Beruflich Dokumente
Kultur Dokumente
Jorge Ferioli
Chair, Programme Committee
Marie-Jos Nadeau
Vice Chair, Communications & Outreach Committee
Abubakar Sambo
Vice Chair, Africa
Johannes Teyssen
Vice Chair, Europe
Zhang Guobao
Vice Chair, Asia
Christoph Frei
Secretary General
Logistics Bottlenecks World Energy Council
Contents
Executive Summary
Many of the vulnerabilities to Energy Access, To better identify and assess possible logistics
Energy Security, and Environmental Sustainability bottlenecks, a Logistics Bottlenecks Matrix was
result from impediments to reaching a global constructed, showing major bottlenecks across the
demandsupply balance, as well as local balances, energy value chain on one axis (from the
for various energy sources and carriers. manufacturing of equipment through mining and
Vulnerabilities result from multiple reasons: extraction to transportation and consumption) and
regional imbalances of energy production and types of fuels/electricity on the other axis.
consumption, the bulky character of the majority of
energy fuels, the virtual necessity of electricity Having prioritized energy sources and their
consumption following its production, among imbalances, as well as having outlined major
others. sources of possible imbalances, three crucial
bottlenecks were identifiedoil movement, natural
To detect and prioritize respective bottlenecks gas and liquefied natural gas (LNG) movement,
across energy carriers, they have to be measured. and electricity movement. Should they not be
In this report, production, consumption, exports, managed in 2020 and 2050 (i.e., if required energy
and imports were measured across all major sources and carriers are not delivered from
energy carriers for seven key regions of the world producers to consumers), enormous damage will
for three time frames2008, 2020, and 2050. be done to the global economy, the full extent of
Imbalances between production and consumption which is currently immeasurable.
form bottlenecks in each region.
To manage expected key bottlenecks, significant
From the logistics point of view, the most important infrastructure investments need to be made. To
types of fuel are those biggest volumes that must develop the required oil pipeline and tanker
be transported over large distances. If fuels are networks, gas pipelines and LNG carriers systems,
ranked on that criterion, the winners are coal, oil, as well as smart grids boosting the efficiency of
and gas. Although people are slowly turning to electricity distribution, a total amount of about USD
alternative energy sourcessuch as biofuels and 900 billion will have to be spent in the 20082050
nuclear energyeven in 2050, those three fuels in time frame, signifying average annual outlays of
terms of total volume will dominate without USD 21.4 billion.
question.
Moreover, required policies and concrete actions
Another challenge is electricity transportation. for world leaders are described. These actions will
Electricity must be consumed at its source or sent allow for timely investments in the respective
along a transmission-and-distribution network right infrastructures and build bridges between the
after its production, as storage is inefficient. To private and public sectors in various regions, so
make things more complicated, transmission itself that the money which needs to be spent is spent
is inefficient over long distances, necessitating effectively, generating desired results for
production facilities close to end-users. companies, governments, and society.
Logistics Bottlenecks World Energy Council
Introduction
1. E
Enerrgy ccap
pabillitiess an
nd
re
equirem
ments inn the mid-
m
and long
l g-term
A moodel was creaated to allow the measure ement of A mix of datta sources [m model used in EPS 2050
expeccted energy capabilities anda requirem ments of f the Lion (hhigh coopera
using data for ation and
majorr energy carrriers (oil, natural gas, LN G, integration, high governm ment involveement)
uranium, biomasss, biogas, and biofuels) a and the Scenario, BP Statistical Review of World
W Energyy,
moveement of elecctricity across s and throug
gh several relevant repports of the Innternational Energy
E Agenncy
regions (Figure 1) at relevant points in timme (2020 (IEA), amon ng others] waas used to de etermine
and 22050, with 20
008 as refere ence). current and future produuction, consu umption and
trade flows ofo relevant eenergy carriers, and
electricity am
mong the reggions.
gistics Bottlenecks World En
Log nergy Council
5
gure 2
Fig
Grrowth rate in
n the produc
ction and co
onsumption
n of coal in 2008
2 according to regio
on, with
proojections fo
or 2020 and 2050.
2
Sou
urce: EPS2050,, 2009 BP Statisstical Review off World Energy 2
2009, IEA
6
Figurre 3
Growwth rate in th
he productio
on and cons
sumption off oil in 2008 according tto region, with
w
proje
ections for 2020
2 and 2050.
Source
e: EPS2050, 20
009 BP Statistica
al Review of Wo
orld Energy 200
09, IEA
7
Fig
gure 4
Grrowth rate in
n the produc
ction and co
onsumption g in 2008 according tto region, with
n of natural gas
proojections fo
or 2020 and 2050.
2
Sou
urce: EPS 2050
0, 2009 BP Statistical Review of World Energy 2009, IEA
ura
anium will be
e not included
d in further parts
p of the 1.6 Electrici
E ty
stu
udy.
After having mined, processed, annd transporte ed
1..5 Biom
mass an
nd bioga
as energy prroducts, diffe erent types oof energy are
received per sebe it fuel for carss and other
Too lower the global carbon footprint and
d save vehicles, heat for our houses and workplaces,, or
dim
minishing eneergy resourcces, biomass, biogas, electricity
y for our toolss, appliancess, and other
bio
ofuels, and other renewab ble energy fu
uels are necessitie es of living. Regardless
R oof the form of
being looked at by more an nd more gove ernments. energy, th here is no do oubt electricitty is fundamental
Enntrepreneurs are being givven green ceertificates, to everyd day activities and lies at thhe heart of
tax
x incentives, and other re
egulatory suppport. technolog gical progres ss for countriees and whole e
regions. There
T is a hig
gh correlatioon between GDP
G
Froom the logisttics point of view,
v both biogas and per capita a and electric city consumpption per cap pita
omass are sttill insignificant. As for bio
bio ogas, its throughou ut the world.
obal production in 2008 equalled
glo e 33.1
1 million
cubic meters (ssame converrsion rate to TJ as Electricity
y, after being g produced inn power plan nts
natural gas). That was just 1.1% of natu ural gas and sent along transm mission lines to a distribu
ution
pro
oduction. Bio omass is a loocal energy sourceless
s grid, has to be consum med on the sspototherw wise it
tha
an 1% of glob bal productioon is expecteed to be is wastedd, putting a premium on jjust in time
either exported d or importedd. For these reasons,
r productioon. Storing electricity is booth expensiv ve and
neither biomasss nor biogass will be treatted inefficientt, as is its very long-distaance
pre
eferentially in
n further partts of the stud
dy. transportaation. At the end of 20077, transmissio on
and distribution losses in U.S., forr example, werew
Logistics Bottlenecks World Energy Council
8
Figure 5
Projected electricity consumption across regions in 2008, 2020, and 2050.
Source: EPS 2050 model
TWh
50.000 Europe
Greater Russia
40.000
APAC
30.000
North Am
10.000
LAC
Africa
0
2008 2020 2050
2.
2 EEne
ergy trad
de: clossing
g the
e
g
gapss be
etwe
een req quire
emeentss
a
and cappabilitie
es
10
Figurre 7
The wworlds largest net-exporters and i mporters off coal in 200
08 and their net trade vo
olumes in
millio
on tonnes.
Source
e: EPS 2050, 2009
2 BP Statistic
cal Review of W
World Energy 20
009, IEA
Over the next deccade, the bigggest coal-co onsuming The 2050 tim me frame willl change this s picture. Co
oal
regions will exploit their own coal
c reservess rather exports will start growingg (by 39% to o 926 million
than pursue long--distance imp ports. By 202 20, tonnes with respect to 22008), with all regions
althouugh global cooal consump ption will grow
w by 19% increasing nominal
n impoorts and somme even turning
with rrespect to 20
008, coal expports are projjected to from net-exp porters to im
mporters (Africca). Asia
declinne by 9%, to 637 million tonnes.
t Pacific will remain
r the biiggest coal exporter
e and
Logistics Bottlenecks World Energy Council
11
Figure 9
The worlds largest oil net-exporters and importers in 2008 and their net-trade volumes in million
tonnes.
Source: EPS 2050, 2009 BP Statistical Review of World Energy 2009, IEA
importer with global shares of 41% and 43%, transportation needs. It is projected that 58.8% of
respectively (according to the EPS 2050 WEC oil refined in 2050 will be exported to other regions
model). of the worlda higher share than either in 2008 or
2020.
2.2 Oil
2.3 Natural gas and liquefied
For many years, global supplydemand in the oil natural gas (LNG)
market has been anything but balanced. Few
countries hold the majority of reserves, while most The transportation of natural gas, vital for todays
of oil heavy users are vulnerable and dependent economy, is a challenge much more difficult to
on supplier countries, often from other regions. In
overcome than arguably any other fuel. It needs to
2008, out of around 3.9 billion tonnes of oil be compressed and pumped in large quantities to
produced, as much as 2.2 billion were exported to create sufficient pressure in gas pipelines. If
other regions, accounting for 56% of total
transported by sea, it must be liquefied and then
production (Figures 8 and 9). re-gasified at the destination.
Toward 2020, most of the heavy oil importers will As a result, only 11.5% of natural gas extracted in
struggle to curb their dependence, or at least
2008 was exported to other regions of the globe
replace long-distance suppliers with closer ones to (Figure 10). Most of those relatively scarce trade
some extent. One reason is that large reserves of flows occurred via gas pipelines linking gas fields in
oil are located in geopolitically turbulent areas,
former Soviet countries and Europe (44% of global
which places higher risks on them as import exports). Other significant flow was directed from
sources. Another reason, thanks to successful North Africa to southern Europe86 bcm
research and development, is that previously
represented around one-fourth of global exports
unavailable oil fields in net-importing countries are (Figure 11).
now feasible alternatives to imports (heavy oil in
Venezuela and oil sands in Canada). By 2020, the world will be demanding much higher
accessibility and portability of natural gas. Not only
In the 20202050 time frame, global demand for oil will gas exports grow by 86%, according to our
will remain difficult to curband so will be its projections, but also their share in global
ottlenecks Wo
Logistics Bo orld Energy Cou
uncil
12
Figurre 10
Expo ports of natural gas in 20
orts and imp 008 accordin 020 and 2050.
ng to region, with projecctions for 20
Source
e: EPS 2050, 2009
2 BP Statistic
cal Review of W
World Energy 20
009, IEA
Figurre 11
The w
worlds largest natural gas and LN G net-exporrters and im
mporters in 22008 and the
eir net-trade
e
volum
mes in billio
on cubic me
eters.
Source
e: EPS 2050, 2009
2 BP Statistic
cal Review of W
World Energy 20
009, IEA
LNG N
Natural gas LNG N
Natural gas
13
14
Figure 12
Potential bottlenecks across the steps of an energy supply chain with conversion to electricity.
Electricity
Grid Electricity
Gridtransmission
distribution storage
power plants) have access to high amounts of fuel. Three bottlenecks oil transportation, gas
Therefore, their potential output will be limited due transportation, and efficient-electricity systems
to lack of economies of scale. require the most effort to ensure a supplydemand
balance in the 2050 time frame. They will be
3.2 Bottlenecks across the detailed and measured, and a management plan
will be proposed.
supply chain steps related to
energy carriers 3.3 Crude oil transportation
When discussing energy accessibility, people Since its first commercial use in the 1850s, the
relate primarily to electricity, which arguably has variety of applications for crude oil has steadily
biggest impact on their lives. After being produced expanded. Crude oil is reasonably portable and its
in power plants, electricity is transported via high-, reserves around the globe are uneven. The Middle
mid-, and low-voltage grids to end consumers East countries and Russia hold between them a
households, industry, institutions, and so forth. It little less than two-thirds of global reserves as of
may also be stored for later use. Transportation 2008. Both mid- and long-distance transportation
bottlenecks are detailed in later chapters of the are required to satisfy the growing hunger for oil. In
study. Critical gaps are identified where the biggest 2008, 56% of extracted oil was already being
vulnerabilities appear (based on the Vulnerabilities transported to other regions. Such an amount has
Matrix). and will result in an array of logistics challenges to
handle.
Although all logistics bottlenecks deserve attention
and concrete actions from investors and 3.3.1 Major bottlenecks
policymakers to ensure a stable supply of
respective energy carriers and electricity, they still Between 2008 and 2050, global oil exports are
can be prioritised to show critical gaps, which the projected to increase by 17%. This growth may not
world must manage; otherwise, exporting countries seem extraordinarily high, but nonetheless
will not realize potential sales and the economic investors and politicians will struggle to ensure a
growth of importers will be hampered without sustainable supply. That will happen due to three
energy to fuel it. reasons:
Logistics Bottlenecks World Energy Council
15
Table 1
The worlds major oil pipelines and their 2008 through-put.
Capacity Through-put
Direction Pipeline(s)
(1,000 bbl/day) (million tonnes)*
Friendship
CISEurope (RussiaCEE and Western 1,300 58.5
Europe)
1. Oil exports higher by 17% from 2008 to 2050 Congestion management (especially in
is still a large growth, equalling 368 million agglomerations).
tonnesclose to the oil consumption of
Sinking oil platforms (often cheaper than
France, Germany, Italy, and Spain together in
towing it and disposing of it on land).
2008.
3.3.2. Necessary capacities
2. Along with shifting demandsupply patterns,
oil trade routes will change. For example, Equally important to identifying oil transportation
European crude imports are projected to bottlenecks is actually sizing them, i.e., defining the
shrink from 681 million tonnes in 2008 to a investment gap that will cover necessary amounts
mere 430 million tonnes in 2050, signifying of crude to regions which will need them in the
that some exporters (like Russia and 2020 and 2050 time frames.
surrounding countries) will have to find new
markets for their products. This means higher Logistics infrastructure in 2008
investment needs than those resulting from a
volume increase of pure exports. In 2008, global extra-regional exports of crude
amounted to 2,197 million tonnes, the vast majority
3. Apart from the economic issues likely to of which was transported via oil pipelines and oil
happen, social, political, and environmental tankers. Table 1 lists crucial cross-regional pipeline
tensions that may create more logistics logistics routes along with their capacities and 2008
bottlenecks for oil are also very important. transportation volumes.
Having those three sources of potential supply As for land transportation, there are additionally
bottlenecks in mind, a list of them may be put significant extra-regional volumes of crude
forward: transported via rail from CIS to APAC (specifically,
from Russia to China)amounting to around 9
Postponing investment decisions (for example million tonnes annually (179 tsd barrels per day).
new rigs) due to price volatility of crude. All in all, oil pipelines used for transportation
between regions accounted for a mere 6.4% of
An insufficient number of ships.
global exports (140 million tonnes) in 2008. The
Terrorist attacks on ships. rest was transported via tankers, although it must
be noted that loading in most ports would be
Hijacking ships (e.g., pirates near Somalia).
impossible without pipelines connected to oil fields.
Terrorist attacks on pipelines.
Oil tankers transported the remainder of cross-
Pipelines used as a tool in political blackmail.
regional crude flows, 2,061 million tonnes. Crude
oil together with petroleum products are major
Logistics Bottlenecks World Energy Council
16
Figure 13
Capacity development of the global tanker fleet and capacity surplus in the 19902008 period.
Source: Review of the maritime transport 2009, United Nations Conference on trade and development, Geneva
maritime transport commodities, accounting for Existing oil pipelines will continue to operate in the
34% of total transports via the sea in 2008. At the foreseeable futurefirst, because there will be
end of the year, the tonnage of tanker fleet reached demand from Europe for Russian crude (Friendship
414 million dead-weight tonnes.1 Utilization of pipeline) and from APAC for Middle East oil
global tankers reached 96.5% and has been rising (Dorytol pipeline). However, increasing demand,
over last 20 years, with exception of last financial especially from emerging Asian economies, such
crisis temporarily curbing oil demand across all as China and India, will urge neighbouring net-
regions (Figure 13). exporters to lay additional pipelines, which are at
the moment the cheapest means of crude
Apart from investments in enhancing the total transportation. Table 2 lists planned pipelines
capacity of oil tankers, maintaining such a large investments for the 20082020 time frame.
fleet in operational condition required scraping
some ships and replacing them with new ones. In Between 2008 and 2020, all major currently
2008, 202 vessels were demolished, totalling 5.5 planned investments in increasing crude pipeline
million DWT (1.3% of total capacity). capacity will be realized among the CIS, Europe,
APAC, and the Middle East. It comes as no
Capacity requirements between 20082050 surprisethey are relatively close and urgently
require new transport routes to reach clients for
Between 2008 and 2050, significant investments in their crude (CIS and Middle East) or to ensure
oil movement infrastructure will be required to supply for domestic markets (Europe and APAC).
maintain the supplydemand balance. They will
result from increasing demand in most regions and Altogether, four significant projects are planned,
from changing demandsupply patterns around the with a combined length of around 9,000 kilometres
globe (e.g., regions shifting from net-exporters to and an annual through-put of 175 million tonnes of
net-importers). crude. From this amount, 50 million tonnes from
the NekaJask pipeline should be subtracted; it will
1
Dead-weight tonnage (DWT) determines how
much weight a particular ship can safely carry.
DWT contains weights of cargo, fuel, ballast water,
fresh water, provisions, crew, and passengers; 1
DWT equals 1 tonne of payload.
Logistics Bottlenecks World Energy Council
17
Table 2
Major planned oil pipelines 20082020.
NekaJask pipeline
CISMiddle East 1,550 1,000 50
(KazakhstanIran)
*Only surplus through-put.
be more of a transit route from the Caspian Sea to Looking at the projected global oil trade from a
the Persian Gulf. Summing up the remaining 125 demandsupply perspective, in the 20082020
million tonnes of annual capacity with 131 million time frame, out of 141 additional million tonnes of
tonnes from existing pipelines (assuming Russia crude to be exported by countries worldwide, 125
will give up current rail transportation once the East million tonnes will likely be exported to customers
SiberiaPacific pipeline is ready), that leaves 256 in other regions via pipelines. Thus, 89% of
million tonnes of crude, which may be transported incremental global exports in that period can be
via pipelines in 2020 on an extra-regional scale. assigned to oil pipelines. Assuming that this share
remains unchanged through 2050, then out of
Because few companies or governments are 226.9 million tonnes of projected incremental extra-
announcing oil-pipeline development plans further regional oil exports, 201.3 million tonnes will
out than 2020, sizing additional pipeline capacities require additional pipeline capacity and 25.6 million
from 2020 to 2050 requires further assumptions. tonnes of additional tanker capacity (Figure 14).
Figure 14
Projected required capacities for oil pipelines and tankers for extra-regional crude exports in the
20082050 time frame.
2500
Extra-regional oil exports,
2000
M tonnes
0
2008 2020 2050
Year
Logistics Bottlenecks World Energy Council
18
Table 3
The worlds major gas pipelines and their 2008 through-put.
Through-put
Direction Pipeline(s) Length (km)
(bcm)
CISEurope YamalEurope 4,196 33
Druzhba 2,750 30
Central AsiaChina
1,833 40
(Turkmenistan/
KazakhstanChina)
CISAPAC
South Caucasus Pipeline
692 8.8
(AzerbaijanTurkey)
KorpejeKordkuy
CISMiddle East 200 8
(TurkmenistanIran)
MaghrebEurope
1,620 12
(AlgeriaSpain)
Greenstream (LibyaItaly)
540 11
AfricaEurope
Medgaz (AlgeriaSpain)
757 8
Trans-Mediterranean (Algeria
2,560 30.2
Italy)
Arab gas pipeline
AfricaMiddle East 992 10.3
(EgyptLebanon)
19
Table 4
Global extra-regional routes of LNG transportation in 2008 (in bcm). Orange boxes indicate
intra-regional flows and are presented for information only.
Source: BP Statistical Review of World Energy, 2009
Origin
North Middle
LAC Europe Africa APAC
America East
Threat of terrorist attacks on pipelines and natural gas exported in 2008 between regions were
LNG tankers. transported via LNG carriers (roughly 40%) and
60% via pipelines.
Other LNG transportation challenges
(distance from production unit to end-
Capacity requirements between 2008 and 2050
consumers, costs incurred, and infrastructure
required to compress/decompress natural The demand for natural gas, being a much cleaner
gas). fuel than oil and thus more widely accepted, will
3.4.2. Necessary capacities grow significantly over the coming years. The
resulting extra-regional exports are projected to
To assess necessary capacities, as in case of oil, grow almost exponentiallyby 86% from 2008 to
the gas exports in 2008 may be split into two 2020 and by another 188% in the 20202050 time
streams: gas pipelines and LNG carriers. frame! Beyond any doubt, that will require
Analogically to crude, the current infrastructure and tremendous investment to make sure exporting
needs for its further development to satisfy global markets have a platform to reach their customers.
demand are described.
To accommodate such growth, exporters are
Logistics infrastructure in 2008 already building their capacities of existing
pipelines and laying new ones. Table 5 lists
In 2008, extra-regional exports of gas amounted to planned gas pipelines, their length, diameter, and
353.5 bcm, transported by both gas pipelines, and annual targeted through-put.
LNG tankers. Gas pipelines moved around 60% of
this volume, 211.6 bcm, between regions. Table 3 Should all started and announced projects be
shows the division of that volume among completed, 398.5 bcm of pipeline capacity would
respective pipelines. Altogether, 13 trans-regional be added between 2008 and 2020. That is not
gas pipelines have a total estimated through-put of likely to happen, however, for one simple reason
211.6 bcm. Europe will not need that much gas. At the end of
2008, 63 bcm of gas were imported by Europe from
As for infrastructure associated with LNG, at the CIS via the Druzhba and YamalEurope pipelines,
end of 2008, there were 309 LNG carriers plus 68 bcm from Africa and Turkey. In 20082020,
worldwide, with total capacity of 43.2 bcm of gas. incremental European gas imports are projected at
They transported 141.9 bcm of LNG following 33.2 bcm. Even assuming that all of that will be
routes shown in Table 4. Altogether, 353.5 bcm of imported via gas pipelines, there is still a huge gap
Logistics Bottlenecks World Energy Council
20
Table 5
The worlds major planned gas pipelines.
Target annual
Diameter
Direction Pipeline(s) Length (km) through-put
(inches)
(bcm/year)
Central AsiaChina
1,833 42 15*
enhancement
(TurkmenistanChina)
South Caucasus
692 42 11.2*
CISAPAC Pipeline (Azerbaijan
Turkey)
Trans-Afghanistan
1,680 56 33
Pipeline
(TurkmenistanIndia)
Blue Stream
1,213 2455 16
(RussiaTurkey)
AzerbaijanIran
6.57
200
Arab gas pipeline,
CISMiddle East Phase 2 (Turkey
36
Syria)
62
90 1
AzerbaijanSyria
Nabucco
3,300 31
Nord Stream 36
1,222 55
CISEurope White Stream 48
2,100 32
(GeorgiaEU pipeline)
42
South Stream
900 63
(RussiaEU)
QatarTurkey pipeline 2,500
28 20
OmanIndia pipeline 1,100
42 26.5
(subsea)
Middle EastAPAC
IranPakistan pipeline 900
42 7.8
Pars pipeline 1,740
- 37
(IranTurkey
GALSI
AfricaEurope 865 2248 8
(AlgeriaItaly)
21
Figure 15
Projected required capacities for gas pipelines and LNG carriers in extra-regional gas exports in
the 20082050 time frame.
1200
Extra-regional gas exports,
1000
800
Gas volume exported extra-
bcm
0
2008 2020 2050
Year
of 161.2 bcm between announced new pipelines to additional exports of 303.8 bcm in 20082020 and
Europe (in total, 194 bcm) and the abovementioned 166.4 bcm assumed to be transported via new
projected import increase. Such a discrepancy pipelines).
stems from political reasonssome projected
pipelines will substitute for current ones (e.g., the Between 2020 and 2050, as in case of oil, there
Nord Stream is an alternative to the Druzhba or are no available projections for the development of
Yamal pipes). The others will substitute each other transportation infrastructure for natural gas.
(like the South Stream supported by Russia versus Incremental gas exports from 2020 to 2050 have
Nabucco or White Stream supported by politicians been estimated at 1,235.5 bcm. To see how they
and investors willing to decrease the current might be split between gas pipelines and the LNG
European dependence on Russian gas). fleet, the world map with additional gas demand
and supply divided among the regions, is
Of the announced incremental investments in gas illustrative. In case of Europe, imports are projected
pipelines to Europe, potentially capable of to stay at a constant level between 2020 and 2050.
transferring 194 bcm of gas, only 33.2 bcm of In APAC, however, gas imports are likely to
additional gas inflows are about to materialize. That increase by 719 bcm. Assuming 80% of that
leaves 237.8 bcm of global incremental gas exports amount to be transported via pipelines calculates to
via pipelines. (Other planned pipeline investments 575.2 bcm. Remaining incremental capacity (660.3
are all assumed to be realized.) From the bcm) will be transported via LNG carriers (Figure
remaining list, some of the projects are competing 15).
for the same gasfor example, the South
Caucasus Pipeline (AzerbaijanTurkey) and Blue 3.5 Electricity systems
Stream (RussiaTurkey). Taking that into account,
a 30% correction factor representing shares of The process of the generation and distribution of
projects not likely to be completed because other electricity has always been a struggle to increase
options were substituted can be assumed. This efficiency, i.e., the ratio of output (power supplied
leaves 166.4 bcm as likely incremental gas pipeline to end-customers) to input (energy value of the
throughput between 2008 and 2020. fuels used to generate electricity). According to the
McKinsey Global Institute, in 2003, only 37% of
The remainder of necessary exports will have to be energy used in power generation process reached
transported by LNG tankers, if at all. It would customers, the rest being lost in transmission.
amount to 137.3 bcm (difference between
Logistics Bottlenecks World Energy Council
22
Table 6
Status of implementation of smart grids in selected countries.
Source: From Policy To Implementation: The Status of Europes Smart Metering Market, Cap Gemini
2009 and Smart Meters Gaining U.S. Foothold, www.sustainablebusiness.com
Country Status
All major utilities are implementing smart meters on a large scale; 20%
Finland
of the population already have a smart meter installed
Looking ahead to 2020 and 2050, the energy information potentially helpful in production
sector must achieve much higher efficiency to be planning (switch-off plans in factories,
able to satisfy increasing demand, especially from holidays of private users).
emerging economies, while consuming scarce
Problems with the distribution of electricity
energy resources.
generated from renewable sources (wind and
solar) and the production planning of such
3.5.1 Major bottlenecks
intermittent resources restrains their
Major bottlenecks to increasing the efficiency of contribution to the total volume of such energy
electricity systems can be divided into two groups: in the network.
those related to power generation and those Few trans-national grid connections, enabling
related to power distribution. The former results in potential price reductions (arbitrage)
manufacturing bottlenecks (for example, replacing
standard, coal-fuelled power turbines with modern
Increasing overall network security (local
blackouts), and increasing the stability of local
ones based on Integrated Gasification Combined
networks near borders.
Cycle, IGCC). The latter results in logistics
bottlenecks. For example: Limited capabilities in assessing sources of
power loss along the grid, resulting from
Inability to accurately assess the required technical issues or energy theft.
amount of electricity in the network, resulting
3.5.2. Necessary capacities
in the distribution of excessive quantities of
power.
All inefficiencies embedded in todays electricity
One-way communication in the network, from transmission and distribution processes may be
electricity providers to customers, losing decreasedand some of them eliminatedthanks
Logistics Bottlenecks World Energy Council
23
to smart grid systems. Smart grid is a Other regions of the world, it can be assumed, are
colloquialism for a set of tools, both software and more likely to finish their deployment by 2050,
hardware, enabling power companies to increase although some are already actively pursuing smart
the efficiency of electricity distribution by improving power networks. An exception may be Middle East,
information capture throughout the network. which has not yet started large-scale
Hardware elements of smart grids contain, first of implementation of AMRs, but due to a
all, automated meter readers (AMRs) that measure comparatively low number of citizens and large
in real-time the consumption of electricity by financial reserves, they could complete the whole
various points in the network (at end-users and at process in a few years.
crucial network points, such as transformers).
Telecommunications and data-storage
infrastructure is required to handle, analyse, and
store enormous amounts of data gathered via
AMRs (from SIM cards to servers). The software
elements of smart grids comprise programs used
by operators to monitor network utilization, as well
as programs for end-users (web-based CRM
software) to monitor energy consumption in
households.
24
4. Infrastructure investments
required to manage key
logistics bottlenecks
In this section, a top-down cost assessment of An average cost per 1 million tonnes of crude oil
required investments in the global development of through-put as the average for the current and
smart grids is proposed. planned pipelines is calculated in Table 7 and this
yields an estimated cost of USD 45.6 million per
4.1 Necessary investments in million tonnes.
Table 7
Cost evaluation of selected, planned oil pipeline projects .
Annual
Projected
through-put
Pipeline(s) cost of the Pipeline(s)
target (million
pipeline
tonnes)
Trans-Caspian oil transportation system
60 4,000 66.7
(KazakhstanTurkey/Mediterranean
25
Table 8
Average price of oil tankers per 1-million DWT depending on type of vessel.
4.1.2 Evaluation of investments required in On top of that, required outlays to keep the global
the 20082020 time frame fleet operational, scrapping no-longer-viable
vessels and replacing them with new ones, must
Multiplying additional through-put resulting from be added. In 2008, the tonnage of scraped vessels
planned investments in oil pipelines with the price reached 5.5 million DWT. Assume this rate remains
benchmark of cost per 1 million tonne of target stable from 2008 to 2020. That would mean a
crude through-put yields the projected investment cumulative replacement tonnage of 66 million
outlay necessary to close the demand gap for DWTequalling USD 43.9 billion of investment
crude oil transported via oil pipelines. costs.
26
27
Table 9
Cost evaluation of selected planned gas pipeline projects.
conservative cost by the Review of Maritime As for LNG tankers, a part of the fleet operating in
Transportation that estimates a 150 million-cubic- 2008 will become obsolete and have to be replaced
meter LNG tanker costing USD 245 million in 2008. sometime between 2008 and 2020. Assuming the
Because costs of LNG-carrier construction have same rate of scraped fleet (1.32% per year) fleet
dropped by 45% since the mid-80s, according to replacement will be assumed to be the same. In 12
the U.S. Energy Information Administration, years from 2008 to 2020, 15.8% of the global fleet
efficiency increase needs to be built in. Assuming is likely to be replaced at a cost of USD 6.7 billion
another 40% efficiency increase as an average (12 years 1.36% replacement rate 43.2 bcm of
between 2008 and 2050 yields USD 147 million for global fleet capacity USD 980 million cost
a 150 million-cubic-meter carrier, which, benchmark per 1 bcm). In case of a new fleet,
extrapolated to a 1-bcm capacity, gives the cost tankers with a total capacity of 41.8 bcm will be
benchmark 980 M USD per 1 bcm LNG tanker required (if 43.2 bcm capacity was sufficient in
capacity. 2008 to transport 141.9 bcm LNG, then an 85-bcm
capacity should be enough in 2020 to transport
4.2.2 Evaluation of investments required in 279.2 bcm of LNG, indicating required incremental
the 20082020 time frame capacity of 41.8 bcm).
Having calculated necessary cost benchmarks and Total required investments in the global LNG fleet
required capacities for gas pipelines and LNG in 20082020 may be calculated as follows:
tankers, the projected necessary investments for
the 20082020 time frame can be derived.
USD 47.7 billion
investments in tankers 20082020
In case of pipelines, essential CAPEX outlays will
=
be the product of planned cumulative through-put
USD 41.0 billion
and the price benchmarkaverage cost of a gas
new tankers required
pipeline per 1 bcm.
x
USD 6.7 billion
USD 55.1 billion fleet replacement cost
investments in pipelines 20082020
=
4.2.3 Evaluation of investments required in
166.4 bcm
through-put of planned pipelines the 20202050 time frame
x
For oil tankers, the same price benchmark applies
USD 330.8 million/1 bcm to calculate the necessary investments, multiplied
price benchmarkaverage cost of a pipeline
by the projected 20202050 additional pipeline
per 1 bcm
through-put.
Logistics Bottlenecks World Energy Council
28
29
Table 10
Projected progress and estimated costs in smart-grid implementation from
2008 to 2020.
Table 11
Projected progress and estimated costs in smart-grid implementation from 2020 to 2050.
30
lower in 20082050 period than it was in case of 4.3.3 Evaluation of investments required in
Italy. Hence, the value of benchmark cost of the 20202050 time frame
installing smart-grid solutions per 1 TWh of
electricity consumption has been finally calculated The year 2050 may see nearly full emplacement of
at USD 5.90 million. smart meters worldwide (Table 11). By then,
Europe, North America, and the Middle East should
4.3.2 Evaluation of investments required in reach 95% coverage, whereas other regions may
the 20082020 time frame install smart meters for 80% of the population.
Reaching these assumed implementation levels by
As discussed previously, Europe and North 2050 requires investing over USD 161.5 billion.
America are most likely to introduce smart grids on
a wide scale before 2020 (Table 10). Current
progress of implementation in Europe (which may
be measured as a share of the AMRs in the total
number of meters in the region) can be estimated
at around 10%, whereas in North America, it is
around 3% (highest in U.S., lowest in Mexico).
Apart from several pilot projects, other regions
have yet to start full-scale implementation projects.
31
5. Necessary policies
32
33
34
References
1. Hayler, William B.; Keever, John M. (2003). 12. International Energy Agency (2009) Energy
American Merchant Seaman's Manual. Cornell Statistics of non-OECD countries
Maritime Pr
13. International Energy Agency (2009) Energy
2. Pipelines international - March 2010 Statistics of OECD countries
35
Study Chair:
Study Director:
Members:
Chair:
Members:
36
Appendix 1.
Conversion rates used in the
study
Table 1
Conversion rates used in the study
12
Study unit Terajoules (10 J)
37
Appendix 2.
Matrix of logistics bottlenecks
38
Table 1
liquid
Biofuels Compromising
agricultural areas
for needs of energy
Need of
adjustment of local
laws / regulations to
avoid obstruction of
network
investments (e.g.
Law of road)
Pipelines used as
a tool in political
blackmails
Biogas
Hydrogen
39
40
Table 1
General
renewables
Renewables
(e.g. in Africa, Asia) Mediterranean)
Electricity
between national in some countries - cells)
grids dangerous in quality of services
case of blackouts etc. less likely to
Imbalanced national improve
networks (generation
assets far from
consumption)
Logistics Bottlenecks World Energy Council
Logistics Bottlenecks World Energy Council
41
Appendix 3.
Oil refining
42
market and growing demand from the US The divergence of growth rates between
market. Over the last few years, instead, new OECD and developing countries, with the
investments in Europe tended to be in OECD almost flat and developing countries
hydrocracking capacity, in order to meet the showing markedly higher rates
increased internal demand of diesel, while in
- local demand grows with population and
the US they mainly went into coking.
income per capita;
The recent difficulties of the refining sector can be
- less stringent environmental constraints
explained by the combination of two effects: those
which facilitate low-cost production of less
related to global economic changes (mainly the
sophisticated products;
growing importance, for both demand and supply,
of developing countries, where very significant oil - subsidies are often provided for fuels in
resources are located) and those specific to the order to sustain demand and speed up
financial crisis. We will examine the two development of the country;
separately, because the effects of the crisis are
- availability of Western technologies allows
transitory, while the others are long-term trends.
more competitive (more efficient and
large-scale) investments.
Among the structural, long-term trends, we
highlight: All this results in different supply/demand balances
between the countries, with a diffused overcapacity
The decoupling of oil and fuels prices, that in the OECD and difficulties to export excess fuels
have started to be controlled by different from developed economies to the countries with
drivers: strong demand.
- fuel prices reflect mainly the
The demand growth for energy products in
supply/demand balance in the served
emerging economies will slow down
markets;
somewhat because of:
- oil prices are now distorted by financial
- income inequality (since wealth
considerations (because oil, as
concentrates into fewer hands);
commodities in general, is now a financial
investment class whose attractiveness to - phasing-out of subsidies;
global money flows is largely uncorrelated
- congestion and pollution;
with demand of the physical).
- widespread availability of more efficient
As a consequence, refining margins have become
technology reducing unit energy
more volatile.
consumption.
Logistics Bottlenecks World Energy Council
43
The availability in developing countries of there are some factors that in OECD countries
capital to invest. For the refining sector this are contributing to dampen fuels demand
has meant huge investments outside the growth:
OECD area.
- increasing demand for biofuels, sustained
The changing structure of the refining by mandatory requirements;
business in OECD countries: IOCs have
- increasing availability of other (e.g. LPG,
tended to focus on upstream investments
methane);
rather than on the downstream, so a growing
number of refineries in the world is now - improving engine performance standards
operated by independents or NOCs. and adoption of stricter efficiency
standards (e.g. CAFE standards in the
Unique features of this last US);
crisis compared to previous - improved extraction technology and new
cycles large discoveries of shale gas in the USA
is likely to dampen consumption of oil
Refining has traditionally been a cyclic business, based fuels in the coming years;
plagued by alternating phases of under and over- - lower fuels demand in the USA has
capacity expansion. In the report we will look at dampened gasoline exports to the US, a
what makes the crisis of the last two years different mainstay of the European refining
from past cycles. balance;
This last one started as a financial crisis in the - the continuing shift in the transportation
USA: the sudden lack of liquidity from the banking sector from gasoline to diesel puts
system immediately led to (among other things) a pressure on all the plants without an
drop in consumption that in turn caused a drop in hydrocracker;
production across all economic sectors among - legislation to limit greenhouse gases
developed countries. The economic recession took emissions, particularly by OECD
on some specific characteristics in the downstream countries, further impact the already weak
sector, because of changes occurring in the energy competitiveness of local refiners. Given its
business. In brief, on a global scale: proximity to the Middle East, in the EU the
adoption of the new ETS mechanism for
the crisis and economic recession, hitting an CO2 emission permits can significantly
already mature market resulted in a improve the competitiveness of imports.
contraction of demand for fuels. This has in This phenomenon is known as carbon
turn, because of the inflexibility of supply, led leakage.
to depressed refining margins;
Logistics Bottlenecks World Energy Council
44
The investments by NOCs in local refining increasing demand from the BRIC (Brazil
capacity bring at the same time reduced Russia India China) countries;
demand in the Middle East and increasing
the diesel deficit in Europe
exports into developed countries fuel markets
while reducing gasoline exports to the USA, and
The reduced economic attractiveness of the
which countries and companies will have to reduce
downstream business is gradually pushing
their ambitions in the downstream business.
IOCs (International Oil Companies) to focus
more on E&P.
This report is an attempt to estimate the new trade
In the past the reaction of developed countries to balances in fuels, by macro-basin, for the years to
cyclical downturns in refining were (also sharp) come. It will look at the sudden global swing from
reductions in capacity, closing, transforming in under to over-capacity brought about by the
depots. This is still likely to happen again, but with economic crisis and the macro-changes described
some new twists: above and assess their impact along the various
steps of the global oil value chain, focusing on
Assets dismissed by IOCs are often taken those specific to refining operations.
over by NOCs, eager to increase their
penetration into developed economies World Evolution of the Demand
Some refiners are trying to develop
technologies allowing more flexibility in The economic crisis, the spread of the biofuels and
adjusting the ratio of diesel and gasoline in energy efficiency are the main factors influencing
the conversion process the world demand. In particular:
EU refiners are hoping that improved the economic crisis will bring, by 2020, a
performance of Internal Combustion Engines contraction of the consumption estimated
will reduce motorists preference for diesel between 2 and 5 Mbpd (present estimation
over gasoline. In the meanwhile, they are around 100103 Mbpd versus an estimation
wishing for a termination by local legislators of prior to the crisis of 105 Mbpd);
the tax advantages granted years ago to
diesel. at 2020 biofuels contribution is estimated to
be around 3 Mbpd (2.22.6 ethanol e 0.60.7
Medium-long term biodiesel);
consequences for the refining the effect of the measures introduced in North
America (CAFE Standards) in matters of
business
energy efficiency will have a growing impact
on the reduction of the petroleum products.
It is important to understand how the refining
industry will re-balance in order to supply:
Logistics Bottlenecks World Energy Council
45
The areas that will grow more than others in terms Demand Outlook
of demand and refining capacities are Asia and the
Middle East. The economic crisis will bring a contraction in
consumptions, and by 2020, the overall results in
Europe will have to face - from both political and both scenarios will be
industrial point of view - the problem of structural
gasoline surplus which, on the long run, will have to contraction of consumption is estimated
find its outlet not only in the North American market between 2 and 5 Mbpd (present estimation
but also in other consuming areas (mainly Asia). around 100103 Mbpd versus an estimation
prior to the crisis of 105 Mbpd). To 2020
Two scenarios are here illustrated (High and Low)
consumption growth is expected between
based on the projections of two primary energy
1.4% (Low scenario) and 1.9% (High
consultants (Wood Mackenzie and Parpinelli).
scenario) vs. 1.6% expected before the crisis;
These two scenarios do not appear to be so
different, at least in the big numbers, and this is break-through technologies to increase
because there is a substantial agreement on the efficiency in transport (reduction of
assumptions made by the consultants. consumption) or greater energy efficiency
affect the demand;
We try to synthesize them below:
a reduction of gasoline demand in Europe and
in the US;
refined products will remain key for the
transport sector at least up to 2020; growth in the demand of middle distillates
worldwide;
the economic crisis, which began at the end of
2008 and it is not completely overcome yet, Europe and Asia are confirmed as major
had an impact on demand growth, not only consumer of diesel due to the dieselization of
changing the growth rates, but also the fleet and strong growth in transport
decreasing the starting point (demand in business especially in Asia;
2009);
consumption of biofuels will reach approx. 3
the growing spread of biofuels, supported in Mbpd (2.22.6 ethanol e 0.60.7 biodiesel);
the OECD countries by laws and regulations,
in North America gasoline will continue to be
is eroding the consumptions of gasoline and
requested (43% of world total in both
diesel;
scenarios) from the United States but will tend
there is renewed attention to energy to gradually decrease;
efficiency, not only in Europe, but also in the
Europe will face an increasing structural
US (CAFE standards).
surplus capacity, particularly on gasoline,
ottlenecks Wo
Logistics Bo orld Energy Cou
uncil
46
Figurre 1
Low Scenario Demand Ev volution
Sourcce: enis elab
boration on Parpinelli
P datta
Figurre 2
High Scenario Demand Ev volution
Sourcce: enis elab
boration on Wood
W Macke
enzie data
In the
e High Scena ario 9.1 Mbbl/d of new re efining In both scennarios capaccity developmments betwee en
capaccity (deriving
g from new reefineries or 2010 and 20 020 are moststly projected in Asia and
expan nsions) are projected
p bettween 2009 a and 2015, most 70% with
Middle Eastt, with an inciidence of alm
whilee in the Low Scenario
S 9.9 Mbbl/d. In bboth cases respect to th
he world totaal.
projects have bee en cancelled and delayed d. The
gistics Bottlenecks World En
Log nergy Council
47
Fig
gure 3
ow Scenario New Refining Capacity
Lo
So
ource: enis e
elaboration on Parpinelli data
d
Fig
gure 4
Hig
gh Scenario o New Refiining Capac
city
So
ource: enis e
elaboration on Wood Mac
ckenzie data
Refined PProducts
s: Globa
al increasedd demand is not adequate tely satisfied by
new refining capacity. This unbalaance is proba ably
su
upply / d
demand scenariio due to a limited
l visibility on possibble additional
expansion projects.
Looking at the different products the Loow scenario
and the High sccenario tendd to diverge: according
a to On the otther hand theere are new pproducts enttering
e Low scenario in 2020 th
the he world will have a big the marke et: reference
e is made maainly to biofue
els
surplus of gaso
oline. (ethanol, ETBE and biodiesel)
b thaat compensate (it
would be better to say y over-compeensate) the
The global sup pply-demand balance sho ows a imbalance for gasoline and diesell. This is eviddent
surplus of refined products in the recent years. In he Low scena
both in th ario and in thhe High scen
nario.
e long term (a
the after 2015), the
t global baalance
points out a shortage of prooducts (with the
ception of ga
exc asoline in the
e Low scenarrio) as the
ottlenecks Wo
Logistics Bo orld Energy Cou
uncil
48
Figurre 5
Low Scenario Refined Pro oducts Supp ply/Demand
d Balance 20
020
Sourcce: enis elab
boration on Parpinelli
P datta
Figurre 6
Low Scenario - Global
G Suppply/Demand Balance at 2020
Sourcce: enis elab
boration on Parpinelli
P datta
gistics Bottlenecks World En
Log nergy Council
49
Fig
gure 7
Hig
gh Scenario o Refined Products Supply/Dema and Balance
e 2020
So elaboration on Wood Mac
ource: enis e ckenzie data
Fig
gure 8
Hig
gh Scenario o - Global Suupply/Dema
and Balancee at 2020
So
ource: enis e
elaboration on Wood Mac
ckenzie data
Logistics B
Bottlenecks World
W Energy Co
ouncil
50
Figurre 9
Gasooline Deman nd in the USA
Sourcce: enis elab
boration on Wood
W Macke
enzie data
51
Fig
gure 10
Le
egislative Im
mpact on Fue
el Oils
So
ource: EPA, WWood Mackeenzie, Interna
ational Maritiime Organiza
ation (IMO)
ECA
A = Emission C
Control Area, SE
ECA = SOx Emis
ssion Control A
Area
does not take into account the new IMO O regulationss Control Area)
A that cou
uld come intoo effect from
about bunker fu uel (while the
e Low scenaario does), 2012.
hich could red
wh duce of abou ut 40% the deficit of Fuel
Oill and increasse of the sam
me amount Gasoil
G This could bring to swwitching fuel ooil demand
demand. towards middle
m distilla
ates, with ann impact of in the
order of 200
2 mln ton/y y.
Fu
uel Oil
In this contest the role
e of new deeep conversionn
The Internation nal Maritime Organization n (IMO), the projects should
s be very important in order to
UNN agency in ccharge of imp proving safety and decrease e fuel oil prod
duction.
preeventing pollution from sh hips, in orderr to reduce
emmissions by vvessel traffic issued the MARPOL
M Concllusions
(MARine POLlu ution) regula
ation. In Octo
ober 2008 a
gnificative am
sig mendment to MARPOL Annex A VI wass Main Oil System Cha
allenges
approved, aime ed at reducin
ng even furthher
emmissions from m ships. The main change es to For the on-going yearrs the whole Oil System
MAARPOL Anne ex VI will see
e a progressiive reduction n eiterate its strrategy, objecctives and
should re
in sulphur
s oxidee (SOx) emisssions from ships,
s with commitments to overc come the strructural
the
e global sulphur cap in bu unker reduce ed initially to es affecting the refining inndustry in the
challenge e
3.5
50% (from the current 4.5 50%), effectiv ve from 1 World and in Europe and USA in pparticular, by y:
January 2012; then progresssively to 0.5 50 %,
efffective from 1 January 20 020, subject tot a conttinue to adjusst its refiningg base in
suustainability rreview to be
e completed no later than n resp
ponse to shrinking demannd in Europe e
2018, that coulld delay the enforcement
e t at 2025. (gas
soline/diesel fuel imbalannce); and USA
(gas
soline demannd);
The limits applicable in Sulphur Emissioon Control
Are
eas (SECAs, currently Ba altic Sea, No
orth Sea and addrress the impact of the resstructuring of its
En
nglish Channel) have bee en reduced too 1.00%, activ
vities in affec
cted regions;
beginning on 1 July 2010 (ffrom the currrent 1.50 %);; com
mply with seve
ere regulatioons, i.e. in the
e
educed to 0.1
being further re 10 %, effective from Euroopean Union, especially tthose concerning
1 January
J 20155. the environment
e
52
Promotin
ng sustainable e energy for the
greatest benefit of all
ISBN: 97
78-0-946121-12--0