Natural Gas Makes the Future Work. 2 Outline Natural Gas in Relation to Other Commodities Today’s...
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Transcript of Natural Gas Makes the Future Work. 2 Outline Natural Gas in Relation to Other Commodities Today’s...
Natural Gas Makes the Future Work
2
Outline
• Natural Gas in Relation to Other Commodities
• Today’s Market Fundamentals
• Natural Gas: Jobs, Revenue & Environment
-50%
0%
50%
100%
150%
200%
250%
Same story, different commodities
Coal
Crude Oil
Soybeans
Wheat
Corn
Copper
Gold
Natural Gas
Silver
Commodity Price Changes Since January 2007
Source: CME Group, A CME/Chicago Board of Trade Company
-50%
0%
50%
100%
150%
200%
250%
Natural gas at low end of rising commodity tide
Coal
Crude Oil
Soybeans
Wheat
Corn
Copper
Gold
Natural Gas
Silver
6
Major U.S. Shale Basins Hold Potential for 30 Bcf/d; Roughly Half of U.S. Production
Source: North American Natural Gas Supply Assessment Navigant Consulting, Inc. & EIA
6
Natural Gas, Oil E&P Provides Billions Annually in Government Revenue
U.S. Treasury:
–$6.6 Billion in 2007
–$17.1 Billion in 2008
States:
–$1.6 Billion in 2007
–$2.2 Billion in 2008
8
U.S. LNG Import Capacity Growing; Imports Lag Due to World Competition
02468
101214161820
2006 2007 2008 2009 2010
U.S. Import Capacity
Source: EIA Annual Energy Outlook 2008 & EVA
Bcf/day
U.S. Imports
99
http://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-wld-pr.pdfhttp://www.ferc.gov/market-oversight/othr-mkts/lng/othr-lng-wld-pr.pdf
10
Canadian Imports Slowing
9.2 8.9 8.7 8.9
7.5
0
1
2
3
4
5
6
7
8
9
10
2006 2007 2008 2009 2010
10
Source: EVA
Bcf/day
0
200
400
600
800
1,000
1,200
1,400
1,600
2005
2006
2007
2008
2009
790
Rig Count Decline Demonstrates Supply Following Demand
11
Source: EIA Monthly Energy Review, December 2008 & EIA Natural Gas Weekly Update (4/9/09)
50%
12
Industrial Sector Demand Rebounded in 2008; Industrial Sector Most Elastic
7.52
7.157.23
6.616.50
6.64 6.68
6.31 6.35
666667777788
2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: EVA & Annual U.S. Natural Gas Industrial Consumption, EIA
Tcf
5.8 Million Blue Jobs
Natural gas and oil industry provides 5.8 Million Blue Jobs– 1.8 Million Direct– 4 Million Indirect
E&P Jobs Pay More Than 2x National Average
Natural gas and oil industry provides nearly $300 Billion annually in labor income
(API PWC Study, 2007)
Natural Gas Is Key Ingredient in Everyday Products
Manufacturers Consume One-third of Natural Gas to Make Products
Additional Jobs Associated with Those Products
Oil & Natural Gas Industry Contributes $570 Billion to Economy Annually (Source: API PWC Study, 2007)
15
Natural Gas Has a Long-term Role to Play
Source: EIA 2009 Energy Outlook
Market Chooses Natural Gas for Variety of Reasons: Emissions
Tons annually per 1,000 households
Market Chooses Natural Gas for Variety of Reasons: Reliability
$ millions per 1,000 households (2007)
Market Chooses Natural Gas for Variety of Reasons: Cost
Partnership Necessary to Achieve Climate Goals