Facing The Hard Truths About Energy

Transcription

1 National Petroleum Council Facing The Hard Truths About Energy A Comprehensive View To 2030 Of Global Oil And Natural Gas Nancy Johnson DOE April 22,

2 The Secretary s s Suggested Questions What does the future hold for global oil and natural gas supply? Can incremental oil and gas supplies be brought on-line, on time, and at a reasonable price to meet future demand without jeopardizing economic growth? What oil and gas supply and / or demand-side strategies does the Council recommend the U.S. pursue to ensure greater economic stability and prosperity? 2

3 Dimensions of the Study Supply Economics Demand Alternative Energies Findings and Strategies Technology Environment Energy Security 3

4 How This Study Is Different Integrated, In-Depth Analysis Over 100 studies incorporated to include both public and aggregated proprietary outlooks Not another forecast of supply, demand or price Diversity of Expertise 350 participants with backgrounds in all aspects of energy including efficiency, economics, geopolitics, environment Technology Assessment Identified achievable opportunities and likely deployment timing Looked across the energy spectrum, including both supply and demand 4

5 How This Study is Different 65% participants from outside of oil and gas industry ACADEMIA/ PROFESSIONAL SOCIETIES NGOs GOVERNMENTS CONSULTANTS/ FINANCIAL OTHER INDUSTRIES OIL AND GAS INDUSTRY participants, plus input from others 5

6 Coal, Oil, and Natural Gas Will Remain Indispensable QUADRILLION BTU 445 QUADRILLION BTU 678 QUADRILLION BTU NATURAL GAS OIL COAL WIND / SOLAR / GEOTHERMAL HYDRO Source: IEA REFERENCE CASE 6 NUCLEAR BIOMASS

7 The Hard Truth: Supply The world is not running out of energy resources, but there are accumulating risks to continuing expansion of oil and natural gas production from the conventional sources relied upon historically. These risks create significant challenges to meeting projected total energy demand. 7

8 Large Oil Resource Base TRILLION BARRELS - OIL UNCONVENTIONAL CONVENTIONAL ULTIMATE RECOVERABLE RESOURCE (MEAN) Source: USGS 8

9 Oil Resource Concentration ILLUSTRATIVE PROJECTION Source USGS UNCONVENTIONAL 9 CONVENTIONAL

10 Risks Reflected in Range of Production Projections 140 MILLION BARRELS PER DAY OIL IEA Medium Term Outlook EIA Ref Case IOC average Association for Study of Peak Oil (ASPO) * Source: Data Warehouse. 10

11 Global Gas Resource Endowment DECREASING PROBABILITY OF RECOVERABLE VOLUMES Trillion Standard Cubic Feet (TCFs) (not to scale) Remaining Resources = ~15,000 (largely conventional) Lower Permeability Reservoirs and/or High Temp & High Pressure In-Place = ~50,000 Remaining Proved Reserves = ~6,400 Produced = ~3,000 TCF Source: USGS. INCREASING GEOLOGIC UNCERTAINTY 11

12 The Hard Truth: Energy Sources To mitigate these risks, expansion of all economic energy sources will be required, including coal, nuclear, biomass, other renewables,, and unconventional oil and natural gas. Each of these sources faces significant challenges including safety, environmental, political, or economic hurdles, and imposes infrastructure requirements for development and delivery. 12

13 All Sources of Energy Will Be Needed 800 WIND / SOLAR / GEOTHERMAL / HYDRO QUADRILLION BTU PER YEAR 400 Coal Gas Liquids NUCLEAR BIOMASS Source: IEA REFERENCE CASE 13

14 Contribution of Unconventional Liquids 15 Global Production MILLION BARRELS PER DAY Gas-To-Liquids Coal-To To-Liquids Extra Heavy Oil Oil Sands / Bitumen 0 Biofuels Source: Data From EIA 2007 Reference. 14

15 Massive Infrastructure Investments Required COAL UNCONV. OIL CONV. OIL UPGRADING CTL REFINING OTHER MFG. BLENDING LIQUID FUEL Supply BIOMASS GTL MFG RENEWABLES Demand LNG REGAS STORAGE NUCLEAR COAL POWER GEN. GAS GAS PROCESSING DISTRIBUTION NATURAL GAS 15

16 The Hard Truth: Energy Security "Energy Independence" should not be confused with strengthening energy security. The concept of energy independence is not realistic in the foreseeable future, whereas U.S. energy security can be enhanced by moderating demand, expanding and diversifying domestic energy supplies, and strengthening global energy trade and investment. There can be no U.S. energy security without global energy security. 16

17 OECD and Non-OECD Countries Organization for Economic Cooperation and Development (OECD) Non-OECD 17

18 The Hard Truth: Workforce A majority of the U.S. energy sector workforce, including skilled scientists and engineers, is eligible to retire within the next decade. The workforce must be replenished and trained. 18

19 U.S. Human Resources Challenge 25 OVER HALF OF THE WORKFORCE ELIGIBLE TO RETIRE IN NEXT 10 YEARS % OF U.S. WORKFORCE AGE DISTRIBUTION Source: U.S. Dept of Labor. AGE 19

20 The Hard Truth: Carbon Emissions Policies aimed at curbing carbon dioxide emissions will alter the energy mix, increase energy-related related costs, and require reductions in demand growth. 20

21 CO 2 Emission Limits Will Alter Energy Strategies Growing concern that climate is warming and CO 2 concentrations in the atmosphere play a role. The challenge of significantly reducing CO 2 emissions is unprecedented and will require: Global, broad actions on multiple fronts Long time horizons Major additional investments 21

22 Range of Global Supply Projections Gas BILLION CUBIC FEET PER DAY EIA REF. 452 IEA REF. 380 HISTORICAL TREND 0 - l 1980 l 1990 l 2000 l 2010 l 2020 l 2030 Source: Survey for the Oil & Gas Study. 22

23 Coal Supply Projections 12 (All Forecasts Normalized to 6.5 BST in 2005) Short Tons (Billions) EIA-Ref IEA-Ref IEA-Alt ASPO CCSP-IGSM-Ref CCSP-IGSM-L1 CCSP-Merge-Ref CCSP-Merge-L1 CCSP-MiniCam-Ref CCSP-MiniCam-L1 Oakridge HGSS Oakridge LGSS EC WETO Ref EC WETO C Constr EC WETO H2 23

24 Nuclear Power Outlook 24

25 Hydrogen Fuel Outlook 25

26 Five Core U.S. Strategies 26

27 The Five Core U.S. Strategies Moderate Demand by Increasing Energy Efficiency Expand and Diversify U.S. Energy Supply Strengthen Global and U.S. Energy Security Reinforce Capabilities to Meet New Challenges Address Carbon Constraints There Is No Single, Easy Solution 27

28 Expand and Diversify Supply For each strategy, the Council provides in-depth recommendations, such as: Diversify long-term energy production Accelerate development of energy from biomass Enable the long-term environmental viability of coal for power, fuel, and feedstock Expand domestic nuclear capability 28

29 All Strategies Are Essential 30 U.S. LIQUID FUELS DEMAND MILLION BARRELS PER DAY 15 U.S. LIQUID FUELS MODERATE GLOBAL TRADE (NET IMPORTS) EXPAND & DIVERSIFY YEAR Source: EIA Reference Case / Global Oil and Gas study survey. Illustrative View 29

30 There Is No Single, Easy Solution All five strategies must be addressed together Global cooperation required Begin now and plan for sustained commitment 30

31 Additional Information and Comments Facing the Hard Truths About Energy Please refer to the Website for a complete list of available resources: Send your follow-up questions and comments to: comments@npc.org 31