Good afternoon im senior fellow at csi National Security program and it is my great honor to welcome peter for the International Energy agency who is here to launch it has been more than a century but the future use under quite a bit of scrutiny. With that deployment of renewables but putting quite a bit of pressure so the iea is the signature publication with the cold Market Report this provides comprehensive analysis of recent trends and forecasts not only with supply and trade at the local level but regional wet level as well peter is here to walk us through those Key Highlights and essentially help us understand what is happening and where the markets are headed to in the future 2022. And through 2016 in his current position ahead of the gas and Coal Division and previously between 1998 a senior electricity policy advisor between at the regulator at that canadian province most recently as the Vice President for Consumer Protection and industry performance. 1989 an Energy Policy advisor at the minister of energy. With my great pleasure he will speak 20 or 30 minutes then i have a couple questions and some discussion and open the floor for questions and answers. Good afternoon everyone it is a pleasure to be here at the center for strategic and International Studies for the United States launch for the call report 2017 hour analysis of the markets and the forecast through 2022. Two. Our global launch took place earlier today the first time we have launched a major iea report in india as it became an associate member of the International Energy agency earlier this year. Thank you to csis for the work done with this event as jane mentioned cole has played a big role in the Energy System and it took through 1910 the consumption of coal to reach 1 billion tons per year to get from 1 billion tons about 3 billion tons took nearly 90 years in part we increased oil in the 20th century. To get a 3,000,000,005,000,000,000 in 12 years just with the big expansion but since 2012 and 2013 demand plateaued and demand has been dropping and in fact last year marks the largest twoyear drop we have ever seen in cool demand. Unlike the previous occasions this occurred during a period of Global Economic growth. Also the third and second of year the consumption in china occurred that is not surprising with the source of the increase. It is also worth noting unlike many areas it is driven by consumption that it actually grew during this period. It is very much a Power Generation story away from coal to gas which is cheaper so these two large coal consuming countries have significant progress but also europe dropped so with these cool users reducing demand, india contributed to the growth by Power Generation demand so with this drop in 2017 we see a rebound the u. S. May have a little bit of growth but it is flat and also supported higher prices throughout the year. So was what we see in 2017 a trend or a blip . Lets find out. Let me start by talking about transformation. Accounting for two thirds of consumption. It is important to understand that Power Generation and with 2012 or 2016 with other generations this first chart is United Kingdom probably the quickest transition from coal generation the culmination of the decline of the old coal fleet with new environmental regulations, and last but not these and next are 18 pounds per ton forces the closure of some coal plants. Going from 40 in 2012 down to less than 10 in 2016. Turning to the United States you will notice a different scale as a factor of ten. Certainly natural gas has hit drop but since 2012 we have have seen a drop of 275 terawatts hours of coal electricity come in 2016 but also by renewables that has grown considerably. Adding into that demand is very weak. So going back ten years ago which is close at 50 now is 30 and last year Gas Generation accounted for more of the electricity supply. But next, germany note the scale that in the german case we have a different situation it is interesting to compare germany and the u. K. There is a big growth of renewables but there is no corresponding shrinkage. A couple of factors to explain that is a demand increase and second, Gas Generation decreased in germany over the period. Means more nuclear and more natural gas and the generation mix. The power has been bigger than them. Then the others combined. As a result, coal generation has increased during this time. We see four Different Countries and stories with different impact on cogeneration. One of the common things is the growth of renewables. That will affect fossil fuel generation in years to come. Growth or lack of in these countries is not the whole story. The reality and electricity access and main developing countries thats different than the more developed countries and different from china. If we combine bangladesh, pakistan, india, as the first four cross their, their more than 2 billion people there. The per capita consumption is rather low, averaging about 100. Thats already low compared to what you see in china. Thats already above the global average. But lower still when we compare the average of the oe cd countries. We did not put the u. S. On this chart. Because the u. S. Capital perk consumption is literally off the chart. So it is possible and even likely that developing countries will not reach the oecd level even in the future. They will probably follow less energy pathway. But no doubt it will increase with economic growth. While we remain optimistic in the future role of natural gas and some of the countries, coal will supply a significant share of the growing electricity needs. Lets take a look at prices. This chart will plot prices in europe that has the most liquid coal price index. After long decline the coal prices by early 2016 futures market has a outlook. They anticipated the prices will continue to fall. Reality is different. A large part of this was supply in china which push prices up and increased demand. After decline in the First Quarter 2017 prices have been moving up again. Its one of the main reasons, well talk in detail about that later. Heres part of the explanation and influence in prices going forward. Since nearly half of the call is produced in china the policy on coal will be very important to the world coal markets. The government its defined in three areas, the green area which is their comfort zone if the price for chinese coal moves in that range, they are fine with it. When it moves into the blue strip above or below then they say they will monitor what moves into the red they feel action is required. To plot that over the next three years you can see the discomfort they would have felt in 2015 and 16. They took action to limit supply, limit the working hours of minors i met push the prices up a little high. Prices since then falling down and an outer the upper end of the range and certainly something we think will be an important factor influencing prices in the future. As we plot the northwest index you can see good correlation between the two. Let me briefly mention the coal prices and the volatility in the last year and a half. Thats newcastle, the australian hard coking coal. The world depends a lot on queensland coking coal. More than half of the global experts are cu exports are comig from there. When you have weather events can have a strong shortterm impact on the coking coal price. Prices doubling in a very short time as Severe Weather events. As a result prices jump up and down. Now lets turn to the demand supply picture. What i present to use the forecast region by region. First of all, china. In china we see a structural slow decline with annual fluctuation to meet market needs. In 2017 strong power demand growth but in the coming years we expect coal used to decline in the non power sectors as gases substituted for coal in residential and small industrial boilers. With economic changes, lower Energy Intensive growth coal demand is not likely to grow substantially. So now five turn to india power demand growth will be robust. Despite the fact that we forecast over hundred 50 terawatt hours from 2016 to 2022. The gap will have to be filled by coal. Indonesia, vietnam, malaysia and the philippines are increasing Power Capacity in the coal generation as part of that. Now, the u. S. We see a decline driven by sluggish power demand. Growth in renewables and some growth on the gas side. The decline will be slower than we have seen in recent years. In europe coal is in a continuous decline. The e. U. Represents a share of it. This will decline. The main question about europe is to what extent that decline will accelerate. With the others which i did not mention, samuel c increases anothers decreases, canada for example. Overall there is a bit of a growth there. What we see overall is demand being flat after this years increase. When you think about it with a cold demand plateauing what this means is about a decade were coal demand has been roughly the same or stagnant. Let me talk in more detail about some of the countries. Lets turn to china. Some areas of china the growth is going to grow. There is going to see growth in coalfired Power Generation. Growth and demand for coal conversion, coal to liquids and coal to liquids conversion. Theyll be more than offset by the decline is consumption and the changes in economic factors which are leaning to less intensive growth. Also some interesting geographical implications which will affect the International Markets for. When we look at where the boilers are being switched out. The majority is in the coastal area. It is significant coal phases out the other areas the coal use that we think will be eliminated switching principally to gas. Thats not the only factor that will affect coastal consumption. A second factor comes from the construction of ultra high voltage lines. This affects coal consumption for Power Generation coal areas in the interior. In addition theyre not just going to take coal power will also be wind and hydropower. It will reduce demand in the coastal areas and thats important because that is where the imported coal goes to. We think the impact of these developments on global flow demands will be more significant another country where this is important were in port dependency is a big issues india. This shows you how Coal Production increase has been reducing import dependency. The black bars show the contribution from investing in renewables reducing coal use in india which we assume comes from imported coal. Theres a second and more important factor which you can see in the light blue bar. The second set is the production increases were seen in india as a result of reforms and other efforts to improve Coal Production. These are significant. We saw coal imports decline and we see further decline on the imports after 2022 to about 80 million tons in 2022. To do this we assume the changes that are being made will continue to be effective in increasing Domestic Production and ensuring coal is able to be delivered to power plants and other users. The return to the u. S. In particular looking at the coal capacity situation the coal capacity situation looking out at the new and retired capacity together there been no new ones coming into Service Since 2013. On a net basis which we can show they have a drop off in capacity but we see the rate of capacity retirements declining. What we anticipate is a much slower decline and coal generation the United States compared to recent years. Our reasoning is along the lines that gas prices have gotten about as low as they can go in the older and less efficient plans have closed. As a result the coal industry is a more efficient and Competitive Industry than what was a few years ago. As a consequence it will be more resilient in the future. Then we talk about trade. As you may have surmised, what we are looking at a change in trade starting with imports in 2016. We look at how they involve evolve to 2022. We look at the imports the biggest coal uses, were forecasting they will all reduce imports. However there is a lot of uncertainty about whether this will occur. China and india are big markets were these compete. China, depending on the situation imports could go up. In japan where the decline in coal imports is due to Nuclear Restarts as well as the uptake of renewables, imports would increase with the restart. Theres already 4. 6 gigawatts capacity under construction. In korea things are more uncertain. Over ten gig locks are being commissioned and that government is working to reduce coal share. If you look from the right side this is how it looks on the export side. On the export, indonesia would be seen a decrease in exports. Increasing domestic demand because more coal plants in indonesia and difficulties with cost production. They will significantly reduce their exports. The u. S. Has a very small increase, not nearly the scale were seen this year. It has enough mining capacity on the east coast and can reactive prices are right. I like to focus now on Carbon Capture. And utilization of storage. Thats because Carbon Capture and utilization has been making some progress but not nearly enough. The technology has been proven in four examples recently commissioned. First in the United States and illinois theres an ethanol facility where co2 is stored in an aquifer. About 1 million tons of co2 per year. The petronella were plant in texas captures up to 1. 6 millioe use. Quest is a canadian project which can capture up to 1 million tons of co2 and stored in the structure nearby. And ccs steel can capture 8 million tons per year. The projects have common characteristics. The cc u. S. Is installed on existing and has relatively low Technology Risk with attractive understory to geology. They exist because of coalition in public and private stakeholders. With the right approach it can work and in some cases is working. Despite these examples, progress on cc u. S. Is lagging behind another. Broad agreement among Energy Leaders in government and industry that urgent action is needed to support cc u. S. Without it the climate challenge will be bigger in the Climate Change litigation will be more costly. Thats why together with countries and leaders are working to give a new momentum to the technology. Without cc u. S. , coal use will be constrained in the future. The iea is committed to pushing this forward. Must involve government and industry last month, the u. S. Secretary of energy, rick perry cochaired a highlevel summit that brought together more than 20 countries the ceos of the Largest Companies that share with the u. S. We must build on this and move forward and act. Finally, the may conclude with main messages. Global coal demand is set to steak night in 2022. Second, the structural the slow decline in china is taking place fluctuations up and down determined by market needs. We may see china go up but it can go down again depending on conditions. India, south asia are leading the last sets of the decline this is all the finally, will use the constrained without utilization of storage when implemented widely. With todays launch in delhi after presentation we had comments from the secretary of coal about the report. The secretary, that coal continue to supply energies that he was also supportive of the Carbon Capture and utilization he wanted to emphasize carbon co2 had to be use. I think the messages are getting through in the outreach to new countries is paying dividends. And were having an influence on the coal policies in the world today. With that, thank you for listening. [applause] think you so much. Its very comprehensive. Were looking at all these measure market mover countries. Within them as fast evolving. Certainly it is impacted by different concerns with associated economic or political, but since youre in washington i wanted to ask you some u. S. Focus questions. You already mentioned increase u. S. Coal export. I realize well talk about market fundamentals. Recently the u. S. Started exporting coal to the crane. Looking like a specific type of coal. I guess theres always lower parts that the potential markets that it could still be appealing, or might be mistaken . First, theres the call markets are different, even though her overall demand for test are quite flat, there certain growth in countries, particularly india were we see significant growth. A new coal mine has opened in the u. S. And theres no surprise there are in certain countries and need for more coal. Overall, we did not break it out in the analysis but it is in the actual report that we look at ukraine and Asian Countries together and we do see some opportunity. There is also some possibility for increased consumption. Many areas are rather close to russia. But your cream is in a different situation when it comes to that. Because the russian competitiveness has improved quite a bit. And the met coal export is not more profitable for coal exporters i guess on the thermal coal side. But what extent could that ease the pain that the u. S. Coal industry is experiencing . Thats a hard one. We did not examine the u. S. Balance sheet. Overall coal is flat. There are particular countries were those are the opportunities so you do see a new mine opening. Thats a clear indication that the market thinks there something there. Certainly relying on queensland maybe custom