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An Atlantic Basin Energy System?

An Atlantic Basin Energy System?. Paul Isbell Calouste Gulbenkian Fellow Center for Transatlantic Relations Johns Hopkins University School for Advanced International Studies (SAIS ) September 12, 2012. Formation of an Atlantic Basin Energy System (ABES) Why Energy and the Atlantic?

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An Atlantic Basin Energy System?

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  1. An Atlantic Basin Energy System? Paul Isbell CalousteGulbenkian Fellow Center for Transatlantic Relations Johns Hopkins University School for Advanced International Studies (SAIS) September 12, 2012

  2. Formation of an Atlantic Basin Energy System (ABES) • Why Energy and the Atlantic? • Pre-conditions for the formation of ABES • Remaining Barriers • Policy Implications

  3. The Importance of Atlantic Energy • From the end of the Cold War to the rise of China and the BRICS: the “forgotten” Atlantic • Shifting pattern of US oil import dependence • Traditional: Middle East, Persian Gulf, Saudi Arabia • New rivals to Saudi Arabia and the Arab World (7 of top 10 national suppliers from the Atlantic Basin) • Proliferation of suppliers large enough to negatively impact security of US oil supply • Increasing specific mass of the Atlantic Basin in the broad global energy system – geopolitical implications: the return of a new Atlantic?

  4. Geography of Top 10 Oil Sources • Atlantic Basin • Canada (1) • Mexico (2) • Nigeria (4) • Venezuela (5) • Colombia (8) • Angola (9) • Brazil (10) • Broader Middle East • Saudi Arabia (3) • Iraq (6) • Algeria (7) Atlantic sources will grow in the future, while others could slide. Ecuador is 11th, Congo (Bzza) 14th, Cameroon 15th

  5. Pre-conditions for an ABES • Dynamic basin energy demand • Dynamic basin energy supply • Sufficient basin autonomy • Intra-basin complementarity

  6. Dynamic Atlantic Basin Demand • Approximately 40% of world demand • Northern Atlantic demand flat to 2050 • Southern Atlantic demand in line with the rest of the world • Southern Atlantic’s share of global energy demand set to double to around 20% by 2050. • Atlantic demand will be outstripped by the rest of the world, but Atlantic supply is set to boom

  7. Atlantic vs World Demand to 2050 Source: Global Energy Assessment, IIASA

  8. Northern vs Southern Atlantic Demand to 2050 Source: Global Energy Assessment, IIASA

  9. Dynamic Atlantic Basin Supply • Boom in Atlantic energy supply • Oil (over 1/3 of global production, over 40% of global reserves) • New players: Brazil, Guyana Basin, Atlantic Africa • Traditional players with enlarged reserves: Canada, Venezuela • Gas (over 1/3 of global gas and LNG production; 12% of conventional reserves, but over 60% of shale reserves – four of the five largest shale reserves in the Atlantic Basin) • Renewables (over four-fifths of global installed capacity and biofuels production)

  10. Sufficient Basin Autonomy • Over a quarter of world oil trade • Only 15% extra-basin oil dependence • 30% of global LNG trade • Only 6% extra-basin gas dependence (concentrated in EU dependence on Russia) • Over 80% of global biofuels trade

  11. Intra-Atlantic Basin Oil Trade • Center for Transatlantic Relations • Source: BP Statistical Review of World Energy 2011. Elaborated by the Center for Transatlantic Relations, Johns Hopkins SAIS

  12. Center for Transatlantic Relations

  13. Intra-Basin Complementarity • Traditional complementarity between North and South (northern investment in southern supply for importation) • Emerging complementarity in the southern Atlantic • Southern Cone shale gas with South African gas-to-liquids • Brazilian biofuels collaborations with West Africa • Others: LNG trade, petroleum products markets, northern investment in southern renewables

  14. Barriers and Other External Factors • Financial instability in the Northern Atlantic • Price environment (fossil fuel subsidies, global oil prices, the price of carbon) providing a partial, but insufficient driver of low-carbon energy • Insufficient policy and regulatory environments around the basin (energy nationalism) • Lack of diplomatic structure in the Basin

  15. Pre-conditions and Barriers Pre-conditions for the Emergence of an Atlantic Basin Energy System Source: own elaboration.

  16. Policy Implications • Energy Security • Middle East and Central Asia • China and East Asia • Broader Atlantic Integration: Sustainable Development and Climate Change • Atlantic Basin Consciousness and Atlantic Institutions • Reconfiguration of the Atlantic – renewal of the West

  17. Supporting Graphs

  18. Atlantic Basin Petroleum Production in the World, 1980-2009 Source: EIA and own elaboration.

  19. Atlantic Basin Petroleum Consumption in the World, 1980-2009 Source: EIA and own elaboration.

  20. Atlantic Basin Petroleum Reserves (without Venezuela’s super-heavy oil) 1980-2010 Source: EIA and own elaboration.

  21. Atlantic Basin Natural Gas Reserves (pre-shale revolution) in the World (trillion cubic feet) Source: EIA and own elaboration.

  22. Atlantic Basin Gas Consumption in the World (trillion cubic feet annually) 1980-2009 Source: EIA and own elaboration.

  23. Assessed Global Shale Gas Resources, 2011 Source: EIA

  24. Global Shale Gas Resources, “technically recoverable” reserves by country (tcf), 2011

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