world tries to reduce the share of fossil fuels in the global energy mix because they are, among other things, they are having environmental implications. And since 25 years, the world is trying to put new policies on renewables and efficiencies and this and that to bring the share of fossil fuels down. And when this effort started 25 years ago, share of fossil fuels in the global energy mix was 82 percent, 82. And after 25 years of efforts worldwide, government spending so much money, efforts, programs, meetings, presentations, et cetera, today, that 82 percent today came down to 82 percent. No change whatsoever. This shows us something, ladies and gentlemen. Economic facts are stubborn. We may have government intentions, we may have statements, we may have goals, but if they are not backed up with economic facts and changing economic instruments, they do not have major sustained implications for the markets. And when we look at the future, we expect, although renewable energies will increase their shares mainly as a result of current government subsidies, which may also change, fossil fuels, especially natural gas, will be the winners and we will have a fossil fuel-dominated future for the next 25 years. Now coming to the United States, we have seen, of course, a major growth in shale gas in a less than a decade, about 250 BCM, huge growth, and which is equal to the current production of Qatar, Kuwait, UAE, and Iraq put together. Or in other terms, another AAA-rated supplier, Norway, two and a half times of Norway, in less than one decade of time, the production level. An impressive result. It's a big revolution and we all have to be very happy with that. The same with oil, more than three million dollars per day, close to 3.5, is because Iraq today, a major, very important producer. This is definitely something that the Americans have to be proud of. And we, as the International Energy Agency think, this provides a major contribution to global energy security and the prosperity of the world, and as such, this is a major achievement. However, having said that, I think we may need to put this in a context. First of all, in terms of oil, let me start with oil. Many colleagues in the United States talk about the self-sufficiency being independent in terms of oil, and I will talk about the oil imports shrinking. This is a very good news. We think that the oil imports in the United States will shrink substantially, maybe go to zero very soon, and the U.S. may not need to import any more oil or just very little in the next years to come. To think that this is only, this success story is only as a result of increase in the oil shale, pardon, shale oil, is completely wrong, completely wrong. It is only one part of the equation. There is also factors which do contribute to lower the domestic consumption, the demand. Therefore, it's a combination of two things. One, the production goes up, shale oil, but at the same time, consumption comes down because of the new efficiency standards set by the current administration for cars and trucks. This is important to understand, I believe, because if we give only the importance to the increase in the production, we may forget that we also owe the achievement also to the demand-side measures improving efficiency and other measures. I believe this is an important reminder, and therefore, we shouldn't be only happy to see the production growth, but also should be happy with the good results coming from the stringent fuel economy standards set recently. The second point I think we may need to be careful is about the role of the Middle East. Now, when we look at the oil markets, we see in the next 20 years two chapters of a story. In the next 10 years, U.S. oil production will increase, continue to increase, but then come to a certain plateau, flatten out, and this is still a very good news for us, for everybody in the world. Why? Because United States is not, as I mentioned before, will not import a lot of oil at all, and it will be a sufficient country making steps there. And the fact is, after 2020, especially from Middle East, we need to see production growth. In terms of demand, there is a world beyond the United States and mainly Asia. Middle East's importance is, I completely agree with this year's report. It is not only the sea lanes issue, which is very true, but at the same time, who is going to meet the demand growth in Asia, which is 14 million dollars per day coming? Plus, the fields are like human beings. A field, we have many colleagues here who know better than me, fields go up, they are very productive in the beginning, they come to a certain peak, and afterwards they decline. Many fields are declining today. So we have to also bring new oil in the markets in order to compensate the decline, plus to meet the growth in the demand, which is basically coming from Asia. And there is one single most important region in the world in terms of resource ownership and in terms of the economics of production, which is Middle East. If we do not give the right signals to Middle East in terms of investments today, we may well be in difficulty in 2020s, and we may well see pressure on the oil prices at that time if the production growth from Middle East does not come true. And therefore, I think it is very important to understand that we, meaning the world, does need, we do need Middle East today and also in the future. A few things on the gas markets. Today, we have an extraordinary situation. Extraordinary situation. We have never seen this before. What is that? Today, the European gas prices are three times more expensive than the United States, and in Japan, it is about five times higher. And this is extraordinary. We have not seen this before. And there is no single other commodity as important as this, where you see such price differences. But I think more important than this is that we believe that in the next years to come, even we may see some increase in the U.S. gas prices, there will be at least 10, 15 years. There will be substantial differences between the natural gas prices in the different regions. And this will have major implications for everybody. One of the implications is on the industry. Every industry, when they manufacture something, produce something, they use energy. But some industries use much more energy than the others. And the cost of energy in those industries is much higher than the other costs. Because you have a cost of energy, you have a cost of labor, you have a cost of capital. If the cost of energy is important in a given country, and if the energy prices are high, then these companies will be in difficulty, such as the case now in Europe and in Japan. I can tell you that in Europe, many companies today, especially petrochemical, iron steel, aluminum, cement, paper and pulp, they are in major difficulties because the natural gas prices and electricity prices are significantly higher than their competitors. They are losing export, market share vis-a-vis U.S. companies and vis-a-vis Middle East companies. And this is something which is a good news for the United States. Even I believe if the U.S. gas prices go a bit up, this will be still very advantageous for the United States. And the U.S. may well see a major competitive advantage vis-a-vis other countries in the next years to come. Now from this issue, let me come to an issue that I really want to bring to your attention, namely the issue of climate change and the share gas evolution. Now as you know, until recently, the United States was the largest emitter of the world, and recently, five years ago, overtaken by China and the United States number two now. Until 2007, we have seen the U.S. emissions were increasing significantly. But after that, when share gas started to replace coal, we have seen that there is a significant decline. This is, ladies and gentlemen, a very good news for the climate change community, a good news that we have not received many, many years, a major downturn. And this is a success as a result of the technology and the policies supporting that. However, as you may see, I have a lot of however's and buts today. And another, however, is that in 2013, we saw the trend is going back. Emissions are increasing. Why? Because this gas was replacing coal. Why Americans started to use a lot of share gas? Because Americans love environment more than Norwegians? No, I don't think so. Because Americans are very keen to use modern technologies. I don't think so. The only reason, because the gas was cheaper than coal. Very simple. But now, with the gas prices increasing, coal prices being moderate, the coalhead advantages, and we have seen 2013, coal to make a comeback. Why I am saying this is that if in the United States, if we want to see emissions to be under check, it is very important to look at the future of coal-fired power plants and take the necessary measures if needed. Again, in the context of climate change, I wanted to address one issue that Americans discuss a lot, or the Europeans discuss from Americans' point of view. Many American colleagues I met have a guilt feeling. They feel guilty for one reason, at least. Namely, they say that we now have a lot of coal, and we export this coal to Europe and other countries. And in Europe, the coal prices collapse, and the Europe uses a lot of coal because of what happened here. And as a result of that, COT emissions will increase in Europe. This is the general theory. But it is true that in Europe, the coal consumption is growing very, very strongly now, but this is almost nothing to do with the United States. So don't feel guilty, and I will help you. So in the last few years, when you look at the growth of exports from United States, it is very, very small, and even smaller than an increase coming from Australia. The biggest increase came from Indonesia. Who floated the markets was Indonesia, and the contribution of US exports to the global coal exports was less than 10%, 7%, peanuts. So you don't need to feel guilty about this. This is coming from other countries, and as a result of this, what happened is that four or five years ago, the coal prices were about $110, and today they are $75. There is a big drop in the coal prices, but this has very little to do with the United States. The production is coming from elsewhere. And second, most important, here is China. You know China is a coal country. China's coal growth was going very strongly, but in the last two years, we have seen a big change in the coal consumption trend, and we have seen a slow down of the Chinese coal consumption, a big change. And this difference between the historical trend and the current consumption of China is about 20 times of the US exports. So just to put it in context, this is one of the reasons why we have seen coal prices went down and the people went for coal in Europe and elsewhere, and the US exports has very little to do with this. Let me finish my presentation about the topic which is discussed out, about the LNG and the role of the United States. Now United States, LNG, everybody, I can tell you, is talking about it in Europe, in Asia, and they say it will be very, very nice if the US was to export LNG here in Europe, especially given the recent developments. I would say, first of all, from an energy security point of view, this will be extremely important and extremely positive. Gas security point of view, it's excellent. However, again, however, I do not think that it will, as our European colleagues hope, it will not bring the gas prices at the level even close to the US levels. Why? For the following reasons, very simple. Today, natural gas prices in the United States is about four dollars and in Europe it is about eleven dollars. Four here, eleven in Europe. To bring gas from US to Europe, gasification, liquefaction, transportation is about six dollars. So four plus six is ten and in Europe it's already eleven. It will provide, of course, flexibility. It will provide a room for negotiation for the importers with every major exporters when they negotiate the Europeans, they fit the truth. It will enhance the energy security and provide diversification, but no hope to see prices which are even close to the US prices because of this cost of transportation. Just to give you one number, the same energy content of gas and oil to transport natural gas is seven times more expensive than transporting oil. This is a major issue for natural gas and therefore we should be very careful to hope for a one or convergence of gas prices internationally. And the US will always have the close advantage for many years to come. So let me finish my words by trying to put my thoughts together. The share revolution is having a unique, a major impact on the global energy landscape, on the economy and the geopolitics. The CSES report gave us very good hints in that direction. And for me, we can only compare in the last 30, 40 years. This effect may be with the introduction of nuclear power in the early 70s, if not stronger. Second, we think US natural gas prices may increase from the current levels a bit because there are several challenges from the complexity of the fields and increasing environmental obligations just a bit. But still there will be substantial differences between US versus Asia, US versus Europe for many years to come. Therefore, the difference in the price is not a one-off issue. This is a structural issue. Therefore, we have to take it as such. Third, please, please. It is very important that we make everybody understand that we need Middle East oil production growth. We shouldn't give the wrong signals to the producers. We need Middle East oil. If we need the Middle East oil growth in a few years of time, the production growth in a few years of time need to be, the projects need to be started now. Investment needs to be done now because you don't invest today and oil comes, flows tomorrow. There is a lead time there. Therefore, it is very important that we all understand. The numbers are there. Middle East is the only region that can provide a lot of oil to the major consumer regions such as Asia. Another point that I thought, again, a cautionary, a friendly remark here. We are all very happy in the United States and elsewhere because of the shale gas and the shale oil, but we shouldn't forget the importance of energy efficiency, nuclear power, and clean coal technologies. They all have their stakes. They all have their role. If you forget their role to help us to provide diversification in the energy mix to reduce the carbon dioxide emissions and to provide room for more exports from the United States, this is completely important, and this shouldn't be forgotten as well. And finally, United States went from a psychology, energy psychology from scarcity, meaning a major importer to a now country with a resource-rich country. How the United States will formulate, will adapt its energy strategy, and foreign policy is extremely important from a global energy security point of view. And how this question will be answered will have ramifications, of course, for the United States, for the allies of the United States, and for the rest of the world. And we, as the International Energy Agency, is at the disposal of the U.S. government to help them to shape their strategy. Thank you very much for your attention. Thank you. So, if you have questions, I will be very able to take them. Yes, sir? Yes, sir. I'll take this, please. Charles Ebinger from Brookings. Good to see you, Fatih. How much is the difference in the gas price in Norway and the Netherlands attributable to taxes by the two respective governments rather than actually the market price of producing it? Thank you. Yes, please. Ken Mayer, Court of World Oaks. In a few minutes, the EIA will announce the current status of our natural gas working storage. And I suspect they will announce that we are continuing to draw it down as we have done all winter. This especially cold winter resulting in the storage being less than 50% of what it usually is. At least one of our public utilities' first energy has been told there won't be gas to run their gas-powered electric plants this summer because the gas has to go back into working storage in preparation for next winter. So, one of our previous speakers predicted that the United States would become a net exporter of natural gas soon, unless by soon she met never. I don't understand the grounds for optimism, especially at a time when we're still importing about 10% of our consumption from Canada. You seem to think we're going to become a net exporter with your discussion of the effect of our exports on world gas prices. What's the grounds for your optimism? Yes, sir. Equality. Yes, please. Thank you very much. My name is Shinichi Sobe, CSIS from JETRO. My question is about the future of automotive markets. There are so many new technologies coming into market like electric vehicle, biofuel, natural gas vehicle, fuel cell. Which technology do you see the most promising or still the gasoline vehicle is dominant power? Thank you very much. I take this one to this round and then make a second round. Thank you for comprehensive and complex presentation. My question is about the Middle East. The Middle East is a consumer. The Middle East is a consumer of natural gas. I'd like your thoughts on the prices of natural gas to consumers in the Middle East itself as compared to United States, Europe, Japan. Thank you. Okay, let me take this first. In terms of the U.S. becoming, then I'll come to the novia question, U.S. becoming an exporter or not. I think U.S. will be a net exporter sometime within five years of time if the numbers, what we have, if the data we have is right. And I don't see any difficulty in terms of resource space, in terms of the capital, in terms of policies, government policies as much as we are informed that the U.S. may export about 70 BCM, which is a significant amount of gas. And I believe a big portion of this gas may go to Asia Pacific, which is already, some of them are already contracted. And as such, it will be a big help for the global gas markets. However, again, even in the most optimistic scenario of the U.S. colleagues making here, U.S. will never be the largest exporter of the world. According to our numbers, Russia will remain, Israel will remain the largest gas exporter for many years to come. So what U.S. will do, what U.S. will help, U.S. gas is diversification, making the hands of the importer stronger and you have a new option there, which is definitely very helpful. But given the distances and the amount of gas which could come from United States may not revolutionize the markets, as some of us expect, but it would also help to improve the hands of the importers. But we expect, within five years of time, U.S. to be starting to export. Now government taking Norway versus Netherlands. We have Norwegian colleagues here. Every country has its own resources. Every country has its own policies. And in some countries, the resources are run by the, owned by the national companies. In some countries, it is by the private companies. Therefore, it changes the taxing policies, changes from company to company. And to be honest with you, this gives me an opportunity to tell one other advantage of the U.S. gas and oil production growth. Today, I don't know if we are aware, about 80% of the remaining reserves are in the hands of the national oil companies. And more than two-thirds of the gas reserves are in the hands of the national oil companies. The role for markets or market mechanisms are getting less and less in many cases. Of course, there are some national oil companies like Stutt Oil, which is a triple-R rated company, but not all of them are like Stutt Oil. Now, automotive industry. There is a big, as you rightly pointed out, a search for the new technology. The internal combustion engines today, the cars we are driving today, or you are driving today, it's about 99% total cars, okay? And there is an interest in the electric cars, fuel cells, biofuels, different things. And they are driven by two things. One, the oil price, I said $100, and it will be still costly. Second, the carbon dioxide emissions. Now, I think in the next 10 years something will happen, but I don't know what. This is like a pregnant lady. There will be a child, but we don't say boy or girl. There will be something coming out. It is either electric car or the biofuels or the fuel cells. This will depend on the government policies. But the current policies, I tell you, I am not very hopeful about electric cars. The current policies and current challenges. What we have done is that we have looked at every government's target today. China, U.S., France, Germany, Japan, electric cars, their targets for 2020. And it is very if they reached those targets, but let's assume they reached those targets. Even if they reached those targets in 2020, the electric cars share in the total car fleet will be less than 1% still, very, very modest. Middle East. Yes, in Middle East, both oil and gas consumption is skyrocketing. And there are three drivers, economic growth, population growth, and heavily subsidized prices. And it gives very, very wrong signals, to be honest with you. For example, in one major Middle East country, we use about 1 million dollars per day for electricity generation. This is economically criminal to use oil for electricity generation from an economic point of view. It is like using a Chanel perfume to fuel your car. It is in the same economic value, to be honest with you. So therefore, there is a need to reform the prices. This is the number one, very number one issue. In some countries in Middle East, there are very well intended programs to push the renewables, especially solar energy. But you cannot at the same time bring the price of fossil fuels down very low and to hope to see the renewables, which are already having cost difficulties, cost challenges to get a market share. And this is happening. In terms of natural gas prices, they are extremely low, which doesn't give any incentive in many cases to develop gas markets. So for Middle East, for me, the key issue today in terms of energy sector is the price reform of the domestic energy prices. Otherwise, they are not only jeopardizing their export revenues, which is crucial for the economies, but at the same time giving wrong signals to the energy infrastructure developments. Do we have... We don't... If you have a very short question, please go ahead. Okay, but I have to get from Frank as well, so he's a good friend of mine. What are your major points at the beginning which you didn't address was that 1.3 billion people do not have access to electricity, which to this old engineer is a late 19th century technology. Yet in sub-Saharan Africa, 72% of the population has a cell phone and 27% has electricity, which is cell phones by entrepreneurs, electricity by governments. Do you think that leads to a conclusion? Frank? Thanks, Patti. And thank you for a wonderful presentation. I and I have already decided there's at least a half dozen year slides that we will use again with attribution. My question is just so we don't leave this group with a misinformed impression, you talk about, I'm assuming, net self-sufficiency in the United States, because quality counts too. And we may export a lot of light, but still bring in other kinds of oil to meet refineries. Exactly. Easy question, easy answer. Thank you very much. The other question is, it's a... I should put it this way. I'll give you one number. There is one country in Africa which has a population of about 170 million. And this country exports oil and gas since a long time. And out of 170 million people, about 89 or 90 million people have no electricity. And we have calculated the following. If this government of that very country would have spent some part of the oil and gas revenues for building power plants, this problem would have been solved. And I will tell you what this some part means. It is not 20%. It's not 10%. It is not 5%. If that government would have spent only 0.6% of the oil and gas export revenues in that country, that 90 million people would have access to electricity. This is definitely, among other things, a governance issue in Africa. And this year, we are in the IEA when we make the virtual reality. Madame Ambassador mentioned the virtual reality we make every year. We focus on one country or a region. And this year, we are focusing on Africa. We're in all the African countries and one of the issues is this issue. And I am very happy that this coincides in a time that the United States government is also pushing the agenda of powering Africa. And we will put the, hopefully, synergies together and provide some good advice for the African governments there for oil, gas revenue management, but also electricity market reforms. With this, I would like to thank all of you and congratulate once again the colleagues at the CICS for this excellent work done. Thank you very much. Thank you.