1) The document summarizes key topics discussed at the G7 Energy Ministers' Meeting including the growth of US shale oil production and lower costs, the need to sanction new oil projects to avoid market tightening in the early 2020s, increasing role of LNG in global gas trade, integrating more renewable energy while ensuring grid security, energy savings from efficiency measures in G7 countries, and flat global CO2 emissions in recent years. 2) It concludes that energy security requires a broader approach to reflect changing gas and electricity markets, more work is needed on integrating renewables and their use beyond power, and energy investment choices will impact security, sustainability and jobs for decades.

1. G7 Energy Ministers’ Meeting
Dr. Fatih Birol
Executive Director, International Energy Agency
9 April 2017 – Rome, Italy

2. © IEA 2017
US shale oil production
US shale oil has shaken up global oil markets…
US shale oil has surged in recent years and can continue to deliver impressive growth,
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
mb/d

3. © IEA 2017
US shale oil average cost
… and is now resilient at much lower prices than before
US shale oil has surged in recent years and can continue to deliver impressive growth,
reflecting the enormous cost savings & technological improvements made by the industry
20
30
40
50
60
70
80
2008 2009 2010 2011 2012 2013 2014 2015 2016
$/b

4. © IEA 2017
Following the record 2-year investment slump of 2015-2016, we may see oil markets tightening
by the early 2020s unless companies start to sanction projects without delay
-0.5
0.0
0.5
1.0
1.5
2.0
mb/d
Changes in oil production capacity 2016-2022
Non-OPEC OPEC
Oil supply growth over the next 5 years led by US, Brazil & Canada

5. © IEA 2017
Share of LNG in global gas trade
2015
695 bcm
2040
1 150 bcm
2000
525 bcm
LNG
53%
Pipeline
Pipeline
LNG
40%
Pipeline
LNG
26%
A 2nd natural gas revolution is changing the gas security equation
A wave of new LNG supply, led by Australia and the US will improve the ability of the system to
react to potential demand or supply shocks, but security of gas supply cannot be taken for granted

6. © IEA 2017
Better grids, more flexible power plants and storage & demand side response will be needed to
integrate larger shares of wind & solar in a secure and cost-effective way
Renewables are growing throughout the G7, but new challenges are emerging
0% 5% 10% 15% 20% 25%
United States
United Kingdom
Japan
Italy
Germany
France
Canada
% of wind and
solar in 2010
% of wind and solar
in 2016
Share of wind and solar in total electricity generation

7. © IEA 2017
Efficiency measures saving energy in the G7 but more could be done
Efficiency measures introduced since 2000 saved G7 countries 15% of their energy demand in 2015;
Just as one example, tighter standards for household appliances saved 100 TWh of electricity
Energy demand in G7 Countries
0
1 000
2 000
3 000
2000 2015
Mtoe
Efficiency
Savings

8. © IEA 2017
Global energy-related CO2 emissions
5
10
15
20
25
30
35
1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 2015 2016
Gt
IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even
though the global economy grew, led by emission declines in the US & China
Global CO2 emissions flat for 3 years – an emerging trend?

9. © IEA 2017
Closing remarks
• While a continued focus on oil security is essential, a broader approach to energy
security is needed to reflect changing nature of natural gas & electricity markets
• The next chapter in the rise of renewables requires more work on systems
integration & expanding their use beyond the power sector
• Growing linkages between the digital & energy worlds raises important
opportunities & challenges for policy makers
• Energy investment choices will impact security, sustainability & jobs for decades
• The IEA will continue to support all pillars of the G7 energy agenda