Facing The Hard Truths About Energy · 2008-04-22 · CONSULTANTS/ FINANCIAL 350 + participants,...

Global Oil and Gas StudyNPC

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Facing The Hard Truths About EnergyFacing The Hard Truths About Energy

A Comprehensive View To 2030A Comprehensive View To 2030Of Global Oil And Natural GasOf Global Oil And Natural Gas

Nancy Johnson DOENancy Johnson DOEApril 22, 2008April 22, 2008

National Petroleum Council

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

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

●● What oil and gas supply and / or demandWhat oil and gas supply and / or demand--side side strategies does the Council recommend the U.S. strategies does the Council recommend the U.S. pursue to ensure greater economic stability and pursue to ensure greater economic stability and prosperity ?prosperity ?

The SecretaryThe Secretary’’s Suggested Questions s Suggested Questions

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Dimensions of the StudyDimensions of the Study

AlternativeEnergies Technology

Supply

Environment EnergySecurity

Demand

Economics

Findings and

Strategies

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How This Study Is Different How This Study Is Different

Integrated,In-Depth Analysis

Diversity of Expertise

TechnologyAssessment

• Over 100 studies incorporated to include both Over 100 studies incorporated to include both public and aggregated proprietary outlookspublic and aggregated proprietary outlooks

•• Not another forecast of supply, demand or priceNot another forecast of supply, demand or price

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

•• Identified achievable opportunities and Identified achievable opportunities and likely deployment timinglikely deployment timing

•• Looked across the energy spectrum, includingLooked across the energy spectrum, includingboth supply and demandboth supply and demand

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How This Study is DifferentHow This Study is Different

OIL AND GASINDUSTRY

OTHER INDUSTRIES

ACADEMIA/PROFESSIONAL

SOCIETIES GOVERNMENTS

NGOs

CONSULTANTS/FINANCIAL

350 + participants, plus 350 + participants, plus input from 1000 + othersinput from 1000 + others

65% participants 65% participants from outside of oil from outside of oil and gas industryand gas industry

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Coal, Oil, and Natural Gas Will Remain IndispensableCoal, Oil, and Natural Gas Will Remain Indispensable

Source: IEA REFERENCE CASE

1980 2004 2030

288 QUADRILLION BTU 445 QUADRILLION BTU

BIOMASSNUCLEAR

WIND / SOLAR / GEOTHERMAL

678 QUADRILLION BTU

HYDRO

OIL

NATURAL GAS

COAL

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The Hard Truth: Supply

The world is not running out of energy resources, but The world is not running out of energy resources, but

there are accumulating risks to continuing expansion of oil there are accumulating risks to continuing expansion of oil

and natural gas production from the conventional sources and natural gas production from the conventional sources

relied upon historically. These risks create significant relied upon historically. These risks create significant

challenges to meeting projected total energy demand.challenges to meeting projected total energy demand.

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0

1

2

3

4

5

1984 1987 1991 1994 2000

TRIL

LIO

N B

ARR

ELS

-OIL

Source: USGS

6UNCONVENTIONAL

CONVENTIONAL

ULTIMATE RECOVERABLE RESOURCE (MEAN)ULTIMATE RECOVERABLE RESOURCE (MEAN)

Large Oil Resource Base Large Oil Resource Base

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Oil Resource ConcentrationOil Resource Concentration

ILLUSTRATIVE PROJECTIONSource USGS

UNCONVENTIONAL CONVENTIONAL

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Risks Reflected in Range of Production Projections Risks Reflected in Range of Production Projections

* Source: NPC Data Warehouse.

0

20

40

60

80

100

120

140

2000 2010 2020 2030

Association for Study of Peak Oil (ASPO)

MIL

LIO

N B

AR

RE

LS P

ER

DA

Y

MIL

LIO

N B

AR

RE

LS P

ER

DA

Y ––

OIL

O

IL

IOC IOC –– averageaverage

EIA Ref CaseIEA Medium–Term Outlook

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Global Gas Resource EndowmentGlobal Gas Resource Endowment

In-Place = ~50,000

Lower Permeability Reservoirsand/or High Temp & High Pressure

Remaining Resources = ~15,000(largely conventional)

Trillion Standard Cubic Feet (TCFs)(not to scale)

DE

CR

EA

SIN

G P

RO

BA

BIL

ITY

OF

RE

CO

VE

RA

BLE

VO

LUM

ES

INCREASING GEOLOGIC UNCERTAINTY

Produced = ~3,000 TCF

Remaining Proved Reserves = ~6,400

Source: USGS.

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The Hard Truth: Energy Sources

To mitigate these risks, expansion of all economic energy To mitigate these risks, expansion of all economic energy

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

other other renewablesrenewables, and unconventional oil and natural gas. , and unconventional oil and natural gas.

Each of these sources faces significant challenges Each of these sources faces significant challenges

including safety, environmental, political, or economic including safety, environmental, political, or economic

hurdles, and imposes infrastructure requirements for hurdles, and imposes infrastructure requirements for

development and delivery.development and delivery.

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0

400

800

1980 2004 2030

QU

ADR

ILLI

ON

BTU

PER

YEA

R

Liquids

Gas

Coal

NUCLEAR

All Sources of Energy Will Be Needed All Sources of Energy Will Be Needed

Source: IEA REFERENCE CASE

BIOMASS

WIND / SOLAR / GEOTHERMAL / HYDRO

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0

3

6

9

12

15

2005 2010 2015 2020 2025 2030

Contribution of Unconventional LiquidsContribution of Unconventional Liquids

0

3

6

9

12

15

2005 2010 2015 2020 2025 2030

MIL

LIO

N B

ARR

ELS

PER

DAY

MIL

LIO

N B

ARR

ELS

PER

DAY

BiofuelsBiofuels

Oil Sands / BitumenOil Sands / Bitumen

Extra Heavy OilCoalCoal--ToTo--LiquidsLiquidsGas-To-Liquids

Source: Data From EIA 2007 Reference.

Global ProductionGlobal Production

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Massive Infrastructure Investments RequiredMassive Infrastructure Investments Required

Supply Demand

REFINING OTHERMFG.

BLE

ND

ING

CTL

COAL

GAS

COAL

CONV.OIL

DISTRIBUTION

STORAGE

GASPROCESSING

REGAS

GTL

LNG

RENEWABLES

MFGBIOMASS

UPGRADINGUNCONV.OIL

NUCLEARNUCLEAR POWERGEN.

NATURAL GAS

LIQUID FUEL

●

REFINING OTHERMFG.

BLE

ND

ING

CTL

COAL

GAS

COAL

CONV.OIL

DISTRIBUTION

STORAGE

GASPROCESSING

REGAS

GTL

LNG

RENEWABLES

MFGBIOMASS

UPGRADINGUNCONV.OIL

NUCLEARNUCLEAR POWERGEN.

NATURAL GAS

LIQUID FUEL

●

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The Hard Truth: Energy Security

"Energy Independence" should not be confused with "Energy Independence" should not be confused with

strengthening energy security. The concept of energy strengthening energy security. The concept of energy

independence is not realistic in the foreseeable future, independence is not realistic in the foreseeable future,

whereas U.S. energy security can be enhanced by whereas U.S. energy security can be enhanced by

moderating demand, expanding and diversifying domestic moderating demand, expanding and diversifying domestic

energy supplies, and strengthening global energy trade energy supplies, and strengthening global energy trade

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

without global energy security. without global energy security.

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OECD and NonOECD and Non--OECD CountriesOECD Countries

Non-OECD

Organization for Economic Cooperation and Development (OECD)

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The Hard Truth: Workforce

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

skilled scientists and engineers, is eligible to retire within skilled scientists and engineers, is eligible to retire within

the next decade. The workforce must be replenished the next decade. The workforce must be replenished

and trained. and trained.

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U.S. Human Resources ChallengeU.S. Human Resources Challenge%

OF

U.S

. WO

RK

FOR

CE

AGE DISTRIBUTION

Source: U.S. Dept of Labor.

0

5

10

15

20

25

20 25 30 35 40 45 50 55 60 65 70

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

AGE

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The Hard Truth: Carbon Emissions

Policies aimed at curbing carbon dioxide emissions will Policies aimed at curbing carbon dioxide emissions will

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

require reductions in demand growth.require reductions in demand growth.

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Growing concern that climate is warming and CO2concentrations 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

CO2 Emission Limits Will Alter Energy Strategies

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Range of Global Supply Projections Range of Global Supply Projections –– Gas Gas

Source: NPC Survey for the Oil & Gas Study.

0 -

100 -

200 -

300 -

400 -

500 -

600 -

l1980

l1990

l2000

l2010

l2020

l2030

BIL

LIO

N C

UB

IC F

EE

T P

ER

DA

Y 498 EIA REF.452 IEA REF.

380 HISTORICALTREND

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Coal Supply Projections Coal Supply Projections

(All Forecasts Normalized to 6.5 BST in 2005)

0

2

4

6

8

10

12

1995 2000 2005 2010 2015 2020 2025 2030 2035

Sho

rt To

ns (B

illion

s)

EIA-Ref IEA-Ref IEA-Alt ASPOCCSP-IGSM-Ref CCSP-IGSM-L1 CCSP-Merge-Ref CCSP-Merge-L1CCSP-MiniCam-Ref CCSP-MiniCam-L1 Oakridge HGSS Oakridge LGSSEC WETO Ref EC WETO C Constr EC WETO H2

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Nuclear Power Outlook Nuclear Power Outlook

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Hydrogen Fuel Outlook Hydrogen Fuel Outlook


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Five Core U.S. Strategies Five Core U.S. Strategies

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The Five Core U.S. StrategiesThe Five Core U.S. Strategies

•• Moderate Demand by Increasing Energy Efficiency Moderate Demand by Increasing Energy Efficiency

•• Expand and Diversify U.S. Energy SupplyExpand and Diversify U.S. Energy Supply

•• Strengthen Global and U.S. Energy SecurityStrengthen Global and U.S. Energy Security

•• Reinforce Capabilities to Meet New Challenges Reinforce Capabilities to Meet New Challenges

•• Address Carbon Constraints Address Carbon Constraints

There Is No Single, Easy Solution

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Expand and Diversify SupplyExpand and Diversify Supply

For each strategy, the Council provides inFor each strategy, the Council provides in--depth recommendations, depth recommendations, such as:such as:

Diversify longDiversify long--term energy production term energy production

•• Accelerate development of energy from biomass Accelerate development of energy from biomass

•• Enable the longEnable the long--term environmental viability of term environmental viability of coal for power, fuel, and feedstock coal for power, fuel, and feedstock

•• Expand domestic nuclear capability Expand domestic nuclear capability

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All Strategies Are Essential All Strategies Are Essential

2000 2010 2020 2030

MIL

LIO

N B

ARR

ELS

PER

DAY

30

Source: EIA Reference Case / NPC Global Oil and Gas study survey.

Illustrative View

15EXPAND & DIVERSIFY

MODERATE

YEAR

U.S. LIQUID FUELS DEMAND

U.S. LIQUID FUELS

GLOBAL TRADE (NET IMPORTS)

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There Is No Single, Easy Solution

•• All five strategies must be addressed togetherAll five strategies must be addressed together

•• Global cooperation required Global cooperation required

•• Begin now and plan for sustained commitment Begin now and plan for sustained commitment

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Additional Information and CommentsAdditional Information and Comments

““Facing the Hard Truths About EnergyFacing the Hard Truths About Energy””

Please refer to the NPC Website for a complete list Please refer to the NPC Website for a complete list

of available resources:of available resources:

http://http://www.npc.orgwww.npc.orgSend your follow-up questions and comments to:

[email protected]

Facing The Hard Truths About Energy · 2008-04-22 · CONSULTANTS/ FINANCIAL 350 + participants,...

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Transcript of Facing The Hard Truths About Energy · 2008-04-22 · CONSULTANTS/ FINANCIAL 350 + participants,...