AOL energy IEA Releases Major Report on Iraq's Energy Resources and Potential By _Jared Anderson_ (http://energy.aol.com/bloggers/jared-anderson/) Published: October 9, 2012 The pace of Iraq's economic and social development going forward is largely tied to the success or failure of its energy sector goals, and in turn the degree to which the country's oil industry can meet its aggressive targets will _play a pivotal role in the global oil market_ (http://energy.aol.com/2012/05/11/4th-iraq-oil-and-gas-summit-2012/) over the next two decades. The (javascript:void(0);) _International Energy Agency_ (http://energy.aol.com/tag/International+Energy+Agency/) has analyzed the future of Iraq's energy industry using three scenarios – high, central and delayed – as a means of addressing the opportunities and risks facing the development of Iraq's energy sectors. The special report entitled "Iraq Energy Outlook" is part of the IEA's World Energy Outlook series. Iraq is currently the world's third largest oil exporter – behind Saudi Arabia and Russia – and the Baghdad government has signed contracts with international and national oil companies which have the potential to boost output well over 12 million barrels per day. This theoretical threshold - based on the cumulative targeted output plateaus in the signed contracts - is neither realistic, not desirable given the potentially negative price impact associated with flooding the global oil market with such incremental volumes and Iraq's role within the Opec producer group, along with numerous other factors. The IEA recognizes this and concludes that in their central scenario, "Iraq's oil production more than doubles to 6.1 mmb/d by 2020 and reaches 8.3 mmb/d in 2035." In the high case, output reaches 9 mmb/d in 2020 and exports top 7mmb/d by that date. Here are some additional eye-catching numbers and concepts from the IEA's analysis: * Iraq's oil production and export levels will largely be determined by," the speed at which impediments to investment are removed, clarity on how Iraq plans to derive long-term value from its hydrocarbon wealth, international market conditions and Iraq's success in consolidating political stability and developing its human resource base." * "Iraq stands to gain almost $5 trillion in revenues from oil export over the period to 2035, an annual average of $200 billion and an opportunity to transform the country's future prospects." * "Early investment in a challenging project to bring up to 8 mmb/d of water inland from the Gulf to Iraq's southern fields will be essential to support oil production and to reduce potential stress on scarce freshwater resources." * "Sufficient oil storage and transportation capacity will be needed to accommodate the expansion in output and diminish the risk of over-reliance on the southern sea-borne route." * "Iraq becomes a key supplier to fast-growing Asian markets, mainly China, and by the 2030s Iraq is the second-largest global oil exporter, overtaking Russia." * "Gathering and processing Iraq's associated gas – much of which is currently flared – will be a vital step. But associated gas, alone, will not be sufficient to cover Iraq's projected demand, which exceeds 70 billion cubic metres (bcm) in 2035 as gas becomes the main fuel for power generation." * "We estimate that Iraq needs 70% more net power generation capacity to meet demand fully." * "Over the period to 2035, Iraq needs to install around 70 gigawatts of generation capacity and move away from a predominantly oil-fired power mix to more reliance on efficient gas-fired generation: without this transition, Iraq would forego around $520 billion in oil export revenues and domestic oil demand would be more than 1 mmb/d higher in 2035." * "The annual investment need is highest in the current decade, at more than $25 billion per year on average, a significant step up from the estimated $9 billion invested in Iraq's energy sector in 2011." The Role of Renewables * "...potential for new hydroelectric plants, two of which – the Bekhma and Badoush dams on the Tigris River – saw the start of construction during the 1980s, but work was abandoned in the wake of the sanctions imposed in the 1990s." * "The Ministry of Electricity has a number of off-grid solar research stations, with capacity of a few tens of megawatts (MW). Despite the strength of the resource, grid-connected solar electricity generation – either through photovoltaics (PV) or concentrating solar power (CSP) – will remain a very high-cost option, compared to fossil fuels. Our Central Scenario assumes a small amount of solar PV capacity – less than 50 MW – is added by 2035." * "Our Central Scenario does not assume any large-scale development of wind or biomass resources during the Outlook period, though international collaboration could help to change this picture." -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
