Atlantic Council
Global Energy Forum
Special Briefing: World Energy Outlook
Moderated by:
Frederick Kempe,
President and CEO,
Atlantic Council
Keynote Speech By:
Dr. Fatih Birol,
Executive Director,
International Energy Agency
Location: Al Maryah Ballroom, Four Seasons, Al Maryah Island, Abu Dhabi, United Arab Emirates
Time: 10:15 a.m. Local
Date: Friday, January 13, 2017
Transcript By
Superior Transcriptions LLC
www.superiortranscriptions.com
FREDERICK KEMPE: Thank you very much. I’m going to get used to that musical introduction for myself when I go back to the office in D.C.
Ladies and gentlemen, welcome to our very special briefing on the World Energy Outlook. I know what an important briefing this is because I see the minister has joined us here again. It’s great to have you. We’ve so enjoyed partnering with you in this forum as we – as we get to the middle of the second day.
We’re honored to be joined by the man with the vision and the expertise behind the World Energy Outlook, Dr. Fatih Birol. Fatih is an old and dear friend of the Atlantic Council – actually a young and dear friend of the Atlantic Council. We benefited from his eloquence and wisdom many times over the years. We’ve worked together very closely. I’m very proud in the last year he’s joined our International Advisory Board as well.
He is one of the world’s foremost public servants in the energy space as the executive director of the International Energy Agency. Some say he’s the most effective leader or one of the most effective leader the organization has had. He’s leading a major effort to reform the IEA so that it can be more representative of the global energy picture in terms of membership and so that it can be more effective in bringing attention to the most pressing and complex energy challenges we collectively face. Under his galvanizing leadership, IAE is driving real action to address common challenges.
In this challenging energy landscape, governance is more important than ever. Last fall the Global Energy Center at the Atlantic Council convened a special energy governance task force to explore this topic. Over four sessions a group of senior officials and experts in the energy sector from around the world convened to assess the state of energy governance today and to establish a set of principles to guide the approach to this issue and to offer recommendations. The Global Energy Center will issue the results of this task force report in the coming weeks.
Today Fatih is going to speak on the major aspects of the 2016 Global (sic; World) Energy Outlook, the latest iteration of the seminal annual report that maps the world of energy with hard data and uses the best modeling and analysis to illuminate our energy future. The 2016 outlook is particularly exciting because it incorporates the nationally determined contribution set forth in the 2016 Paris Agreement.
After his remarks, Fatih will join me for a moderated discussion to take your questions. So, as you watch and listen to his comments, already start thinking what you’d might much like to hear from him.
So, without any further ado, please welcome Dr. Fatih Birol. (Applause.)
FATIH BIROL: Your Excellency, dear colleagues, dear friends, a very good morning to all of you. Many thanks to Atlantic Council once again inviting me to this excellent event.
As I was telling to His Excellency a few minutes ago, I am delighted that this Atlantic Council takes place here in this beautiful city of Abu Dhabi.
UAE being a distinguished member of OPEC, a reliable oil supplier since many, many years makes also major new inroads into other parts of the energy sector, which I think can be a very good example to many oil-producing but also oil-importing nations. Steps in the direction of renewable energy, energy efficiency and also nuclear power are important cornerstones of the UAE energy policy.
More broadly, when we look at the UAE economy, since many years there is a strong attempt with concrete results diversifying its economy, broadening the economic pace, which provided excellent results, as we all know.
As such, I would like to congratulate Fred and his colleagues for choosing UAE for this important meeting. And as a humble member of the advisory board, I would humbly advise to continue with this tradition in the next years to come.
So, ladies and gentlemen, I thought, as I was suggested – it was suggested to me by the colleagues from the council, give you a general view of the global energy markets and related issues in the next 20, 25 minutes, as we see them for the near future and the longer future and which could provide a good basis for discussion.
Before looking at the future, a couple of points about today, point of departures.
In terms of oil, as of 1st of January this year, the share of Middle East countries in the global oil production reached a historical high, about 35 percent, which we have never seen since early 1970s. This is important, in my view, data, which could bring many aspects into consideration, such as, as I have been saying, as many of you know, despite what is happening in the United States, the shale revolution, and other countries, I believe Middle East is and will remain central to the global oil markets many years to come. But at the same time bulk of that production goes as export to different parts of the world, and it highlights the importance of Middle East in the global energy security context.
Gas markets – I will come in a few minutes, but gas markets are going through a second revolution, if I may say so. Some of you may know, may remember, in 2009 we said in the World Energy Outlook a silent revolution is happening in North America, talking about the shale gas, 2009, seven years ago. And this silent revolution became very loud now, and in my view it was the first revolution. Now a second revolution is coming in terms of LNG revolution, which will have major implications for the gas markets.
Third, renewables. Our numbers show a very hard fact. It is not a projection. It is not a focus. It’s not a wishful thinking. Data, what happened 2015, is the – globally, the new built capacity in the entire world for renewables was higher than all the other fuels and technologies put together, which means renewable capacity additions were higher than oil plus gas plus coal plus nuclear power. And these renewables were mainly led by the growth wind and solar power.
Climate change, another area that I should praise the awareness in this very country of United Arab Emirates but also many other countries around the world. We have a milestone agreement in Paris last December. And ladies and gentlemen, when we talk about climate change, energy sector is at the heart of it.
Why? Very simple. More than two-thirds of the emissions causing climate change come from the energy sector. So without fixing the problem in the energy sector, we have no chance whatsoever to fix our climate problem. And therefore, the Paris Agreement is excellent, historical.
Having said that, Paris Agreement, in my view – we have excellent experts who knows the agreement much, much better than me, like Mr. Todd Stern – it was a diplomatic international political answer to a formidable challenge. But it is not legally binding, especially the nationally determined contributions. And to be very frank, I am a man who makes his hands dirty with data, and I like it. When I look at the numbers, the impact of Paris on the market dynamics, while Paris brought a big political momentum, I don’t see that happening.
Just two numbers to you: Just before Paris – and we are – we have European colleagues here – just before Paris, carbon price in Europe was 9 euros per ton before Paris. We have a Paris Agreement, which means climate will be more important in decisions, roughly; you would expect the price of carbon would go up. Today, ladies and gentlemen, since several months, price of carbon drop from 9 euros to 5 euros. Number one.
Number two, coal. The fuel which has effused unabated can have implications for the emissions. And we have our colleagues from the coal industry here. And coal prices before Paris was about 48 (dollars), $47. Today, coal prices are about $90, doubling the price.
So of course, there are many reasons why we see these changes in both carbon price and coal prices. But what I’m saying is Paris is done, therefore we will see the effects; that statement will be very wishful thinking from a(n) environmental point of view.
Another issue as a point of departure is today billions of people remain without electricity across the world, which is another area of concern for us.
So where we go from here will depend on the government decisions. Governments come and go in different countries, and their policies will be critical to take us from here.
But when we look at NDCs and look at the future, which fuel wins, which fuel loses: Look at the last 25 years. By far, coal was the biggest winner. Coal made the largest contribution to global energy use in the last 25 years. When we look at the next 25 years, based on the NDCs that governments have, we see that coal will still grow, but the growth will be much slower than before. And this is as a result of many facts but including the air pollution impact of coal in many countries.
Oil will continue to grow, unlike some other thing, and I will comment in a moment. But gas and the low carbon are the main drivers of the growth. And when we see low carbon, we both think renewables and nuclear power.
Renewables are growing very strongly, mainly as a result of cost reductions; cost is coming down. But nuclear as well. We talk about renewable a lot, and I will talk in the next two, three days in renewables a lot, but let me have a word on nuclear power.
Today we have about 70 nuclear plants under construction in the world, and half of them, almost half of them are built in China. But some other countries are also building and giving a second look at their nuclear plants programs.
In United States there are six nuclear power plants now under construction. And one may also expect that the new administration may have a – give a closer look to the nuclear industry. Japan, after Fukushima, slowly but surely, we see that the nuclear power set to increase its share in the electricity mix. In France, we have a(n) election in France very soon, and one of the frontrunner candidates, Mr. Fillon, said he would like to see the share of nuclear not to be restricted, as just stated by the current administration. And as I said, in this very country of UAE, we see strong positioning in terms of nuclear power. So therefore, disregarding nuclear may not be a realistic option in my view.
So, looking at the future, this is a picture of what we see. All the fuels are growing, but the share biggest growth coming from renewables. And it is not from one country or two countries – across the world. And China is the undisputable leader of the renewables growth. Today China is number one in solar, number one in wind, number one hydro – number one in all renewable investments across the world and as such making a great contribution bring the cost down.
Now, what is – what is next for renewables? Two things. Two challenges.
Number one, bulk of the growth in renewables up to now happened in the electricity generation. Why? Very simple. Today 150 countries in the world, 150, they have concrete renewable policies and incentives in the electricity generation. But electricity generation is only a part of the energy mix. There is huge room renewables to grow in heat and transportation area. And I think we think this is the second chapter of the renewables growth, moving from electricity the first chapter, and now the second chapter, heat and transportation sectors. This is the first one.
The second one is the ability of the power systems to deal with the mismatch between the renewable production and the peak electricity demand in the countries. Peak electricity demand in India is around sunset. Wind in Southeast Asia, major problems because of the seasonal variations. So therefore, this is the second challenge we are facing, how we design our electricity systems in a way to deal with the solar and wind power generation without having insecurity in the electricity sector and also making the most out of renewables.
Australia – I don’t know if we have anybody from Australia – there was a major blackout in Australia several weeks ago. And this is mainly as a result of this mismatch I mentioned to you.
Now, we have a lot of colleagues here from United States. It is very good to see them with us here. And I want to tell you something that I brought to the attention of colleagues in Washington very, very recently.
In the U.S. presidential debates – many of us follow with great interest – most of the time they discuss the very issue of United States being energy-independent. What they mean, in fact, oil-independent, no imports anymore. It’s a good thing or a bad thing, this other issue. But the main idea is you can be independent in terms of oil if you increase oil production. What we say, this is true, but this is half of the truth, not the entire truth.
Why, I will explain you. Now, today U.S. is a significant oil importer, and we think soon U.S. will not be importing oil or very little and as a result of two things. One, U.S. oil production will increase – huge rich resource space. But second, as important as that, U.S. oil consumption will go down as a result of efficiency improvements in cars and trucks set a few years ago. So you do two things: one, increased domestic production, as much as you can in any country, including U.S.; and second, slow down the oil demand growth as a result of the efficiency improvements in cars and trucks. This is efficiency improvement is a very good friend of energy security. It is not only increasing the production but slowing down the consumption growth as a result of efficiency.
And it is not only in United States; it is across the world. For example, Europe – we have colleagues from Europe – Europe discusses not much oil, but the gas security, gas imports since 2009 became a major issue – still a major issue. Now, in Europe we use gas for two things. One, electricity generation. The second is home heating. The main two things.
I will give you one number which I find very interesting. In the last 15 years in Europe, there were 20 million new households added, which means gas heating demand should go up with the new households. But it went down 10 percent – more households, but the consumption went down. The main reason – two reasons: one, the diverse standard set by – for the boilers of the gas for heating; and the second, insulation of the apartments buildings.
What I want to say is that you don’t – when you look at the gas security of Europe, we talk about Russia, Caspian – these are all very important. But also, through efficiency measures, you can import less gas and enhance your gas security.
Moving to oil markets, we are saying since four months – and I think the developments do confirm – we are entering an era of greater oil price volatility. What we have seen, two years in a row, 2015 and 2016, global oil investment decline. This has never been the case, ladies and gentlemen, in the history of oil. If there was a decline one year, next year there was a rebound. It never happened. And this will have major consequences for the markets.
Almost no major approvals of new projects, no discoveries, very low level of discovery since 1960s. Why? There is no money for exploration. You find something if you look for it. So we don’t look for it, so we don’t find it, new oil.
These are all very important signals. And as a result of that, we believe if this year there are no major new projects starting, especially in easy oil areas, in three, four years of time we may well see a significant supply-demand gap, with major implications. And this gap may not be filled only by the shale oil response we can have from U.S. and elsewhere. And it is the reason we think we may well be entering an era of greater oil price volatility.
Now, I want to go to a topic which is widely discussed by the oil industry. From here on Monday, I will be going to Davos, and I can tell you the CEOs, the ministers, one of the areas that we are going to focus will be, is oil demand peaking? Because our sister organization, OPEC, many companies, IOCs, said they are seeing a peak of oil demand growth sometime soon as a result of the developments in the car markets.
Now, I agree that the car markets, the automotive sector, is a going through a major transformation. And this will have implications for the oil markets. But I do not agree that unless a major development, discontinuation in technology happens, we see a peak oil demand. We think oil demand will grow, slower than perhaps before, but still grow.
Why? It is the following. We see a decline of oil in electricity generation, especially in Middle East – I will come in a moment – heating at home and also in the cars. Cars’ oil demand will decline. In 2040 we will use less oil for cars than today, even though number of cars will increase. Why demand declines? Because we will have electric cars. We will have the cars much more efficiently.
But we don’t think that the oil demand will peak because growth will come from trucks, from jets and from petrochemical industry. It is very difficult, very difficult in these sectors to find easy alternatives to oil products for jets. What are you going to find in the next 20 years to have a major penetration and taking jet fuel out? What are you going to find in petrochemicals complete taking the oil out? Trucks – ladies and gentlemen, today one-third of the global oil demand growth, entire oil demand growth, comes from the trucks in Asia, developing Asia, which have almost no efficiency standards. One-third of the global oil demand growth comes from the Asian trucks. So therefore, we believe to say oil demand is going to peak very soon, from our humble point of view, may be on the – from oil perspective – on the pessimistic side, so therefore we have a different view than those who say that.
One word about the oil demand growth. It is coming from – mainly from China, India. But Middle East is also a driver of the global oil demand growth itself. When we look at the last five, six years, Middle East follow just China in terms of being an oil demand growth center.
Two reasons: one, poor efficiency of vehicles, cars, driven by the lower oil product prices; and second, one-third of the oil demand is today used in electricity generation, which is economically, I believe, not the right step because the marginal costs of oil from electricity is about $75 per megawatt-hour, which is significantly higher than solar and others. So therefore, these are the two areas to look into.
Now, let me finish slowly my words talking about LNG. I mentioned the beginning that we see the LNG becoming the major gas trading way, overtaking pipelines. Why? Huge amount of LNG coming from U.S. and Australia, follow – and these are projects which are about to finish; some of them are finished already – will soon follow by Canada, Mozambique, Tanzania and other countries.
And this is changing many things, such as the LNG contracts: flexibility, the destination clause, the pricing and also providing more flexibility to the markets. This is extremely good news from a flexibility, gas security point of view. But of course, you need to be able to make the most out of it.
I believe Europe, the region which puts a lot of emphasis on gas security, may well be missing this very important opportunity. Last December, ladies and gentlemen, last month, gas from exports to Europe reached a historical high of 180 bcm. We have never seen such a high of gas from – to Europe. And it is happening when lots of cargoes from U.S. and Australia are looking for destinations. And when – it is happening when Europe wants to diversify its gas imports, as they have stated a few years ago. Therefore, having LNG in the markets is something – to be able to make use of this second revolution, LNG is something else.
Finishing by coal: When we say coal, it is basically China. Fifty percent of the coal worldwide used in China today. But in China, we see that the trends are changing. Last two years China’s coal consumption started to decline. And I can easily say that the golden age of coal in China is over. It may still increase, but those increases which may happen in the future will be bumps in the trends. The huge increase we have seen in the last couple of decades, it is over.
And this is mainly driven by air pollution concerns rather than climate change. Plus, Chinese government is putting a lot of emphasis on renewable energies, energy efficiency and nuclear power. Coal will still be a major fuel for China, but we expect that the China coal consumption is going to decline.
But global coal consumption will not decline, we think, because the strong growth coming from India and Southeast Asia, huge growth, both regions. And Southeast Asia, especially it is important to note because from a(n) environmental point of view, important to note that one-third of the plants built today in Southeast Asia are subcritical plants which have the lowest efficiency and environmental standards. And they are going to lock in – when you build a power plant, coal plants or whatever plant, you have to live with it 40, 50 years. So, in terms of coal, coal industry is going to face challenges, we think, unless they are able to come up with strategies to force the cleaner coal technologies, which will be an asset protection strategy, from my point of view.
To finish, ladies and gentlemen, we think energy security is and will be a critical topic. As such, IEA will continue to have at its core mandate as the watchdog of energy security for oil, gas and electricity security. But in addition to increase the production to secure the energy, there are other ways, such as using energy more efficiently, to secure our energy supplies.
We think the new oil market dynamics and the investments being declining in a declining trend means we are entering an era of greater oil price volatility.
Huge amount of energy coming. The first wave in the next three, four years already we are seeing. And a second wave will come after that directly from, as I said, from Africa and from Canada. This will change not only the LNG markets themselves – the pricing, the contracts, the destination clause; it will also impact on the pipeline gas, and it is important also for the gas security worldwide.
Renewables growing very strongly, led by solar and wind. And the next chapter is to make renewables growth, in addition to electricity generation, make them grow in heat, for industry, home or transportation sector. And also, to have the right electricity market design will be critical.
And finally, finishing with Paris again, where I came this morning here, it is very important how the NDCs, the pledges made are translated into concrete national policy actions backed by financial or regulatory measures. Otherwise, having Paris Agreement is an excellent step for all of us, but it is by far not enough to change the trends themselves.
Once again, let me thank the Atlantic Council for inviting me to give me the opportunity to share my views with you. Thank you very much for your attention. Thank you. (Applause.)
MR. KEMPE: Fatih, once again, you have demonstrated why you are the rock star of energy conferences.
That’s absolutely fascinating. And it does underscore why we have chosen as our theme the geopolitics of the energy transformation because you see how dramatic the transformation is, and that’s why we spend so much time looking at the geopolitics of that.
We’ve got about 11 minutes for questions before we have to board buses for Masdar, a tour of Masdar, and break up. Let me ask a very quick opening question and then try to get in as much as we can this short period of time.
You’re talking about oil price volatility, et cetera. Could you comment on something you and I have talked a lot about over the years, which is OPEC? And give us your assessment of the current deal and its durability and the renewability, et cetera. We’ve talked a lot about that at this – at this forum.
MR. BIROL: Thank you, Fred. It’s a tough question in front of the distinguished minister here and many of colleagues of mine and – being a former OPEC worker myself.
Now, OPEC decision is something very important initiative, first of all. I would like to say what I would expect the implications impact of the OPEC decision, if the agreement is fully implemented.
If agreement is fully implemented, I see at least three important impact. Number one, if the prices remain 55-60, we will see a strong move from shale production in United States. Number – last December the new rigs, rig activity, four to eight new rigs, which is the highest addition since April 2014, 2 ½ years almost, as a result of price increase, about 8 (dollars), $9 we have seen. So first indications are that we may see more oil from years to come, number one.
Number two, there are some countries – China. China is a major oil importer, but China is a major oil producer as well. Chinese oil production declined half a million in the last 1 ½ years because of low prices, and China had to import a lot of oil. But prices coming to about 50, 60, that trend, declining China’s oil production trend may well be reversed. Therefore, China may well – or countries like China – less oil, number two.
Number three, demand growth. We have demand growth in the markets today of 1.2, 1.3 million barrels per day. In a higher price environment, demand growth may be weaker than in a lower price environment. Again, when I look at United States, last month – last two months, in fact – we see a reduction in the gasoline and diesel as the prices went up, gasoline and diesel prices.
To sum these things, all of these three factors – more shale oil; more oil from the smaller producers, China, Colombia and others; less stronger demand – may well mean that the higher prices as a result of the agreement, if implemented, may well provide more oil in the markets, and we may well see the higher prices – I don’t know how high they will go, I have no idea at all – but there may be a push from the markets balancing it out.
MR. KEMPE: OK. Thank you very much. Questions from the audience. Please, let me pick up here and here. Let’s pick up these two questions.
Q: Thank you very much for your very informative presentation.
MR. KEMPE: Hold on.
Q: And I come from Johns Hopkins University.
My question is related to LNG. And you’re talking about LNG from Australia, U.S. and Canada would provide more flexibility to the – to the market. And my question is actually related to Asia. Could you share with us, you know, how bad is going to shape the configuration of natural gas trading in Asia and, you know, the emergence of a possible natural gas trading hub there? Thank you.
MR. KEMPE: Thank you. And let me pick up one more. Please. Did I see one other question? Yeah. Here we go.
Q: Hi, Fatih. My question is whether, if you look at the IEA projections that you just talked about to 2040 with respect to use of coal, oil, gas, renewables, et cetera, whether IEA has done an estimate of what the emissions, CO2 emissions, impact of that would be, and how that compares to the rough budgets that people talked about when they talk about holding temperature increase to 2 degrees – because it would seem to me that it would be way above that.
MR. KEMPE: And then we’ll take a last question I see in the back. Well – I’ve been told we really can’t go over, so let’s just pick up that one and come back.
On top of the coal question, I would add in parentheses, have you taken into account potential breakthroughs in coal technology? But question in the back.
Q: Hi. Faruk Faruk Ak, senior economist, Crescent Petroleum.
In the November edition of the World Energy Outlook, you were mentioning about the possibility of the lack of supply, or supplies-demand mismatch by 2020, if there isn’t enough investment or the spending cut in upstream continues. But there are a couple of developments or positive developments, the OPEC agreement, for instance, or some positive views. Do you – do you still see the possibility or strong possibility by 2020 for the supply-demand mismatch?
MR. BIROL: He’s a friend, so I have to get to the question as well.
MR. KEMPE: Fatih friends get included despite the fact we came to the end. (Laughter.) Please. Last question. Where was it?
MR. BIROL: It was –
MR. KEMPE: It’s right here. There we go. Yes.
Q: Rahim Fahmi (ph) – (inaudible). Thank you, Fatih, for your valuable presentation.
Do you think that – the investment in last couple of years, we have seen FIDs already signed in oil and gas. There is a Mediterranean huge investment now in Egypt and then Cyprus, Lebanon, and also in Angola; there is one project, FID, $13 billion just signed in Angola and will add production 300,000 oil after a couple of years. So still, there is a huge investment that’s coming in FID. Just a remark about – you told this year there is no FIDs and last year – we have some proven data about FIDs signed, and also in the gas there is huge investment now as almost $30 billion in Mediterranean Sea as well. Thank you.
MR. KEMPE: Please.
MR. BIROL: Fred, how many minutes I have? Five minutes?
MR. KEMPE: Yeah. Three to five minutes.
MR. BIROL: Three to five minutes – four. OK.
Start with LNG. Now, in Asia, there is a – the situation of LNG is so that it is squeezed between cheap coal getting cheaper and government-support renewables. So the life for LNG energy is not so easy. But the fact that lots of energy is coming, and the prices are now being on the very modest side, I expect that the gas-importing countries in Asia have a wonderful opportunity to have good negotiations and contract terms with the exporters. It’s a golden opportunity for Japan, for Korea, for — there are five, six new countries who just started to import energy, like Pakistan, Vietnam and others; there is a good opportunity there. And this may well be start of new contracts, new flexibility, new markets in Asia. But the governments need to be very active and need to be aware of this golden opportunity coming to them – as Australians, Americans need to sell the LNG as well, and this is a very good opportunity for them.
Second question on climate change and towards the investment: Now, the trends I show you up to now – that a lot of renewables are coming, efficiency is important, nuclear is also playing an important role – brings us to a temperature increase which is 2.7 degrees Celsius, which is significantly higher than what the scientists tell us – 2 degrees is the maximum; even Paris stated, go to 1.5 to be sure, well below 2 degrees. So the difference between 2 degrees and 2.7 degrees, which I show you now – many of you know better than me – this difference is not something that you just take your jacket off and adapt to the new life. It will have tremendous implications for the rather fragile equilibrium of our planet.
So trends, I assure you, are not in line with what needs to be reached. It is what would happen if the countries fulfilled their pledges in Paris, which is that pledge – every country made a pledge, 190 countries – those pledges are not necessarily bring us to a 2 degrees trajectory. So much more needs to be done. More renewables, more new technologies – coal, for example; carbon capture and storage, very important technology – but at the same time not much appetite, to be very frank. So they all need to be deployed much more than what I show you if we are serious to reach 2 degrees.
Plus one moment about investments. Now, oil and gas is a bit different. In the gas LNG, last year there was only one FID, in Indonesia, OK? This is just to bring it to your attention – the gas coming LNG from the previous projects. Now, for oil, yes, we are seeing some answer to the price increase after the Algiers and Vienna meetings. But this is, in my view, far from being satisfactory for me to be able to say that in two, three years of time, supply-demand gap will be minimized or nullified. Still, in my view, we have to see major, 2017, major new investment if we were to comfort the markets in the two, three years of time. Otherwise, that supply-demand gap will be with us.
The fourth question, along the same line: Yes, there are some investments in smaller producers. But to be able to nullify that gap between supply and demand, we need major, major investment in 2017. And currently 2017 investment numbers are not even showing a rebound after ’16. So we may well see even a third year of decline in the investments if no new major decisions are taken. As such, there is an important role, Fred, for the countries like United Arab Emirates and all the other producing countries here to continue to be responsible suppliers and secure the world with oil, which is the most strategic commodity we have today.
MR. KEMPE: Absolutely fantastic, Fatih, and wonderful questions from the audience.
Three announcements before we thank you for this terrific session. First of all, please wear your credentials at all times. Second of all, those that are attending the tour of Masdar City – and if you haven’t done this before, I really urge that you do – the buses are really departing immediately, so 11:25, and so please meet in the lobby; go directly there. And then finally, the next session is at 2:00 entitled “The Energy-Water Nexus.” And then last but most important, thank you, Fatih. That was a fascinating presentation. Learned a lot. And thank you all for staying through and asking your good questions. Thank you, Fatih, for all. (Applause.)
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