1 R ICE U NIVERSITY Sustaining Energy and Mobility in the 21 st Century: Challenges and...
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Transcript of 1 R ICE U NIVERSITY Sustaining Energy and Mobility in the 21 st Century: Challenges and...
1
RICE
UNIVERSITY Sustaining Energy and Mobility in the 21st
Century: Challenges and Opportunities for the U.S.
Amy Myers Jaffe Wallace S. Wilson Fellow for Energy Studies,James A. Baker III Institute for Public Policy
Rice University
Richard Lugar/Purdue UniversitySummit on Energy Security
August 29, 2006
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UNIVERSITY
International Backdrop for Oil
Terrorist attacks on Crude Processing Facilities in Iraq, Saudi Arabia
U.S.-Iran—Risks to Strait of Hormuz Saudi Arabia –Political Uncertainties Middle East –Period of Great Political
Transition Future of U.S. role in Iraq? Arab-Israeli Conflict Russia – Putin and the Statists Latin America: Populism and Hugo
Chavez Africa: Localized unrest in Nigeria China: Demand Wildcard
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Current State: High Crude Prices
Crude prices have more than doubled since late 1999 WTI largely traded in the $20 range throughout the 1990s WTI’s price has since risen to more than $70 per barrel
2005 average = $56.64 January 2006 = $64.95
$61.97$40.16$26.65$23.00$21.09$22.25$18.64$16.45$18.91$18.91$17.49$18.67$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
WT
I Cu
shin
g S
po
t P
rice
, $/b
bl n
om
inal
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RICE
UNIVERSITYCountryTotal Primary Energy Consumption Per Person
(2002) (Million BTU)
Brazil 48.7
China 33.3
Germany 173.1
India 13.3
Japan 172.3
United States
339.1
Source: BP
Source: EIA
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UNIVERSITY N e t O i l T ra d e , 2 0 3 0N e t O i l T ra d e , 2 0 3 0
The M idd le E ast s trengthens its position as the w orld ’s largest o il exporter
M b/d
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RICE
UNIVERSITYWorld Liquids Production
Outlook
0
20
40
60
80
100
120
140
1980 1990 2000 2010 2020 2030
Non-OPEC Crude + Condensate
NGLs, OPEC Condensate, Other
MBDMBD
Liquids Demand OPEC
2823
~30~41
~50
Canadian Oil SandsCanadian Oil Sands
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OPEC production capacity has fallen, not increased, since 1979
Opec can replace allIraqi/Kuwait oil in 1990
Asian economic crisis leaves extra capacity in 1998
Demand bumpsup against capacity
Member Country
1979
1983
1990
1997
1998
2000
2001
2003
2005
Saudi Arabia10.8
411.3
0 8.00 9.65 9.80 9.50 9.9010.1
510.3
0
Iran 7.00 3.00 3.10 3.70 3.70 3.75 3.80 3.80 4.00
Iraq 4.00 1.50 3.60 2.30 2.80 2.90 3.05 2.20 1.80
Kuwait 3.34 2.80 2.40 2.40 2.40 2.40 2.40 2.50 2.60
UAE 2.50 2.90 2.20 2.40 2.40 2.40 2.45 2.50 2.40
Qatar 0.65 0.65 0.40 0.71 0.72 0.73 0.75 0.75 0.82
Venezuela 2.40 2.50 2.60 3.45 3.30 2.98 3.10 2.50 2.50
Nigeria 2.50 2.40 1.80 2.00 2.05 2.10 2.30 2.30 2.30
Indonesia 1.80 1.60 1.25 1.40 1.35 1.35 1.30 1.15 0.90
Libya 2.50 2.00 1.50 1.45 1.45 1.45 1.45 1.45 1.60
Algeria 1.23 1.10 0.75 0.88 0.88 0.88 0.88 1.15 1.35
Total38.7
631.7
527.6
030.3
430.8
530.4
431.3
830.4
530.5
7
Call on OPEC
34.01
16.65
22.20
27.59
25.85
30.04
28.23
29.20
29.87
Spare Capacity 4.75
15.10 5.40 2.75 5.00 0.40 3.15 1.25 0.70
OPEC Production and Spare Capacity, 1979-2003 (mmb/d)
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National Oil Companies on the RiseThey Control the Resources
6%11%6%
77%
Oil Reserves Held by Russian Companies
69 Bill. BblFull IOC Access
70 Bill. Bbl
NOC Oil Reserves (Equity Access)
123 Bill. Bbl
NOC Oil Reserves (No Equity Access)
886 Bill. Bbl
WW Proven Oil Reserves: 1,148 Bill. Bbl
Source: PFC Energy
16%7% 13%
64%
Reserves Held by New Russian CompaniesFull IOC
Access
NOC Reserves (Equity Access)
NOC Reserves(No Equity Access)
Oil & Gas: 2,182 Bill. Bbl
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UNIVERSITY Saudi Arabia
From Osama Bin Laden’s Letter to the American People:
“You steal our wealth and oil at paltry prices because of your international influence and
military threats. This theft is indeed the biggest theft ever witnessed by mankind in the
history of the world.”
--Osama Bin LadenIn December 2004, called on the faithful to attack oil facilities as part of the jihad against the West
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Hurricanes Rita, Katrina And Gulf Oil & Natural Gas Operations
KR
Rita landfallKatrina landfall
Sources: NOAA, EIA
LOUISIANA
TEXAS
MISSISSIPPI ALABAMA
Source: API
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How to create viable alternatives?
*It is desirable to have diversity of supply
options in our automotive transportation
system.
*Several viable options exist.
*New policy frameworks needed to
remove obstacles and provide
incentives.