tv [untitled] October 29, 2011 7:30am-8:00am EDT
welcome back this is our t. live from moscow here's a recap of all the stories we're covering today american as you call for protesters now have to battle the upcoming winter without power supply after authorities confiscated their generators and fuel however they remain on a positive note as their ranks are bolstered by reams and car. germany's nationalist party see support for its anti immigrant status and growing in the country but critics say the trend is giving rise to violent crime and could cause even deeper social divisions. of the man who robbed millions of people of their life savings of the one nine hundred ninety s. is that he's once again promising the earth and there are still plenty of people ready to invest in his questionable enterprise. all spotlight is next and decide al
gore says down with an energy expert to discuss our planet's limited oil reserves and what it could mean for the future that's next year an artsy. hello again or welcome to spotlight the interview shared on party i'll do nothing today my guest on the show is richard jeff. according to the international energy agency they're searching and their children will most likely leave the work to a dive trip full reserves are running out faster than expected and the growing fuel consumption raises environmental concerns but this right all the warnings people continue burning poil and oil and the promising alternative energy sector is still unsufficient be developed so what's to be done to avoid bad future without too
radical changes to our way of living and maybe russia going to help with that we're asking the deputy executive director of the international energy agency richard jones. the international energy agency says the world is entering the golden age of gas with production to rise by fifty percent in the next twenty years russia's going to sheeple were one hundred and ten billion cubic meters of gas to europe through its south and north stream pipeline the construction of south stream is starting soon at nordstrom's start operating in early november the trans underneath the baltic sea and delivers russian gas directly to western europe this is mantra from the european energy security and we can expect pendants on transit countries. michel thank you for having me thank you thank you very much for being for being
here. over the international energy agency the i.a.e.a. has signed a new operation agreements with russia one. new in the. couple of what it's. it's it's a good question but. basically we're continuing the evolution of our cooperation which is going on for many years but in particular the focus is coming will be more and more on energy efficiency which is a very important objective for russia not only will it allow russia to adopt new more modern technologies will be and benefit for economic growth in russia it will give you more resources to add to your exports so i think it will be a win win for russia and for the international community because greater supplies of russian oil and gas will. mean greater energy security for the rest of the world well we like talking about energy security security. especially security of the
moment but also the security of supply there anyway when you talk security of supply security of the moment we mean that there is a contradiction between the consumers and this is the do these new agreements at least try try to to overcome these kind for the u.s. in a way because one of the main components of the agreements is that we work more closely together and we figure we can learn from each other particularly in improving our market forecasts and this year's world energy outlook which is coming out in just a few days now in fact our executive director will be in moscow on the eleventh of november to present it just two days after that after the worldwide launch. it benefits greatly from cooperation with russian experts we did a special chapter of our actually special section focusing on russia and in preparing that i mean the judgments are all our own they have to be put in preparing at that section we relied very much on conversations with the russian
officials and executives from a variety of private companies as. well in russia richard since you've mentioned the forecasts well according to one of your forecasts of the i.a.e.a. i quote despite concerns about the state of the world economy while demand will rise by one point three million barrels to ninety point five million barrels a day in two thousand and twelve next year what keeps the demand so high despite what's happening in the world the simple answer is that there is a crisis in part of the world and the other part of the world that continues to grow and the part of the world is continuing to grow as a high marginal demand for oil products so oil is continuing to grow and why is that because they're getting rich enough to buy cars in china and india and so it's transportation in those countries which is a major part of the incremental demand in fact in o.e.c.d.
countries the developed world where there is an economic crisis you may actually see declines in the use of oil yeah and consumers in any young growing economies they like big cars. very gas can see. their values and then think about savings we just hope they buy more efficient cars that at this stage in their development in our country that's not available what so the forecast for for oil prices we don't we don't we don't forecast. we what we do is we base our projections for short term price as we use basically the future price that's available in the market we just assume that if the people that are in the financial markets know better than we do what the price might mean a future and so we just use the future strip as we call it the different prices for different time periods as as they were our working assumption on prices and then we figure out supply and demand from that rather than trying to forecast price well.
libya libya produced one point six million barrels of oil a day right now production fell dramatically because of those civil war everything ready to come. to only ten thousand a day present barrels a day which is the if i'm not mistaken the figure for last month's what does it mean for the world market they would be aware of what was a considerable source of fuel once yeah i mean the problem with oil of course is that it's a very inelastic fuel price price unless the is low small changes in supply mean big changes in price and that's basically what we saw in that period and because of that one point six million barrel a day shortfall in libyan production and most libyan production was exported so about a shortfall of one and a half million barrels a day on the world markets a lot and especially because the issue of the shortage was prolonged i mean it really libyan exports went to about zero in march and so that's now been you
know we're going on seven months now and they're recovering a little bit they'll be able to hire this month and by the end of the year they could be between four hundred six hundred thousand barrels a day but even by june we estimated over one hundred thirty million barrels have been taken out of the market and that has to come from somewhere either it either it comes from from declining stocks either commercial stocks or government stocks or it means demand is lower than it would have been otherwise and why is that because the tightening of the market raises the price and so the price means some some people that would have bought oil by less oil. well ok but i don't know if it's savings if you go without it does that mean it may mean lower experts who know but nobody's nobody even considering trying to use to teach you cruisers really what we did use them i mean we use them in in june and. we think that that present
prevented a price spike at the time because it helped to supply the market we really sixty million barrels. thirty eight million barrels a day. it was from government strategic stocks twenty two million barrels was released by allowing companies to hold less stocks companies have a kind of like a bank has a reserve requirement companies sometimes are required by governments to hold stocks so release those we relax those requirements some countries did and other countries sold oil into the market out of their strategic stocks and that that release was very well received by the market more than thirty more than ninety seven percent of the thirty eight million barrels that was offered from strategic stocks was picked up by the market and by the way that oil was sold at market prices so it we weren't trying to undercut the market we were just trying to supply the market at the prevailing price well you mentioned that libya is still a thing to regain its previous production but now it's ten thousand took maybe
about fifty thousand all in all five hundred thousand five hundred thousand not one point six million so how long will it take libya to to regain its one point six is the possibility is what it's right and should do yeah well nobody knows the short answer is nobody knows and there you know what we've been saying is it will take many months even but they did destroy the industry i mean there's no but there is some damage there is some damage and it has to be recovered and oilfields you know they can be damaged. you know just if they're neglected so we you know the damage needs to be assessed to the infrastructure to the fields but i'm cautiously optimistic that to the oil fields could come back on. by the end of next year but i don't want to make any such predictions simply because we just don't have enough information at this time so if it's going to take a while and one of the reasons why we now think we can get by with lower amounts is
because it is ramping up a little bit also there were some other small outages around the world that have now. and corrected but the main reason is that demand is weaker than we thought it was economic forecasts are going down and so we are and we're not the only ones forecasters around the world are revising downward their assumptions are their forecasts for i mean not only for this year but for two thousand and twelve as well so we think the market will stay in relative balance but. it's it's not going to be a good. year for the for the oil industry i think well actually if we talk in general about the arab spring it certainly. was welcomed by politicians in the major democracies we started to clinton out i mean she was when she saw the picture. of the last some arab dictator we'd be being massacred and
yeah he lives just the other day but they work it wasn't so much happy about that it's pretty was it well if it did disrupt the market and but you know markets can be disrupted in many ways then and. you never know where it's going to come from i mean the last time we use stocks it was because of a hurricane. you know the first time you stocks it was because of international aggression this was because of civil war civil dispute. in nigeria they've had a lot of problems with sabotage the pipelines that people are trying to steal the oil. and it's also related with with civil problems there so there's there's just you never know where it's coming from but you do you need to always be. on guard for these kinds of disruptions and that's that's one of the reasons that the i.a.e.a. was created says richard jeff that you take that kind of director of the international . spotlight will be back shortly after the take a break so stay with us. a
very warm welcome to you this is your news today protesters on the wall street center they are. ladies and gentlemen your chance to choose is to get the status of the human experiments given . your problem this is what it goes to the military trying to censor local economies and its arcane things about financial trouble the responsibility to maintain our confidence in markets and things not going to be
easy trade imbalances recession to keep the nations close to sing a song like moon feel close. to feel super late again feeling like thing is us crash and imminent smash the ceiling influences like ultimate injustice in athens the argument that strikes me i'm just programs increase the total economy. but i'm dumb. struck by some of the australia you know the new zealand know who is going to see the film on. if you want to have sex go and have sex.
luck. welcome back to the spotlight an album of and just a reminder that my guest on the show today is richard jens deputy executive director of the international energy agency. richard roth let's talk about about russia's policy well there's lots of talk about the red direction gradual red direction russian crew. flows for from the west towards asia and first of all to china how is that seen in the west could it be a reason for for a clash of interests between russia and the west china and the west no i really don't think so and the simple reason is that it's
a global market these days they will market is is a worldwide and. china is where the action is that's where they're growing in consumption china and india are the two primary and the middle east where course they have their own oil so i think it's fully understandable in fact we we anticipate it always city or oil demand will actually decline so it's a natural process china has the demand they're willing to pay the price as they get the oil according to the latest. report i quote the world faces a dire future unless a complete change of course is made to deal with the huge problem of surging energy of the moms and quit what does the our i e a suggest doing in order to avoid the future well i mean you're talking about a dire future in that in the event of surging demand for fossil fuels i mean energy is life as population increases economic activity increases and even though we all
hope that our ability to use our energy efficiently improves over time we know that rising a rising population as long as that happens means there's going to be rising energy demand the key question is how we supply satisfy that demand right now our our energy mix and all countries are. almost all countries is heavily focused on fossil fuels and the concern there is that fossil fuels are first of all they're there are supplies limited nobody knows so when will run out but everybody knows that it's a fossil resource and therefore is limited in supply took millions of years to create the oil and it's going to go away and in hundreds of years so it'll it'll in someday also it's a dirty fuel. production of oil and gas can be dirty consumption of it is certainly dirty in terms of normal air pollution but particularly i think what we're warning about in that particular passage and so that is the prospect of climate change well
speaking about again as well actually specialists and specially the russian people from gazprom they say that they of course say their gas is more climate friendly than or oil. production and consumption of gas so the i.a.e.a. also says i quote that the world was potentially entering a golden age of dance with production set to increase by over fifty percent by twenty thirty four i well do you think that that really goes is going to replace oil in the a and it will be good for you for a climate for the gas competes more more properly actually with cold and with and then with oil because because gas is used for power generation and in industry and those those uses it if. it's much cleaner than coal and not only in terms of the normal air pollution if you think oh but in in the key area of emissions of carbon
dioxide. natural gas and it's far less about half as much and by energy value is cold us so it is a much cleaner fuel then in coal and we sometimes talk of natural gas as a bridge bridging fuel because it can help us while we're still dependent on fossil fuels reduce emissions and. we have the capability of rely more on the advanced technologies of renewable sources of energy and so on that are not admitting it all but. we can't rely on natural gas indefinitely because even natural gas doesn't get some c o two and so over time or energy demand will grow to the point where even natural gas could lead to global warming and that's why we talk about it as a transition from why i mentioned this quote from the i.a.e.a. report is that. we get an impression that he really remains rather skeptical about such things as that is as the renewable sources of energy this is
where you're depending on guess and we'll forecast all based on an obvious is the same as well first of all there are scenarios and this scenario has certain certain assumptions and one of the assumptions is that the consumers will welcome gas and that's that's very important right now gas is undergoing a renaissance because the prices come down but it is demanding creases the price will also increase and there then they'll be rebalancing of markets so well but you know we're it's not that we're skeptical of renewables it's that we just do the arithmetic we recognize that many countries particularly in western europe but other countries around the world including china have have targets for instance expansion of their renewable industries we feel that they are committed honestly committed to honoring those targets and they will do so but we also know that there's a tremendous amount of investment in the existing system and and no country is going to give up that capital stock before it's time it would just be you know none
of us are rich enough that we can afford just to throw away perfectly good equipment and that's one of the reasons that we sometimes worry about what we call technical or technology lock in it that the coal plants built today will be around for fifty years and so that's why. we think it's very important for countries that are serious about this to soon. begin and to to actively support the expansion renewables but we just look at the size of the industry and the amount to the paddle mix that exist and we figure that it would be very good if for a noodles to expand say at an average rate of ten percent a year and given the small role they play now that means it's going to take a long time before they dissipate place fossil fuels it's just a written take where we're very soon of movember eight that actually lead reputed will be so the brits and the launching of this i think is favored project the north
stream project which will either load the first gas supply from russia. underneath the baltic sea to germany and you know that this is this is really a great project well what do you think is the prevailing the prevailing sentiment and your sentiment in europe i have because on the one hand people want to want an interrupted supply from the sure steady supply to be sure in the supply but on the other hand they are worried about the growing dependency on russian gas and says so what we simply will be probably what well i think i think you you cast it very well . they appreciate russia as a supplier i think most europeans think that russia has been a reliable supplier over the years in recent years there because of the. issues with ukraine there's been some nervousness and but i think anybody who looks at the at the data will realize that yes russia is dependent i mean yes europe is
dependent on russia for supply for russia is also dependent upon europe for demands can't you know yeah and in fact russia has a smaller share of the european market then europe has of russia's exports so you can say. that russia's more dependent on europe and europe is dependent on russia except that the one forgoes money if it doesn't make the sale the other word for it goes heat in the winter time you'd rather have the money so the important thing though is that they have to work together. you know no no commercial. transaction takes place unless it's beneficial for both the buyer and the seller and that's the key i know well i guess most of the people especially the politicians the businessmen in you know they understand that what you say is that is that in case of mutual dependency you read dependency is just how often the problem you approach is the better the face is the other part of that this is
a problem you know there's a there's a joke in united states that if you if you owe the bank thousand dollars and can't page your problem if you owe the bank a million dollars and you can't pay is the bank's problem right so but why then europe isn't so happy about it's about the sound stream project why isn't your brady ready to to to throw its weight. one of the answers we get here in russia is it because the ukraine is lobbying against this russian project. not aware of any particular ukrainian lobbying on that score but i suppose it could be true i don't know. i'm just not a position where i would know about that but i think the main reason is normally when we look at increasing your security one of the simplest ways to do it is increase the diversity of your sources of supply and that can mean diversifying the routes from the same supplier because sometimes there is an interruption of
a single route but the supplier will be perfectly happy to supply from another route but it's also diversifying your suppliers and there's a whole host of countries in that southern area that are potential suppliers of gas to europe. particularly the caspian states but also countries like iraq in the future could be potential so there is a european i. idea of developing what they call the southern corridor and the i.a.e.a. looks favorably on that but that doesn't necessarily have to come at the expense of other other projects we we don't endorse any particular commercial projects but we do look at diversification and the southern corridor which is an important opportunity for europe to diversify and i think that's why they're looking at it but to put it into perspective in this golden age of gas study that you you mentioned we see basically an increment in european import to me and because their production is declining even though their demand isn't growing very rapidly there
import demand will grow on the order of two hundred twenty billion cubic metres per year. over the next twenty years that to put it in perspective that's a quill into about six pipeline projects maybe a dozen large elegy plants so there's plenty of room eventually for all the projects we're talking about today it's just a question of the timing i was the ambassador american ambassador in kazakhstan when we were working on and that's what i tried to explain to people there that you know it was not directed against an expansion of the c.p.c. line i told people that will eventually have both and here it is eleven years later and we have the baku jape pipeline and the c.p.c. expansions and have been approved so i was right and i think that's what will happen to the gas here in the future thank you very much for being with us was a pleasure having you on the show and just to remind you that my guest today was richard stepping things like a director of international energy and that's it for not for all of us if you want
to drive your sales profit but maybe you have someone in mind when you think i couldn't for the next time this drop me a line. out of the t.v. dot. and let's see spotlights into the movie back with more of the uncommon thought of what's going on in and outside russia until then they are to see and to. thank you it isn't. possible to. live. the. sublime subsists.