Transcript Document

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AMERICAN OIL
ENERGY
INDEPENDENCE
………… IN THE REAL WORLD
Dr. John Anthony Scire, PhD, 6 February 2013
THE OPTIMISTS PREDICT US
WILL BE INDEPENDENT OF
OUR RELIANCE ON
IMPORTED OIL
IN TEN YEARS
(IF WE OPEN UP ALL OF OUR FEDERAL LANDS FOR DRILLING, INCREASE FRACKING,
AND BEGIN TO EXPLOIT THE OIL SHALES IN THE GREEN RIVER FORMATION.)
SO PEAK OIL
IS A THING
OF THE PAST????
REALLY?
A REALITY
CHECK
ON
PEAK OIL
PRODUCTION
THE WORLD PEAK
OF
OIL PRODUCTION
IS NOW
ESTIMATED
TO BE BEYOND
2040 ….. BUT
WHO CARES ??
THE US
WILL NOT EXCEED
ITS 1970 PEAK FOR THE
FORESEEABLE
FUTURE
THE ENERGY INFORMATION AGENCY OF THE US DOE PREDICTS
U.S. tight oil production leads a growth in domestic production of 2.6
million barrels per day between 2008 and 2019
U.S. crude oil production million barrels per day
History
Projections
2011
Tight oil
Other lower 48 onshore
Lower 48 offshore
Alaska
Adam Sieminski
January 5, 2013
Source: EIA, Annual Energy Outlook 2013 Early Release
A REALITY CHECK ON
IMPORTS
BP says US still imports 35% in 2030
DOE says US still imports 37% in 2040
IEA says US still imports 16% by 2035
-
(but all of it from the Western Hemisphere, mostly from Canada)
AND WE WILL STILL IMPORT UP TO 37%
OF OUR LIQUID FUELS in 2040
Source: EIA, Annual Energy Outlook 2013 Early Release
BUT HOW
IMPORTANT IS
OIL TO OUR
ECONOMY???
HOW IMPORTANT IS OIL TO THE
AMERICAN ECONOMY?
PETROLEUM IS ONLY 35.28% OF TOTAL ENERGY CONSUMPTION
BUT IN EXCESS OF 90% OF TRANSPORTATION’S ENERGY USE
BUT THE
FRACKING
GAS WILL
SAVE US!!!
SHALE GAS DOUBLES GAS
PRODUCTION BY 2040
History
Projections
2011
U.S. dry natural gas production in trillions of cubic feet
Shale gas
Non-associated offshore
Tight gas
Alaska
Coalbed methane
Associated with oil
Non-associated onshore
Source: EIA, Annual Energy Outlook 2013 Early Release
BUT
CONSUMPTION IS
GOING UP AND
LNG EXPORTS
WILL GO UP SOON
NATURAL GAS CONSUMPTION
BY TRANSPORTATION
3.0
2.5
History
Projections
2011
QUADRILLION BTUs
2.0
28%
Gas to liquids
1.5
Freight 38%
trucks
1%
1.0
Buses
1%
Light-duty vehicles
0.5
3%
Pipeline fuel
3%
1%
31%
95%
0.0
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Note: Gas to liquids includes heat, power, and losses.
Source: EIA, Annual Energy Outlook 2013 Early Release
NATURAL GAS CONSUMPTION BY
ELECTRICITY GENERATION
In 2005, 2,085 gigawatt hours per day
In 2012 , 3,358 gigawatt hours per day
This is a growth in Electricity
Generation Use of 47%
IN JUST 7 YEARS
NATURAL GAS CONSUMPTION BY
EXPORTATION
U.S. natural gas exports
trillion cubic feet
Exports to Mexico
Exports to Canada
Lower 48 LNG exports
Alaska LNG exports
Source: EIA, Annual Energy Outlook 2013
Early Release
AND THEN PRICES
GO UP TO WORLD
MARKET PRICES
WHICH ARE 5 TO 9
TIMES HIGHER
THAN THE US
CONCLUSION:
NATURAL GAS WILL
NOT MAKE US
ENERGY
INDEPENDENT BUT
IT WILL ……
....BUY US TIME….
TIME
TO REDUCE OIL ENERGY
CONSUMPTION BY
INCREASING EFFICIENCY
AND ALTERNATIVES
BECAUSE EVEN THOUGH OUR
DOMESTIC CONSUMPTION HAS
DECLINED AND WILL CONTINUE TO
DECLINE
WORLD DEMAND WILL
INCREASE DRAMATICALLY
WORLD DEMAND FOR OIL WILL
GO FROM 85 MBD TODAY TO
OVER 103 MBD BY 2030
96% OF THAT GROWTH WILL BE
FROM NON-OECD COUNTRIES.
AND WORLD PRICES WILL
NOT DECLINE
1. OPEC’S SHARE OF PRODUCTION GOES
UP TO 45% (BP/IEA)
2. US WILL HAVE TO PAY WORLD PRICES
…………AND………….
3. NET IMPORT BILLS WILL NOT GO
DOWN
(OPEC will still have pricing power)
SOOOOOOOOOO
NO TOTAL
INDEPENDENCE
BUT
THE GOOD NEWS
IS…….
NO NEED TO
IMPORT ANY
OIL FROM THE
MIDEAST BY
2020
SO LET’S
DISCUSS THE
NATIONAL
SECURITY
POSSIBILITIS
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- CENTCOM ROLE DIMINISHES VISÀ-VIS THE OTHER COMS
- ISRAEL’S IMPORTANCE
DIMINISHES
- IRAN’S IMPORTANCE DIMINISHES
- THE TRADE DEFICIT’S DRAIN ON
AMERICAN CAPITAL DIMINISHES
MORE SECURITY POSSIBILITIES
- OIL DISRPUTIONS WORLDWIDE DUE TO
DEMAND OR SUPPLY PROBLEMS WILL
NOT CRUSH THE US ECONOMY
- MORE SELECTIVITY IN SOURCING OIL
WHEN SECURITY IMPLICATIONS ARISE
- RISING IMPORTANCE OF WESTERN
HEMISPHERE
- COMPETION WITH CHINA FOR
RESOURCES MAY ESCALATE
MORE SECURITY CONSIDERATIONS
-
CHINA’S DEPENDENCY RISES TO 80% MOST
OF WHICH WILL COME FROM THE MIDDLE
EAST AND AFRICA
-
EURO DEPENDENCE ON RUSSIAN GAS
DIMINISHES AS US LNG EXPORTS INCREASE
-
JAPANESE DEPENDENCE ON IMPORTED
LNG INCREASES AS NUCLEAR DECLINES