World Energy Outlook 2006

would be needed (over and above those in the Reference Scenario) and
calculated cost savings from reduced energy consumption. Greater attention
has been given to China, India, Brazil and other developing countries.
The focus of policy-making has shifted in the past two years towards energy
security in response to a series of supply disruptions, geopolitical tensions and
surging energy prices. Notable events have included hurricanes in the Gulf of
Mexico in 2005, the Russian-Ukrainian natural gas price dispute at the
beginning of 2006, civil unrest in Nigeria, nationalisation of hydrocarbon
resources in Bolivia, sudden changes in the investment and operating regime in
Venezuela, the closure of the trans-Alaskan oil pipeline in August 2006 and
persistent unrest in parts of the Middle East. New measures to improve energy
efficiency, to promote indigenous production of fossil fuels and renewable
energy sources, and, in some cases, to revive investment in nuclear power have
already resulted. Although heightened energy insecurity has been the
principal driver of these developments, their consequences for greenhouse-gas
emissions invariably guide the design of policy responses – especially in OECD
countries. Indeed, the primary rationale for many policies on the table today
is environmental. The scope and types of policies analysed in the Alternative
Policy Scenario reflect these twin priorities.
The structure of this Outlook reflects this analytical approach. It comprises
three parts. Part A presents the results of the Reference Scenario, including the
key assumptions, an overview of global energy trends and detailed projections
for each of the main energy sectors: oil, gas, coal and electricity. Part B presents
the results of the Alternative Policy Scenario. An overview of the
methodological approach and global trends is followed by an assessment of the
cost implications of the policies analysed and the detailed results by sector. A
separate chapter discusses the hurdles to government action and goes beyond
the Alternative Policy Scenario, looking at the additional policies and
technological advances that would be needed in order to stabilise energy-related
carbon-dioxide emissions by 2030, and longer-term prospects for technology.
Finally, Part C looks at a number of pertinent issues: the impact of higher
energy prices, current trends in oil and gas investment, prospects for nuclear
power and biofuels, energy use for cooking in developing countries and the
energy outlook for Brazil – the largest economy in Latin America, a growing oil
producer and a leading supplier of biofuels.
50 World Energy Outlook 2006
© OECD/IEA, 2007