Transcript Progressive 15 Fall Meeting April 22, 2010 Joe Kiely Vice President of Operations, Ports-to-Plains Alliance.

Progressive 15
Fall Meeting
April 22, 2010
Joe Kiely
Vice President of Operations, Ports-to-Plains Alliance
It’s about connections ….
A pipeline!
Ports-to-Plains
Alliance
Nearly half of U.S. oil
and gas production
Source: U.S. Department of Energy
Why Does the
Alliance Matter?
Primary pipeline
corridor for North
America’s oil
Why Does the
Alliance Matter?
7 of America’s top 10
wind states
Source: U.S. Department of Energy
Why Does the
Alliance Matter?
America’s agricultural
heartland.
Source: U.S. Department of Agriculture
Why Does the
Alliance Matter?
Percent Population
Change – 2000-2009
Source: U.S. Census Bureau
Why Does the
Alliance Matter?
It’s about a Common Economy …
Energy …
Agriculture …
Trade …
Tourism …
It’s about an Energy Economy
… Its Jobs!
Energy = Jobs
Energy Sector as Jobs Provider
• Oil and Gas Industry
9.2 million jobs
• Alberta Oil Sands
343,000 new jobs in US – 2011-15
• Electricity Generation
250,000 direct jobs
• Ethanol Industry supports
220,000 jobs
Energy = Jobs
The American Economy Relies on Affordable, Reliable
Energy
• More than 3.7 million manufacturing jobs lost since 2007
• High energy prices a major factor
• 4,200 trucking companies closed due to high diesel prices
between 2Q 2007 and 4Q 2008
• 10 Airlines shut down due to high jet fuel prices in 2008 alone
• Over 360,000 jobs lost
Energy Jobs along the Ports-to-Plains Corridor
Montana
North Dakota
South Dakota
Wyoming
Nebraska
Colorado
New Mexico
Oklahoma
Texas
Oil &
Oil &
Oil &
Oil Sands
Oil Sands
Gas
Gas
Gas Development
Development
Jobs GDP $B % GDP
Jobs in U.S. Jobs New GDP $B
34,210
3.3 8.90%
1,200
0.081
27,914
2.8 9.60%
800
0.068
19,942
1.5 4.60%
1,000
0.086
71,063
8.4 29.40%
800
0.087
49,784
5.1 6.80%
2,300
0.189
190,408
24.1 9.30%
6,000
0.583
88,814
8.3 12.20%
2,000
0.179
348,627
47.8 31.30%
4,000
0.317
1,772,335
293.8 24.20%
27,300
2.800
2,603,097
395.1
45,400
4.390
US Jobs Associated with Canadian Energy
343,000
PartnershipForEnergy.com
A Measure of the Opportunity
Rotary Rig
Count
10/2/2009 4/16/2010
Alberta
131
60
Colorado
39
51
Montana
4
8
Nebraska
1
2
New Mexico
46
49
North Dakota
47
95
Oklahoma
74
119
South Dakota
0
1
Texas
388
639
Wyoming
38
35
768
1,059
67.27%
49.59%
Source: Baker Hughes
Period
%
Change
Change
-71
-54.20%
12
30.77%
4
100.00%
1
100.00%
3
6.52%
48
102.13%
45
60.81%
1
0.00%
251
64.69%
-3
-7.89%
291
37.89%
of U.S. Total
of Canada Total
US Generation Mix (Thru to Nov. 2009)*
Other
Renewables
3.9%
Coal
44.4%
Nuclear
20.2%
Oil & Other
1.0%
Natural Gas
23.6%
Hydroelectric
6.9%
*From Energy Information Administration
Wind & Solar Facts
Wind Facts*:

United States wind power generation now totals 35,159 MW and
is produced in 35 states

Powers close to 9.7 million American homes.

Capacity grew 39% between 2008 and 2009.

The American Wind Energy Association (AWEA) estimates 38
manufacturing companies were brought online, announced or
expanded in the United States in 2009.

The United States ranks 1st in the world in wind power
generation above China and Germany for 2009, per the Global
Wind Energy Center (GWEC).
* Numbers provided by AWEA unless otherwise noted.
Wind & Solar Facts
Solar Facts*:

United States solar power generation now totals 8,775 MW

Powers close to 1.5 million American homes.

Capacity grew about 10% between 2007 and 2008
* Numbers provided by the Solar Energy Industries Association (SEIA) unless otherwise noted.
Utilization Dictates Transmission Rates (HPX)
RENEWABLES-ONLY
MIX OF RESOURCES
EFFECTIVE $/MWH
RATE
$/MWh
RATE
TRANSMISSION
$25
NM-AZ @ $5.00/kW-mo
CO-NM @ $4.00/kW-mo
$20
WY-CO @ $3.25/kW-mo
$15
$10
$5
$-
30%
40%
50%
60%
70%
TRANSMISSION LINE UTILIATION
How to Improve Transmission Utilization
•
Geographic Diversity (wind in multiple locations)
•
Blending wind with solar and other renewables
•
Use of gas-fired generation for “firming” and meeting load
80%
90%
Local Market versus Export Market
•
•
•
•
•
Estimated wind energy potential exceeds local needs.
– NREL estimate of Ports-to-Plains states:
5 to 9 million MW
– US installed generating capacity 2008 (all fuels) 1.1 million MW
Everyone wants to export to either California or southeast
States are trying to be first to market:
– Competing with each other for economic development opportunities
– Want to change transmission planning philosophy to focus on wind
export in addition to reliability
Export scenarios will put tremendous stress on existing transmission built
primarily to serve local load.
Electric system stability will limit installed wind generation installation to a
fraction of the theoretical capability.
What About Those Oil Sands? -- The Opportunity
‫٭‬Ft McMurray
• There are 1.7 trillion
barrels of oil in the
Canadian Oil Sands
• Over half of this
potential resides in the
Athabasca McMurray
Sandstone
• Only 20% can be
mined – the rest is too
deep
Fort McMurray
Oil Sands Reclamation: Before and After
2000
2006
• Alberta’s oil sands in contextEnergy Development in Alberta
Global Crude Oil Reserves by Country
300
World Oil
Reserves
264
billion barrels
250
200
State owned
or controlled
175
136
150
Accessible
Oil Reserves
Canada’s
Oil Sands
53%
Accessible
115
102
100
99
Other
Other
Other
Other
Accessible
Accessible
Accessible
Accessible
Reserves
Reserves
Reserves
Reserves
92
47%
60
44
50
36
30
21
0
Saudi Arabia Canada
Iran
Iraq
Kuwait
Source: Oil & Gas Journal Dec. 2008
Venezuela Abu Dhabi
Russia
Libya
Nigeria Kazhakhstan United
States
Significant Source of US Supply
The Challenge: Viscosity
10,000,000
Bitumen at virgin reservoir conditions
1,000,000
Peanut Butter
Viscosity (cP)
100,000
Ketchup
10,000
Maple Syrup
1,000
Olive Oil
100
Bitumen under
SAGD
Cream
10
Water
1
0
50
Typical oil in the ground
100
150
Temperature (deg C)
200
250
Oil Sands: In Situ Recovery
In Situ Recovery:
Steam-Assisted
Gravity Drainage
• 80% of resource
• 45% of
production
• No tailings ponds
Cyclic Steam
Process
• No water from
the Athabasca
River
Transportation Corridors
Slide 29
Why Colorado? …
Domestic -- 2007
It’s about
Exports Domestic
Rail Trade
Truck
Montana
… Over
$10.47 billion 747 7%
Nebraska
1,117 11%
New Mexico
1,926 18%
North Dakota
120
1%
Oklahoma
420
4%
South Dakota
227
2%
Texas
275 3,304 34%
Wyoming
2,337 22%
Total ($m)
275 10,198 100%
10,473
Rail
Truck
Change
Change
2002-2007 2002-2007
-100%
0%
0%
0%
0%
0%
-19%
0%
-34%
62%
55%
195%
100%
75%
21%
46%
111%
81%
73%
Why Colorado? …
It’s about North American Trade …
Mexico … Exports …
Truck …$788m up 32% since 2004
Mexico … Imports …
Truck …$694m up 23% since 2004
Why Colorado? …
It’s about North American Trade …
Canada … Exports …
Truck …$1.6b up 18% since 2004
Canada … Imports …
Truck …$1.1b up 35% since 2004
Why Colorado? …
Almost 73% of Truck Trade with Mexico goes
through PTP Ports of Laredo, Eagle, Pass
and Del Rio.
The market share of Colorado’s trade with
Canada has increased 7.5% since 2004
through PTP Ports of Sweetgrass, Wild
Horse, Raymond and Portal.
It’s about the rural heartland …
Most communities under 20,000 population
Most communities are a long way from their state
capitals.
Most communities have little voice in
Washington, D.C.
How can we be heard about …
The importance of a national transportation vision
The value of freight corridors
The importance of connecting rural areas to
markets
How can we be heard about …
The importance of NHS High Priority Corridors
connecting to new markets north and south.
The expansion of these corridors
The value of Border Infrastructure to Commerce
and Security
How can we be heard about …
The need for a pilot project addressing truck
permitting, weights and combinations
Opposition to legislation that limits the
opportunities for expansion of rural highways
The opportunity for North American energy
security
How can we be heard about …
All these items through a
multi-state caucus!
How can we be heard about …
Joe Kiely
Vice President of Operations
P.O. Box 9
Limon, CO 80828
P: 303-586-1787
C: 719-740-2240
[email protected]
www.portstoplains.com