Transcript Slide 1

John C. Felmy
Chief Economist
American Petroleum Institute
[email protected]
Forecast of U.S. Energy Growth
2005 Actual
31% Growth
(1.1%/yr.)
2030 Outlook
(100 quads)
(131 quads)
Nuclear
Nuclear
8%
7%
Coal
23%
Gas
23%
Oil
40%
Coal
Oil
26%
40%
6%
Gas
21%
7%
Renewables
Source: EIA, AEO2007
Renewables
2
Future U.S. Energy Demand

60
The U.S. will consume 28 percent more oil and 19 percent more natural gas in
2030 than in 2005.
History
Projections
50
quadrillion Btu
Petroleum
40
Coal
30
Natural Gas
20
10
Nuclear
Nonhydro renewables
0
Hydropower
1980
1990
2000
2005
2010
2020
2030
3
Source: EIA, AEO 2007
2005
2030
% Change
40.61
52.17
28.5
40.5
39.8
22.63
26.89
22.6
20.5
63.25
79.06
63.1
60.3
22.87
34.14
22.8
26.0
86.12
113.20
86.0
86.3
8.13
9.33
8.1
7.1
2.71
3.09
2.7
2.4
2.38
4.06
2.4
3.1
0.76
1.44
0.8
1.1
0.08
0.04
0.1
0.0
100.19
131.16
Consumption (Quads)
Liquid Fuels and Other Petroleum
Share
Natural Gas
Oil and Gas
Coal
Oil, Gas and Coal
Nuclear Power
Hydropower
Biomass
Other Renewable Energy
Other
Total
EIA, AEO 2007
18.8
25.0
49.3
31.4
14.8
13.8
70.5
88.7
-48.3
30.9
4
Future Global Energy Demand
 Global energy demand will increase by more than 50 percent
between now and 2030.
Source: IEA
5
Future U.S. Energy Demand
 The U.S. will consume more energy even with efficiency
improvements
Energy per GDP
1000 btus per $1 GDP (2000$)
EIA AEO 2007
20
17.44
16
-
14
49%
12
10
8.8
8
- 34%
6
5.83
4
2
History
Forecast
2029
2027
2025
2023
2021
2019
2017
2015
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
0
1973
1000 btu per $1 GDP (2000)
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Source: US DOE
6
U.S. Supplies Percent
of Crude
and
Products
of Domestic
Product
Supplied
Algeria, 3%
Angola, 3%
Nigeria, 5%
Venezuela, 6%
Iraq, 2%
Russia, 2%
Virgin Islands, U.S., 2%
Mexico, 6%
Other, 10%
Saudi Arabia, 7%
Canada, 11%
EIA, Petroleum Supply Monthly, May 2007
United States, 42%
Other countries include: United Kingdom, Kuwait, Ecuador, Brazil, Norway, Korea-South, Aruba, Trinidad and Tobago, Columbia, Libya, Argentina, Chad, Germany, Equatorial Guinea, France,
Gabon, Belgium, Sweden, Indonesia, Finland, Vietnam, Estonia, Yemen, Brunei, Italy, Lithuania, Cameroon, Malaysia, Latvia, Portugal, China, Netherlands, Oman, United Arab Emirates, 7
Denmark, India, and Bahrain.
World’s largest oil companies based on liquid reserves
Saudi Arabia--Saudi
Iran--NIOC
Iraq--INOC
Kuwait--KPC
Venezuela--PDV
UAE--Adnoc
Libya--Libya NOC
Nigeria--NNPC
Mexico--Pemex
Russia--Lukoil
Russia--Gazprom
U.S.--ExxonMobil
Russia--Yukos
China--PetroChina
Qatar--Qatar
Algeria--Sonatrach
UK--BP
Brazil--Petrobras
US--Chevron
France--Total
UK--Royal Dutch
Malaysia--Petronas
Russia-US--ConocoPhillips
Indonesia--Pertamina
Russia--Sibneft
Italy--ENI
India--ONGC
Oman--PDO
China--Sinopec
Azerbaijan--Socar
Russia--Rosneft
Russia/UK--TNK-BP
US--Occidental
Spain--Repsol YPF
Syria--Repsol YPF
Norway--Statoil
Egypt--EGPC
Columbia--Ecopetrol
U.S.--Amerada Hess
Canada--EnCana
Norway--Norsk Hydro
U.S.--Apache
US--Devon Energy
Canada--PetroU.S. Marathon
U.K--BG
U.S.--Anadarko
Non-IOC
IOC
0
5
10
15
Percent
Source: Oil & Gas Journal
20
25
8
Who owns “Big Oil”?
(Holdings
of oil stocks, 2004)
Who
Owns "Big Oil"?
(Holdings of Oil Stocks, 2004)
Private Pension
Funds
15%
All Other
Holdings
59%
(e.g. individuals, firms,
mutual funds, etc.)
Pension Plans
and
Retirement
Accounts
41%
Federal & State
Pension Funds
12%
IRA
14%
Source: The Economic Impact of a Windfall Profits Tax For Savers and Shareholders , SONECON, November 2005
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Capital Spending
Source: Oil and Gas Journal, April 2, 2007
10
U.S. Crude Oil Resources
(undiscovered technically recoverable federal resources)
Lower 48, onshore
Lower 48, onshore
7 Bbl
7 Bbl
Pacific offshore
10.5 Bbl
Alaska onshore 18 Bbl
Alaska offshore 26.6 Bbl
Atlantic offshore
Atlantic offshore
3.8
3.8Bbl
Bbl
Gulf offshore/deepwater
44.9 Bbl
112 billion barrels is enough oil to power over 60 million cars for 60 years
AND heat over 25 million homes for 60 years.
Source: MMS, USGS, and API Calculations
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U.S. Natural Gas Resources
(undiscovered technically recoverable federal resources)
Lower 48, onshore
167 Tcf
Pacific offshore
18.3 Tcf
Alaska onshore 69 Tcf
Alaska offshore 132 Tcf
Atlantic offshore
37 Tcf
Gulf offshore
232.5 Tcf
656 trillion cubic feet is enough natural gas to heat 60 million homes for 160
years.
Source: MMS, USGS, and API Calculations
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Number of refineries declines but capacity expands
Source: DOE
13
Environmental Expenditures since 1990
Source: API Statistics
Highway and Non-road Diesel Timelines
2006 2007 2008 2009 2010 2011 2012 2013 2014
Highway
15 ppm (80%)*
Part 89 Non-road Diesel (NR)
(Farm/Construction)
500 ppm
Locomotive and Marine (L&M)
500 ppm
With Credits NR
(not in NE or AK)
Small Refiner Non-road Diesel
(not in NE; with approval in AK)
Transmix/In-Use NR
(not in NE or AK)
Transmix/In-use L&M
(not in NE or AK)
15 ppm (100%)
15 ppm
15 ppm
5000 ppm
500 ppm
5000 ppm
500 ppm
5000 ppm
500 ppm
5000 ppm
500 ppm
15
ppm
15
ppm
15
ppm
* 2006: Refinery – June 1; Terminal – September 1; Retail – October 15
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Technology – Our Industry’s Investments (2000-2005)
$135 Billion
$98 billion
(73%)
$89 billion
(66%)
By Investor
By Technology
$32 billion
(23%)
$31 billion
(23%)
$15 billion
(11%)
$5 billion
(4%)
Oil & Gas
Companies
Source: IER and CEE
Other
Private
Federal
Government
Frontier
Hydrocarbons
End
Use
Non
Hydrocarbons
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Leading emerging
energy
investmentsEnergy
by U.S.Investments
firms (2000-2005)
Leading
Next-Generation
by U.S. Firms:2000-2005
$20 billion
$41 billion
Other 15%
$26 billion
Alternate Fuel
Vehicles 19%
Wind 4%
LNG 7%
Gas-toLiquids 30%
Tar Sands
25%
$5.6 billion
$9 billion
$34 billion
Source: Compiled from 250+ Annual Company Reports for 2000-2005, and the U.S. Department of Energy, EIA
17
U.S. Corn Use 2006-2007
Source: USDA
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Ethanol in Brazil
10
Fuel Demand (MBD)
7.5
5
Brazilian Ethanol (Sugar Cane Derived)
- Ethanol meets 45% of Brazil’s Gasoline Demand
2.5
Gasoline
- Lowest ethanol production costs in the world
- Climate, Geography, Labor costs conducive to sugar
production
Ethanol
- Brazilian model not applicable to US in terms of scale/cost
- U.S. Tariff to imported ethanol is $0.54/gallon
0
Brazil
US
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Our Priorities
 Efficiency – improve our own and encourage
efficiency in other industries and among consumers.
 Technology – increase investments in and use of
advanced energy technologies to develop all sources
of energy cleanly and responsibly.
 Diversity – increase access to oil and natural gas
supplies both here at home and around the world.
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Energy Policy Perspectives
 Encourage energy efficiency
 Encourage investment in long-term energy initiatives
and advanced technologies.
 Reduce barriers to increasing domestic supplies
 Rely on market forces to allocate products.
 Refrain from new taxes that make it more expensive
to develop our domestic supplies.
 Support our need to participate actively in global
energy markets rather than isolate the U.S.
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