2002 AAPG Briefing Energy and Environment: A Partnership that Works Energy Supply Setting Pete Stark IHS Energy Group Washington, D.C. 23 September, 2002
Thesis: Public desires secure, reliable, clean, sustainable & affordable energy supplies that are available on demand. Balanced environmental and energy development policies needed to meet energy demand growth forecasts. Oil and natural gas expected to contribute dominant share of energy supplies for > 20 years.
Energy Supply Issues Confusing & conflicting information about energy supplies Challenging oil & gas demand scenarios Natural gas: the challenge & opportunity of this decade Public policy pressure for renewable resources Petroleum industry squeezed by volatile markets, financial constraints, anti-hydrocarbon pressures, regulations and limited access to prospects
Challenging Oil Demand Scenarios World Oil Demand Consumption in MMbopd 1993-99 2000-20 1993 1999 % 2000 2005 2020 % World 67.6 75.0 +11 % 75.6 84.6 118.9 56% U.S.A. 17.2 19.5 +13 % 19.7 21.2 25.8 31% Is 2020 target attainable? Source: IEA and EIA
Confusing Oil Supply Predictions Campbell - Laherrère Deffeyes School Oil ultimate recoverable: 1,694* MMMb Produced 849 Remaining 845 MMMb Reserves/Production 36 Years Oil production will peak and commence decline by the end of this decade. (* 2000 data excludes heavy oil & reserves growth.)
World Oil Resources Major Non-conventional Liquid Resources In Place 3,000,000 2,500,000 Alberta Bitumen & Orinoco Extra Heavy Oil co mpared with Saudi Arabia Remaining In Place Cumulative Production Million Barrels 2,000,000 1,500,000 1,000,000 500,000 0 Alberta Bitumen Ultimate Alberta Bitumen Established Orinoco Extra-Heavy Saudi Arabia
World Liquids Resources Including Reserves Growth, Oil Sands / Extra-heavy Oil & Yet-to-Find With Percentage Depletion at End-2001 Million Barrels 1,400,000 1,200,000 1,000,000 800,000 600,000 Cumulative Conventional Liquids Production Undiscovered Conventional Liquids (USGS) at End 2001 Remaing Oil Sands and Undeveloped Orinoco with Reserves Growth Conventional Liquids Reserves Growth Remaining Discovered Conventional Liquids at End 2001 30.5% (50.4% w/o oil sand) 17.4% (30.3% w/o Orinoco) 27.3% 21.2% 400,000 28.8% 200,000 29.7% 40.2% 0 North America Latin America Europe Former Soviet Union Africa Middle East Asia-Pacific
World Liquids Resources IHS Energy Group December 2001 Liquids Resources (million barrels) Conventional Liquids Resources Discovered to End-2001 Alberta Bitumen Orinoco Undeveloped Total Discovered Liquids Total Discovered Cumulative Production Remaining Recoverable Percent Remaining Year 2001 Production Year 2001 R/P 2,069,796 957,470 1,112,326 53.7% 26,756 42 314,500 3,080 311,420 99.0% 238 1,308 248,000 0 248,000 100.0% 0 n/a 2,632,296 960,550 1,671,746 63.5% 26,994 62 Total Discovered Liquids w ith "Reserves Growth" Total Discovered Liquids w ith "R G th" d "Y t t Fi d" 2,045,000 68.0% 76 2,848,000 74.8% 106 Remaining recoverable Campbell IHSE 845 2,848 + 2,003
International Resources Discovered vs Resources Put On-stream 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Million Barrels Oil Equivalent Pre-1901 01-05 06-10 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 76-80 81-85 86-90 91-95 96-2000 2001 Resources Discovered in Period Resources On-stream in Period (excludes USA and Canada)
Wells X 1,000 70 60 50 40 30 20 10 U.S. O&G Well Completions 1980-2001 0 80 82 84 86 88 90 92 94 96 98 20 2 OIL Gas Source: IHSE
Mb/d 13000 12000 Issue: Energy Security Dependence on Oil Imports U. S. Petroleum Imports vs. Production 1989-2002 1991 = 7,627Mb/d 2001 = 11,607Mb/d 11000 10000 9000 8000 7000 6000 5000 1991 = 7,417Mb/d 2001 = 5,848Mb/d 1989 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 2001 2002 DOE Imports IHS Prod DOE Prod
Oil Supply Volatility OPEC Quotas & Production: 1996-2002 MM Bopd 32 30 28 26 (Dec) Capacity (Dec) (Dec) (Dec) Capacity (06) (11) (04) (08) 24 22 20 1996 1997 1998 1999 2000 2001 2001 2002 2002 Quota Overage Iraq
Oil Supply & Policy Issues No near-term decline in oil supplies Crisis policies not required. Orderly transition to alternate sources. Reduce import dependency boost production Access to prospective lands Investment incentives tax credits, royalties Efficient regulatory processes reduce delays & costs Supply security: Enhance Western Hemisphere policies & alliances
World Gas Demand Consumption in Tcf/yr /yr. 1996-2000 2000-20 1996 2000 % 2010 2020 % World 80.4 91 +13 % 162 78% U.S.A. 22.07 22.5 + 2.1% ~ 27 33.8 50% September 9, 2001 U.S. 2001 ~ 22.83 + 0.2% U.S. 2002 ~ 23.81 + 4.3% U.S. 2003 Sept. 6, 2002 21.43-4.7% 22.13 + 3.3% 22.92 + 4.6% Source: EIA
World Natural Gas Resources Produced and Remaining Natural Gas Resources (Including Reserves Growth and Conventional Yet-to-Find) (With Percentage Depletion at End-2001) Billion Standard Cubic Feet 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 Cumulative Gas Production Undiscovered Gas (USGS) at End 2001 Gas Reserves Growth Remaining Discovered Gas at End 2001 48.5% Total Remaining Tcf = 11,750 Years = 124 14.5% 32.5% 15.7% 12.9% 4.9% 14.7% 500,000 0 North America Latin America Europe Former Soviet Union Africa Middle East Asia-Pacific
U.S. Energy Consumption by Fuel 1970-2020 quadtrillion Btu Source: EIA Annual Energy Review 2002 2001. Petroleum Information/Dwights LLC d/b/a IHS Energy Group.