Section One

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to this, there is the dominance of the US-dollar as the global reserve currency and the still preeminent role of the US financial system. A failure of the US economy would have a major global impact. After the economic crisis of 2008 and 2009, the recovery in US consumer consumption was greatly supported by government-led stimulus. However, the recovery has recently decelerated considerably after the fiscal stimulus ended and after the major ‘extraordinary’ monetary supply measures came to an end. Moreover, the troubling US labour market situation shows few signs of improving. It is obvious that government-financed consumption cannot continue indefinitely and that the underlying economy needs to improve in order to stand on its own feet, but there is no clear answer as to whether the US economy is actually in a position to do so. However, it currently seems unlikely that this important motor of global growth will accelerate away at any time soon. The third major issue is the recent slow-down in developing countries, particularly the deceleration in China and India. While the global stimulus and the measures undertaken by these countries themselves have had a highly positive effect on their growth rates, these economies remain largely dependent on either capital inflows from, or exports to, developed countries. It is evident too that they have been relatively successful in building-up domestic markets and stimulating greater local demand, but they are still too weak to absorb all the capacity established in recent years. Developing countries have also recently observed significant increases in inflation that have forced them to initiate provisions to avoid their economies overheating. This has had a dampening effect on their growth rates, and it is expected that it will continue to do so. However, these countries can be expected to be a major factor supporting future global economic growth. In summary, it is evident that sovereign intervention, in terms of stimulus packages and monetary policy, has been the main driving force behind the recovery since the financial crisis began. And this remains true today. Thus, the recovery cannot be deemed to be self-sustaining at this point in time. It is perhaps important to ask a follow up to this: is it at least sustaining? In the main, this is expected to depend on the ability of governments to continue their various support measures for as long as it takes to solve the economic issues. This can be expected to take a number of years and therefore the current best assumed outcome is a below average global growth scenario, similar to the situation at the end of 2011, as reflected in the Reference Case medium-term assumptions in Table 1.1. If the economic situation worsens post-2011, however, then this may need to be further reassessed. Although this appears unlikely at present, it cannot be ruled out entirely. 35 Chapter 1
36 The medium-term economic growth rates for the Reference Case appear in Table 1.1. These are largely unchanged from WOO 2010 assumptions. The growth rates for Western Europe over the medium-term have been adjusted downwards slightly to reflect the financial difficulties being felt by some countries in the region. Average global growth over the period 2010–2015 is 3.9% per annum (p.a.). Average OECD growth is assumed to settle at just over 2% p.a., with the strongest expansion in North America. Growth in developing countries remains considerably stronger, especially in Asia. Chinese growth, although gradually easing, remains above 8% p.a. <strong>One</strong> of the considerations in developing the Reference Case has been the extent to which China’s 12 th Five Year Plan (FYP) should be factored into assumptions. The Plan includes a reduced target for GDP growth, down to 7% p.a., compared to the 7.5% target in the previous Plan. There are also moves to balance the economy, with inter alia, the service sector targeted to increase its GDP share, consumer demand to be expanded, and income distribution to become more even. It is thought that the lower growth target is designed to be consistent with the structural targets, with an emphasis upon the ‘quality’ of growth rather than the ‘quantity’. Table 1.1 Real GDP growth assumptions in the medium-term % p.a. 2012 2013 2014 2015 North America 2.9 2.5 2.5 2.5 Western Europe 1.9 1.8 1.8 1.8 OECD Pacific 2.9 1.9 1.9 1.8 OECD 2.5 2.1 2.1 2.1 Latin America 4.1 3.7 3.5 3.5 Middle East & Africa 3.7 3.6 3.6 3.4 South Asia 7.0 6.5 6.3 6.1 Southeast Asia 5.0 4.2 3.9 3.9 China 8.5 8.5 8.4 8.2 OPEC 4.7 3.7 3.7 3.7 Developing countries 6.2 5.9 5.8 5.7 Russia 4.5 3.8 3.4 3.2 Other transition economies 3.8 3.4 3.1 3.1 Transition economies 4.2 3.6 3.3 3.2 World 4.1 3.8 3.8 3.7
Page 1 and 2: Section One
Page 4 and 5: Chapter 1 World oil trends: overvie
Page 6 and 7: Box 1.1 Regulatory reform in the en
Page 8 and 9: commodities, the OTC market also in
Page 10 and 11: IHS CERA upstream capital cost MOVE
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Page 16 and 17: Although these reduced growth targe
Page 18 and 19: Global and regional population leve
Page 20 and 21: average of 67% of the population in
Page 22 and 23: Table 1.3 Population by urban/rural
Page 24 and 25: Figure 1.8 Real GDP by region in 20
Page 26 and 27: Policies The Reference Case retains
Page 28 and 29: electric vehicles, which focuses on
Page 30 and 31: Box 1.5 Shale gas: recent developme
Page 32 and 33: 40 years. While the early high perf
Page 34 and 35: Box 1.6 After Fukushima: unclear fo
Page 36 and 37: is Japan itself, which has been ask
Page 38 and 39: Figure 1.13 Fossil fuel use per cap
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Page 42 and 43: Table 1.7 World oil demand outlook
Page 44 and 45: low, and well below levels seen in
Page 46 and 47: has also taken into account the pot
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Page 54: different picture. By 2035, Annex I
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ion (millions) 7,000 6,000 5,000 4,
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88 Conventional powertrain technolo
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90 acquisition costs, and the lower
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92 Figure 2.9 Increase in oil consu
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94 rose by an average of more than
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96 Table 2.10 Oil demand in rail an
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98 Table 2.13 Oil demand growth in
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100 Table 2.14 Oil demand in the pe
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102 2.5 2.0 10 1.5 81.0 60.5 0 mboe
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104 Figure 2.15 Share of industry i
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106 Figure 2.16 Figure 2.16 Oil use
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108 Table 2.19 Oil demand growth in
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110 from 63% to 10% in Southeast As
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112
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114 In Canada, although the Outlook
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116 Non-OPEC Latin America’s prod
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118 additional supply of 180,000 b/
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120 limiting factor for feasible su
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122 Table 3.4 Medium-term non-OPEC
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124 some deposits will not be suffi
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126 1.8 mb/d in 2010, to 2.7 mb/d i
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128 Of utmost importance, in respec
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130 influences and, therefore, brin
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132 early support given to Brazil
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134 the call on OPEC crude by 2035
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136 us to cooperate to lay the foun
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138 Figure 4.1 Table 4.6 Oil supply
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140 COP-16, held in Cancun at the e
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142 in Article 4, paragraph 8, of t
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144 identifies sustainable long-ter
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146 Beyond the oil sector, there ar
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148 other international research an
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Section One

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