welcome back this is our t.v. live from moscow and here's a recount of all the top stories police crackdown on anti-government protesters across america failed to solve their spread of the securities the demonstrators in the heart of the occupy movement out in the cold police have confiscated power generators and gas heaters for protesters camped out in new york as temperatures hit subzero. a stern warning from the arab league it's call we have syria to stop the bloodshed as dozens of civilian deaths are reported fresh and government crackdowns in the lead syria committee is due for another round of crisis talks with damascus. and history repeating itself the man who built the biggest national pyramid of russian history factors old tricks after serving time for robbing millions of their savings all this time his sides are set on investors if ukraine.

now we know oil won't be around forever but as our energy demands rocket not supplies are doing that spotlight now asked how we might go that's next on our. hello again the welcome to spotlight paying for the share our take time how do you know are going to name my guest on the show is richard. according to the international energy agency the surging and rigid when it will most likely lead the world to a drive. for reserves are running out faster than expected and the growing fuel consumption raises environmental concerns but this tripe all the warnings people continue burning poil and or time the promising alternative energy sector is still

unsufficient be developed so what's to be done to avoid bad diet future without dramatically changing our way of living and maybe russia could help with that we're asking the deputy executive director of the international energy agency richard. the international energy agency says the world is entering the golden age of gas with production to rise by eighty percent of the next twenty years russia's going to sheeple were a hundred and ten billion cubic meters of gas to europe through its south and north stream pipelines the construction of south stream is starting soon and old stream will start operating in early november the trans underneath the baltic sea and delivers russian gas directly to western europe this is meant to improve european energy security and we can expand and contract the country.

michel thank you for having me it's a huge thank you very much for me for being here well over the international energy agency the i.a.e.a. has signed new carpet ration agreements with russia why. you in these weakness can you claim a couple wouldn't. it's a good question but. basically we're continuing the evolution of our cooperation which is going on for many years but in particular the focus of a coming will be more and more on energy efficiency which is a very important objective for russia not only will it allow russia to adopt new more modern technologies will be and benefit for economic growth in russia it will give you more resources to add to your exports so i think it will be a win win for russia and for the international community because greater supplies of russian oil and gas will mean greater energy security for the rest of the world well we like talking about energy security security. especially spirit of demand

but also the security of supply there anyway when you talk security of supply security at the moment we mean that there is a contradiction between the consumers and the suppliers do these new agreements at least try try to to overcome these countries yes in a way because one of the main components of the agreement is that we work more closely together and we figure we can learn from each other particularly in improving our market forecasts and this year's world energy outlook which is coming out in just a few days now in fact our executive director will be in moscow on the eleventh of november to present it just two days after that after the worldwide launch. it benefits greatly from cooperation with russian experts we did a special chapter of actually special section focusing on russia and in preparing that i mean the judgments are all our own they have to be put in preparing that

that section we relied very much on conversations with the russian officials and executives from a variety of private companies and. well in russia richard since you've mentioned the forecasts well according to one of your forecasts of the i.a.e.a. i quote despite concerns about the state of the world economy while demand will rise by one point three million barrels to ninety point five million barrels a day in two thousand and twelve next year what keeps the demand so high despite what's happening in the world the simpler answer is that there is a crisis in part of the world and the other part of the world that continues to grow and the part of the world is continuing to grow has a high marginal demand for oil products so all is continuing to grow and why is that because they are getting rich enough to buy cars in china and india and so it's transportation in those two countries which is

a major part of the incremental demand in fact in o.e.c.d. countries the developed world where there is an economic crisis you may actually see declines in the use of oil yeah and consumers in any young growing economies they like big cars. very gaskin c.m.e. . their baby is advancing about savings and we just hope they buy more efficient cars that at this stage in their development in our country had available what's the forecast for for oil prices we know we don't well we don't we don't forecast. we what we do is we base our projections for short term prices we use basically the future price that's available in the market we just assume that the that the people that are in the financial markets know better than we do what the price might be in the future and so we just use the future strip as we call it the different prices for different time periods as as the work our working assumption on prices and then we figure out some point a man from that rather than trying to forecast price well let's talk about libya

libya produced one point six million barrels of oil a day right now production fell dramatically because of those civil war everything going to come. route to only ten thousand a day sometimes barrels a day which is the if i'm not mistaken the figure fell last month what does it mean for the world market they will be able to what was a considerable source of fuel was yeah i mean the problem with oil of course is that it's a very inelastic fuel price unless the has low small changes in supply mean big changes in price and that's basically what we saw in that period and because of that one point six million barrel of a shortfall in would be in production and most libyan production was exported so as of about a sort of fall of one and a half million barrels a day on the world markets alone and especially if it's because the issue of the shortage was prolonged i mean it really libyan exports went to about zero in march

and so that's now been you know we're going on seven months now and they're recovering a little bit they'll be it will be higher this month and by the end of the year they could be between four hundred and six hundred thousand barrels a day but even by june we estimated that over one hundred thirty million barrels have been taken out of the market and that has to come from somewhere either it either it comes from from a declining stocks either commercial stocks or government stocks or it means command is lower than it would have been otherwise and why is that because the tightening of the market raises the price and so the price means some some people that would have bought oil by less oil. well ok but i don't know if it's savings if you go but it doesn't mean it may mean lower economic you know but nobody's nobody even considering trying to use to teach you cruisers really what we did use them i mean we used them in june and. we think that at present prevented

a price spike at the time because it helped to supply the market we released sixty million barrels. thirty eight million barrels of a. it was from government strategic stocks twenty two million barrels was released by allowing companies to hold less stocks companies have kind of like a bank has a reserve requirement companies sometimes are required by governments to hold stocks so release those who we relax those requirements some countries did and other countries sold oil into the market out of their strategic stocks and that that release was very well received by the market more than thirty more than ninety seven percent of the thirty eight million barrels that was offered from strategic stocks was picked up by the market and by the way that oil was sold at market prices so if we weren't trying to undercut the market we were just trying to supply the market at the prevailing price well you mentioned that libya is starting to

regain its previous production but now it's ten thousand talk maybe about fifty thousand or know five hundred thousand five hundred thousand not one point six million so how long will it take libya to to regain its we're at one point six it is the possibility is what it's right and should do yeah well nobody's short answer is nobody know it's there and of what we've been saying is it will take many months even though they did destroy them this trading is nil but there is some damage there is some damage and it has to be recovered and oil fields you know they can be damaged. you know just if they're neglected so we you know the damage needs to be assessed to the infrastructure to the fields but i'm cautiously optimistic that to the oil fields could come back on. by the end of next year but i don't want to make any such predictions simply because we dissed don't have enough information at this

time so if it's going to take a while and one of the reasons why we now think we can get by with lower amounts is because it is ramping up a little bit also there were some other small outages around the world that have now. corrected but the main reason is that demand is weaker than we thought it was economic forecasts are going down and so we're and we're not the only ones forecasters around the world are revising downward their assumptions or their forecasts for demand not only for this year but fortune thousand and twelve as well so we think the market will stay in relative balance but. it's it's not going to be a good. year for the for the oil industry i think well actually if we talk in general about the arab spring it certainly. was welcomed by politicians in the major democracies we saw hillary clinton out the news she was when she saw the picture. of the last set of to take the lead being massacred and

yeah he lives just the other day but the work it wasn't so much happy about that it's pretty was it well if it did disrupt the market and but you know markets can be disrupted in many ways in and. you never know where it's going to come from i mean the last time you stocks it was because of a hurricane. you know the first time we used docks it was because of international aggression this was because of civil civil dispute. in nigeria they've had a lot of problems with sabotage the pipelines of people trying to steal the oil. and it's also related with with civil problems there so there's there's just you never know where it's coming from but you do you need to always be. on guard for these kinds of disruptions and that's that's one of the reasons that the i.a.e.a. was created says richard jeni stepanek executive director of the international.

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welcome back to spotlight i'm al goodman just a reminder my guest on the show today is richard jens deputy executive director of the international energy agency richard roth let's talk about about russia's policy well there's lots of talk about the red direction gradual red direction brushing crude. flows from from the west towards asia and first of all to china how was it seen in the west could it be a reason for for a clash of interests between russia and the west china and the west no i really don't think so and the simple reason is that it's a global market these days market is is a worldwide and. china is where the action is that's where they're

growing in consumption china and india are the two primary and the middle east where course they have their own oil so i think it's fully understandable in fact we had always city or oil demand will actually decline so it's a natural process china has the demand they're willing to pay the price as they get the oil. according to the latest. report i quote the world faces a dire future unless a complete change of course is made to deal with the huge problem of surging energy demand and quit what does the are you eat a suggests doing in over the avoids the future well i mean you're talking about a dire future in that in the event of surging demand for fossil fuels i mean energy is life as population increases economic activity increases and even though we all hope that our ability to work user energy efficiently improves over time we know

that rising a rising population as long as that happens means there's going to be rising energy demand the key question is how we supply to satisfy that demand right now our energy mix in all countries are. almost all countries is heavily focused on fossil fuels and it is a concern there is that fossil fuels are first of all they're there are supplies limited nobody knows when we'll run out but everybody knows that it's a fossil resource and therefore is limited in supply it took millions of years to create the oil and it's going to go away and in hundreds of years so it'll it'll in sunday also it's a dirty fuel. production of oil and gas can be dirty consumption of it is certainly dirty in terms of normal air pollution but particularly i think what we were warning about and that particular passage is that it is the prospect of climate change well speaking about again as well actually purchased so specially the

russian people from gazprom they say that they of course say that gas is more climate friendly than or oil. production and consumption of gas so the i.a.e.a. also says i quote that the world was potentially entering a golden age of dance with production set to increased by over fifty percent right twenty thirty five well do you think that that really guess is going to replace or they and it will be good for you for a climate for the gas competes more and more properly actually with coal then with then with oil because because gas is used for power generation and in industry and knows and always uses it and if you are simply near the company it's much cleaner than coal and not only in terms of the normal air pollution that you think of but in in the key area of emissions of carbon dioxide. natural gas and emits far less

about half as much and by energy value is called us so it is a much cleaner fuel then and coal and we sometimes talk of natural gas as a bridge bridging fuel because it can help us while we're still dependent on fossil fuels reduce emissions and. we have the capability of relying more on the advanced technologies that renewable sources of energy and so on that are better not admitting at all but. we can't rely on natural gas indefinitely because even natural gas doesn't meet some c o two and so over time or energy demand will grow to the point where even natural gas could lead to global warming and that's why we talk about it as a transition for why i mentioned this quote for the i.a.e.a. report is that. we give the impression that he really remains rather skeptical about such things as that is as the renewable sources of energy this is why you're depending on yes only your forecasts not based on an on the existing

series for well first of all there are scenarios and this scenario has certain certain assumptions and one of the assumptions is that the consumers will welcome gas and that's that's very important right now gas is undergoing a renaissance because the prices come down but is demand increases the price will also increase and there are then there will be a rebalancing of markets so. but you know we're it's not that we're skeptical of renewables it's that we just do the arithmetic we recognize that many countries particularly in western europe but other countries around the world including china have have targets for instance expansion of their renewable industries we feel that they are committed honestly committed to honoring those targets in the middle do so but we also know that there's a tremendous amount of investment in the existing system and no country is going to give up that capital stock before it's time it would just be you know none of us

are rich enough that we can afford just to throw away perfectly good equipment and that's one of the reasons that we sometimes worry about what we call technical technology to lock in that if it's a coal plants built today will be around for fifty years and so that's why. we think it's very important for countries that are serious about this to soon. begin and to to actively support the expansion renewables but we just look at at the size of the of the industry and the amount of the book the bottlenecks that exist and we figure that it would be very good if for a new balls to expand say at an average rate of ten percent a year and given the small role they play now that means it's going to take a long time before they dissipate place fossil fuels it's just a written take where we're very soon the november eighth actually going to be put in it will be so the breach in the launching of this i think is favored project the new a three project which will add a load the first gas supply from russia. underneath that not to say you. know this

is this is really a great project well what do you think is the prevailing the prevailing sentiment in your sentiment in europe because of the one hand people want to want an interrupted supply from such as steady supply to be sure in the supply but on the other hand they are worried about the growing dependency. on gas and says i wish i wish that we will be prevailing well i think i think you you cash it very well. they appreciate russia as a supplier and i think most europeans think that russia has been a reliable supplier over the years in recent years there because of the. issues with ukraine there's been some nervousness and but i think anybody who looks at the tate a will realize that yes russia is dependent on mean yes europe is dependent on

russia for supply but russia is also dependent upon europe for demand cash yeah and in fact russia has a smaller share of the european market then europe has of russia's exports so you can say. that russia is more dependent on europe than europe is dependent on russia except the one forgoes money if it doesn't make the sale the other for goes heat and in the winter time you'd rather have money so the important thing though is that they have to work together. you know no no commercial. transaction takes place unless it's beneficial for both the buyer in the seller and that's the key well i guess most of the people especially the politicians the businessman in you know they understand that what you say is that is that in case of mutual dependency you read dependency is just how often the problem you are part of is the bed in the face is the other half of that this may have brought you know there's a there's a joke in united states that if you owe the bank thousand dollars you can't pay

it's your problem if you owe the bank a million dollars and you can't pay it's the bank's problem right so but why then europe isn't so happy about it's about the sound stream project why isn't your pretty ready to throw its weight would be. one of the answers we get here in russia is it because the ukraine is lobbying against this russian project. and i'm not aware of any particular ukrainian lobbying on that score but i suppose it could be true i don't know. i'm just not a position where i would know about that but i think the main reason is normally when we look at increasing your security one of the simplest ways to do it is increase the debt to receive your sources of supply and that can mean diversifying the routes from the same supplier because sometimes there is an interruption of a single route but the supplier will be perfectly happy to supply from another route but it's also diversifying your suppliers and there's

a whole host of countries in that southern area that are potential suppliers of gas to europe. particularly the caspian states but also countries like iraq in the future could be potential so there is a european i. idea of developing what they call the southern corridor and the i.a.e.a. looks favorably on that but that doesn't necessarily have to come at the expense of other other projects we we don't endorse any particular commercial projects but we do look at diversification in the southern corridor which is an important opportunity for your to diversify and i think that's why they're looking at it went to put it into perspective in this golden age of gas study that you you mentioned we see basically an increment in european import demand because their production is declining even though their demand isn't growing very rapidly there import demand will grow on the order of two hundred twenty billion cubic metres per year. over

the next twenty years that to put it in perspective that's equivalent to about six pipeline projects maybe a dozen large l.n.g. plants so there's plenty of room eventually for all the projects we're talking about today is just a question of of the timing i was the ambassador american ambassador in kazakhstan when we were working a buck and that's what i tried to explain to people there that you know it was not directed against an expansion of the c.p.c. line. i told people that will eventually have both and here it is eleven years later and we have the baku jape pipeline and the c.p.c. expansions and it's been approved so i was right and i think that's what will happen in the gas area to future thank you very much for being with us was a pleasure having you on the show and just to remind you that my guest today was richard jeni stepanek things that could director of international energy and that's not far from all of us if you want to have your sales profit or maybe have someone

in mind you think i can see the next time there's a drop me a line. out to be done. and let's talk like into the movie back with more faith and common thought about feelings in and outside of russia until then our team and the. thank you you thank .

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