National Petroleum Council 2006-7 Global Oil and Gas Study - PowerPoint

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					      Facing The Hard Truths About Energy

          A Comprehensive View To 2030
           Of Global Oil And Natural Gas


                      IPAA
                   Rod Nelson


                                           Global Oil and Gas Study
NPC
                        1
           Today’s Discussion



 ● Study Approach



 ● What We Learned : The Hard Truths



 ● Recommended Strategies For The U.S.



                                       Global Oil and Gas Study
NPC
                    2
      The Secretary’s Suggested Questions

● What does the future hold for global oil and natural
  gas supply ?

● Can incremental oil and gas supplies be brought
  on-line, on time, and at a reasonable price to meet
  future demand without jeopardizing economic
  growth ?

● What oil and gas supply and / or demand-side
  strategies does the Council recommend the U.S.
  pursue to ensure greater economic stability and
  prosperity ?
                                             Global Oil and Gas Study
NPC
                          3
               Dimensions of the Study



                            Economics
         Supply                                    Demand



                           Findings
                             and
 Alternative              Strategies
                                                     Technology
  Energies



                                        Energy
                  Environment
                                        Security


                                                       Global Oil and Gas Study
NPC
                                4
             How This Study Is Different

                      • Over 100 studies incorporated to include both
    Integrated,         public and aggregated proprietary outlooks
 In-Depth Analysis
                      • Not another forecast of supply, demand or price



                      • 350 participants with backgrounds
   Diversity of
                        in all aspects of energy including efficiency,
    Expertise
                        economics, geopolitics, environment



                     • Identified achievable opportunities and
   Technology          likely deployment timing
   Assessment
                     • Looked across the energy spectrum, including
                       both supply and demand
                                                         Global Oil and Gas Study
NPC
                               5
                Technology Assessment Depth

•   Technology Development
•   Personnel Issues: The Big Crew Change
•   Carbon Management
•   Conventional Resources (includes EOR and Arctic)
•   Exploration Technology
•   Deepwater Technology
•   Unconventional Gas (including Coal and Shale gas)      Time horizons
                                                           Research budgets
•   Heavy Oil and Bitumen
                                                           Human resources
•   Oil Shale
                                                           Deployment
•   Gas Hydrates
•   Coal to Liquids and Gas
•   Biomass fuels
•   Nuclear Outlook and impact on Oil and Gas demand
•   Transportation Efficiency
•   Other Renewables
                                                              Global Oil and Gas Study
      NPC
                                      6
                                                               DRAFT
                                                         Do Not Cite or Quote
          Technology Pipeline is Robust

• Industry spends $6B+ on Oil and Gas related R&D

  • Achieved many dramatic technology advances

  • Much more to come from “Technology Pipeline”

     – Improved exploration tools

     – Increased recovery methods

• Alternative energy R&D investment increased to $3B

                                               Global Oil and Gas Study
 NPC
                             7
                                                                DRAFT
                                                          Do Not Cite or Quote
         There Is No Single Easy Solution

• Technology “Concept-to-widespread-adoption”
  is ~16 years


• When Government enables development,
  technology follows


• DOE oil and gas related technology spend decreasing
  • Impacting U.S. lower 48 and universities



                                                Global Oil and Gas Study
 NPC
                             8
      What We Learned:
       The Hard Truths




                         Global Oil and Gas Study
NPC
             9
              The Hard Truth: Demand




Coal, oil, and natural gas will remain indispensable

to meeting total projected energy demand growth.




                                            Global Oil and Gas Study
  NPC
                           10
Coal, Oil, and Natural Gas Will Remain Indispensable

        1980                            2004                          2030
288 QUADRILLION BTU              445 QUADRILLION BTU        678 QUADRILLION BTU



                                                                         NATURAL
                                                                           GAS

                                                              OIL

                                                                               COAL




                             WIND / SOLAR / GEOTHERMAL
                                                    HYDRO
                                                         NUCLEAR
                                                                   BIOMASS
    Source: IEA REFERENCE CASE
                                                                        Global Oil and Gas Study
    NPC
                                               11
                The Hard Truth: Supply



The world is not running out of energy resources, but

there are accumulating risks to continuing expansion of oil

and natural gas production from the conventional sources

relied upon historically. These risks create significant

challenges to meeting projected total energy demand.



                                                 Global Oil and Gas Study
  NPC
                              12
                                     Large Oil Resource Base

                          6
                                 UNCONVENTIONAL

                          5      CONVENTIONAL
 TRILLION BARRELS - OIL




                          4
                                 ULTIMATE RECOVERABLE RESOURCE (MEAN)

                          3


                          2


                          1


                          0
                              1984        1987      1991       1994     2000

Source: USGS
                                                                           Global Oil and Gas Study
NPC
                                                     13
Risks Reflected in Range of Production Projections

                                  140


                                  120                           EIA Ref Case
  MILLION BARRELS PER DAY – OIL




                                                                IOC – average
                                  100

                                                                Association for
                                   80                           Study of Peak Oil
                                                                (ASPO)
                                   60


                                   40


                                   20


                                    0
                                        2000   2010   2020   2030


 * Source: NPC Data Warehouse.
                                                                        Global Oil and Gas Study
      NPC
                                                      14
          The Hard Truth: Energy Sources


To mitigate these risks, expansion of all economic energy

sources will be required, including coal, nuclear, biomass,

other renewables, and unconventional oil and natural gas.

Each of these sources faces significant challenges

including safety, environmental, political, or economic

hurdles, and imposes infrastructure requirements for

development and delivery.

                                                Global Oil and Gas Study
  NPC
                             15
  Massive Infrastructure Investments Required


         COAL                          CTL
         UNCONV.                                                                     LIQUID
                     UPGRADING
         OIL                                                                          FUEL




                                                                       BLENDING
                                                OTHER
                                     REFINING
                                                 MFG.
         CONV.
         OIL

                 ●                    MFG
         BIOMASS

Supply                       GTL                                                  RENEWABLES           Demand
                                                                                  NUCLEAR      POWER
                             LNG                REGAS                                           GEN.
                                                                                  COAL
                                                             STORAGE


         GAS
                                                                                    NATURAL
                                                                                      GAS
                                    GAS                 DISTRIBUTION
                                 PROCESSING




                                                                                               Global Oil and Gas Study
  NPC
                                                        16
          The Hard Truth: Energy Security
"Energy Independence" should not be confused with

strengthening energy security. The concept of energy

independence is not realistic in the foreseeable future,

whereas U.S. energy security can be enhanced by

moderating demand, expanding and diversifying domestic

energy supplies, and strengthening global energy trade

and investment. There can be no U.S. energy security

without global energy security.
                                                Global Oil and Gas Study
  NPC
                             17
             Global Oil Trade



      2000                            2030




              EXPANDING FLOW TRENDS

                                             Global Oil and Gas Study
NPC
                     18
                          U.S. Historical Supply and Demand Trends


                          30
MILIION BARRLES PER DAY




                                                  U.S. FUELS DEMAND



                          15                                                                  GLOBAL TRADE
                                                                                              (NET IMPORTS)




                                                                      U.S. FUEL SUPPLIES

                          0
                           1973               1980               1985               1990   1995    2000         2005


                    Source: EIA Reference Case / NPC Global Oil and Gas study survey.
                                                                                                      Global Oil and Gas Study
                      NPC
                                                                                   19
               The Hard Truth: Workforce




A majority of the U.S. energy sector workforce, including

skilled scientists and engineers, is eligible to retire within

the next decade. The workforce must be replenished

and trained.




                                                   Global Oil and Gas Study
  NPC
                               20
                                 U.S. Human Resources Challenge


                                                     OVER HALF OF THE WORKFORCE ELIGIBLE
                                                          TO RETIRE IN NEXT 10 YEARS
                       25

                                      AGE DISTRIBUTION
% OF U.S. WORKFORCE




                       20


                       15


                       10


                       5


                       0
                            20   25     30    35    40        45   50   55   60       65       70

                                                          AGE
Source: U.S. Dept of Labor.



                                                                                  Global Oil and Gas Study
                      NPC
                                                         21
        The Hard Truth: Carbon Emissions




Policies aimed at curbing carbon dioxide emissions will

alter the energy mix, increase energy-related costs, and

require reductions in demand growth.




                                               Global Oil and Gas Study
  NPC
                            22
CO2 Emission Limits Will Alter Energy Strategies

Growing concern that climate is warming and CO2
concentrations in the atmosphere play a role.


The challenge of significantly reducing CO2 emissions
is unprecedented and will require:
       • Global, broad actions on multiple fronts
       • Long time horizons
       • Major additional investments



                                            Global Oil and Gas Study
 NPC
                          23
      Five Core U.S. Strategies




                                  Global Oil and Gas Study
NPC
                  24
           The Five Core U.S. Strategies

• Moderate Demand By Increasing Energy Efficiency

• Expand And Diversify U.S. Energy Supply

• Strengthen Global And U.S. Energy Security

• Reinforce Capabilities To Meet New Challenges

• Address Carbon Constraints

        There Is No Single, Easy Solution
                                               Global Oil and Gas Study
  NPC
                           25
       There Is No Single, Easy Solution


• All Five Strategies Must Be Addressed Together


• Global Cooperation Required


• Begin Now And Plan For Sustained Commitment



                                           Global Oil and Gas Study
NPC
                         38
                                                      All Strategies Are Essential

                          30
                                                   U.S. LIQUID FUELS DEMAND
MILLION BARRELS PER DAY




                                                                                                            MODERATE


                                                                                                     GLOBAL TRADE
                                                                                                     (NET IMPORTS)
                          15
                                                                                                      EXPAND & DIVERSIFY




                                                                               U.S. LIQUID FUELS




                               2000                                    2010              YEAR      2020                     2030

                               Source: EIA Reference Case / NPC Global Oil and Gas study survey.
                               Illustrative View
                                                                                                               Global Oil and Gas Study
                           NPC
                                                                                           39
      Thank You




                  Global Oil and Gas Study
NPC
          40
Thank you for listening to this presentation of the
                   NPC Report:
     “Facing the Hard Truths About Energy”


For information, please refer to the NPC Website
    for a complete list of available resources:
                http:www.npc.org


                                         Global Oil and Gas Study
 NPC
                         41

				
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