At the beginning of the meeting, diplomas were awarded to fellows of the program for student’s support in the fields of energy and economics. Awards were given to students from the Saint Petersburg Mining Institute, the Saint Petersburg Marine Technical University, and the EUSP. After the official ceremony, Dr. Drebentsov gave a report on the prospective development of the global energy market leading up to 2035.
BP economists estimate that over the next two decades, the world economy will develop faster but the pace of growth for energy demand will slow, due largely to an increase in energy efficiency. As a result, market percentages of oil, which are considered to have peaked in the 1970s, will drop considerably. According to Drebentsov, oil will simply become too expensive. Following the increased importance of oil, the share of coal in the world energy market declined in the second half of the 20th century. However, with oil prices increasing, coal has begun to assume a more stable position, also due to industrialization in China. By 2035, China and India will consume about 64% of the world’s coal.
A growth in demand for gas is also expected. Already by 2035, all factors (oil, coal, and gas) will be approximately equal, and none of the three fuels will dominate. If coal has historically occupied a crucial role that was later overtaken by oil, by 2035 a balance will be established by distributing the percentage demand for oil, coal, and gas by about 27%.
Speaking about the expected global demand for gas, Drebentsov noted that China’s role would not be particularly noticeable until 2035. In China, the share of gas in the country’s energy market is currently only 4%. At the global level, it is primarily gas that will be necessary for the production of electricity, and to a lesser extent for industry. One of the largest exporters of gas will be the U.S. (shale gas will be about 20% of all gas produced in 2035). Dr. Drebentsov noted that major exporters of gas will be countries of the former Soviet Union, and major importers will be countries in the Asia-Pacific region. In addition, the gas market will be globalized thanks to the transportability of liquefied gas. North America will become energy independent (nonvolatile), and if it was previously expected that the U.S. would be a future importer of gas, it’s now thought that the country will become the second largest gas exporter. The United States is expected to export liquefied natural gas starting in 2016.
Vladimir Drebentsov also described the mechanism of mediated competition between the United States and Russia. With increasing gas production in the U.S., cheaper and less valuable coal will go to Europe and compete there with gas. In turn, Europe is stepping up coal imports, reducing gas imports from Russia. Domestic demand for gas in Russia itself will not grow, according to BP. If production is increased to find new market outlets, it’s possible that this will reduce the cost of gas.
Vladimir Drebentsov also noted that renewable energy sources would become even more widespread and possibly exceed the performance of nuclear power.
Speaking about the future of the energy market, Drebentsov noted that by 2035 there will be an increased demand for liquid hydrocarbons, whose consumption will grow from today’s 90 million barrels per day to 109 million barrels per day. The largest consumers will be China, India, Asia, and even the Middle East. This is explained by the fact that the car market will grow, mainly outside the OESD countries (in China and India). If the present number of cars in the world is 1.1 billion, by 2035 it will be about 2.3 billion.
The price of oil is at the level it is because OPEC wants it so, said Drebentsov, adding that current decade will be a challenge for OPEC. The production of nontraditional oil is growing rapidly, but this will not seriously affect prices. In the future OPEC will likely reduce oil extraction and exports.
Finally, Drebentsov turned his attention to the issue of carbon emissions. There are currently sufficient energy resources that will not soon be exhausted, but the question of ecology and climate remains. Emissions will continue to grow, and most likely by the middle of the century global warming will be observed. The growth rate of emissions will mainly be curbed by increasing energy efficiency (40%) and only 7% due to renewables, concluded Drebentsov.
Vladimir Drebentsov also presented at the EUSP in October 2013. He spoke about Russia’s standing in his survey of global energy markets.
Gevorg Avetikyan
