Scott Prestidge Metro Denver EDC Energy Industry Manager

Scott Prestidge Metro Denver EDC Energy Industry Manager

Metro Denver EDC Energy Trade Association 140 Members 70 Companies/Organizations Diverse: Vestas, RES Americas, Anadarko, Xcel, Tri-State, COGA, CCIA, Colorado School of Mines, NREL, etc. Promote Colorado Energy Industry Cluster Workforce, Suppliers, Commodities, Service Providers, Educational Institutions

Resource Rich Colorado Colorado s National and Global Position in the Energy Economy Fourth Edition, December 2012

Resource Rich Colorado Acknowledgements Competitive Analysis Committee Members Chris Hansen, IHS, Committee Chair John Armstrong, Enserca LLC. Beth Chacon, Xcel Energy Brian Payer, URS Corporation Matthew T. Palmer, Encana Marketing (USA) Inc. Larry Holdren, Pure Brand Communications

Oil

Dollars per Barrel 120 100 Crude Oil Prices, 1999-2011 Colorado produced oil prices trend below the national average; U.S. average price in 2011 was $94.88 per barrel U.S. Crude Oil $/Barrel Colorado Crude Oil $/Barrel Colorado crude oil $88.26 80 60 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: U.S. Department of Energy, OK-WTI, Energy Information Administration Fig. 1

Million Barrels per Year 600 Crude Oil Production by State, 2008-2011 Colorado ranks 10th in crude oil production; Colorado production is on the rise 500 400 2008 2009 2010 2011 300 200 100 CO ranks 10th in production 39 million barrels 0 TX AK CA ND OK NM LA WY KS CO Source: U.S. Department of Energy, Energy Information Administration Note: Crude oil includes all liquid hydrocarbons at surface, including lease condensates Fig. 2

Million Barrels Crude Oil Reserves & Utilization Rate Technology improvements contribute to growing reserves 7,000 6.72% 6,000 Reserves 2009 5,000 Reserves 2010 Production 2010 4,000 5.91% 3,000 2,000 6.84% 5.99% CO ranks 10th in reserves at 501 million barrels with a 6.59% annual utilization rate 1,000 7.34% 7.05% 6.44% 12.64% 4.83% 0 TX AK CA ND OK NM WY LA UT CO Source: U.S. Department of Energy, Energy Information Administration Note: Utilization rate is the amount of reserves developed/produced annually; crude oil reserves include lease condensate Fig. 3

Million Barrels Oil Production Leaders, 2008-2011 U.S. ranks 3rd in production; domestic production on the rise 4000 3500 3000 U.S. ranks 3rd in global production with 2.54 billion barrels Top eight producers represent over 50% of global production; total global production for 2011 was 29.4 billion barrels. 2500 2008 2009 2000 2010 2011 1500 1000 500 0 Saudi Arabia Russia U.S. Iran China Canada United Arab Emirates Source: International Energy Agency (IEA), 2009-2012 Key World Energy Statistics Note: Includes crude oil, natural gas liquids, feedstocks, additives, and other hydrocarbons Venezuela Fig. 4

Million Barrels Top Net Exporters of Crude Oil, 2008-2010 OPEC nations and Russia dominate the export market 3000 2500 2000 2007 2008 2009 2010 1500 1000 500 0 Saudi Arabia Russia Nigeria Iran United Arab Iraq Venezuela Angola Emirates Source: International Energy Agency, 2010-2012 Key World Energy Statistics Note: Includes crude oil, natural gas liquids, feedstocks, additives and other hydrocarbons Fig. 5

Million Barrels Top Net Importers of Crude Oil, 2007-2010 U.S. ranks 1st in oil imports; U.S. imports are declining 4500 4000 U.S. ranks 1st in oil imports with 3.76 billion barrels 3500 3000 2500 2007 2008 2009 2010 2000 1500 1000 500 0 U.S. China Japan India South Korea Germany Italy France Source: International Energy Agency, 2009-2012 Key World Energy Statistics Note: Includes crude oil, natural gas liquids, feedstocks, additives and other hydrocarbons Fig. 6

Number of Oil Rigs Oil Rig Count, 2008-2011 Number of oil rigs increasing along with increasing production 500 450 400 350 2008 2009 2010 2011 300 250 200 150 100 CO ranks 11th in oil rig count 7 rigs 50 0 TX ND OK NM KS CA LA WY UT MT CO Source: Smith Bits Note: Top 10 states plus Colorado Fig. 7

Million Barrels per Day 25 U.S. Crude Oil Production & Consumption, 1973-2011 The gap is narrowing, as domestic production has increased since 2009 and domestic consumption has decreased since 2006 20 15 10 Where does the U.S. get its oil? U.S., 38.8% Other, 3.1% Latin America, 19.6% Canada, 15.1% Africa, 10.3% Persian Gulf, 12.9% 5 U.S. Oil Consumption U.S. Oil Production 0 Source: U.S. Department of Energy, Energy Information Administration; NPR in conjunction with Nelson Hsu Fig. 8

Natural Gas

Dollars per Thousand Cubic Feet 9 Natural Gas Wellhead Prices, 1999-2011 The Colorado price trends below the national average to account for fuel transportation costs to markets outside the state 8 U.S. Natural Gas Colorado Natural Gas 7 6 CO price in 2011 was $3.75 5 4 3 2 1 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: U.S. Department of Energy, Energy Information Administration Fig. 9

Trillion Cubic Feet (Tcf) 7 Natural Gas Production by State, 2007-2010 Colorado ranks 5th in production; production is increasing due to resource development technology improvements 6 5 4 2007 2008 2009 2010 3 CO ranks 5th in production 1.5 (Tcf) 2 1 0 TX WY LA OK CO NM AR PA UT AK Source: U.S. Department of Energy, Energy Information Administration Note: Top 10 producers including Colorado Fig. 10

Trillion Cubic Feet (Tcf) 100 90 80 7.38% Natural Gas Reserves & Utilization Rate Technology is contributing to growing reserves nationwide 2009 Reserves 2010 Reserves 70 2010 Production 60 50 40 30 6.02% 10.05% 7.05% CO ranks 5th in reserves at 25.37 (Tcf) with a 6.21% utilization rate 20 10 7.21% 8.52% 8.09% 0 TX WY LA OK CO NM AR PA Source: U.S. Department of Energy, Energy Information Administration Note: Top eight states including Colorado; utilization rate is the amount of reserves developed/produced annually Fig. 11

Trillion Cubic Feet (Tcf) 30 Natural Gas Production Leaders, 2008-2011 U.S. is 2nd and growing; top 8 producers equal 61.6% of global production 25 20 U.S. ranks 2nd with 19.2% of global production 22.99 (Tcf) 2008 2009 2010 2011 15 10 5 0 Russia U.S. Canada Qatar Iran Norway China Indonesia Source: International Energy Agency Fig. 12

Trillion Cubic Feet (Tcf) 8 Top Net Exporters of Natural Gas, 2008-2011 The U.S. has a limited amount of natural gas export infrastructure 7 6 5 2008 2009 2010 2011 4 3 2 1 0 Russia Qatar Norway Canada Algeria Indonesia Netherlands Turkmenistan Source: International Energy Agency Fig. 13

Trillion Cubic Feet (Tcf) Top Net Importers of Natural Gas, 2008-2011 U.S. imports declining due to increases in domestic production 4.5 4 3.5 3 2.5 U.S. ranks 4th in natural gas imports 1.94 (Tcf) 2008 2009 2010 2011 2 1.5 1 0.5 0 Japan Italy Germany U.S. South Korea Ukraine Turkey France Source: International Energy Agency Fig. 14

Fig15

Billion Cubic Feet per Day 22 U.S. Shale Gas Production by Major Resource Play Technology has led to quickly expanding resource development 20 18 16 14 Eagle Ford (TX) Woodford (OK) Marcellus (OH, WV, PA, NY) Haynesville (TX, LA) Fayetteville (AR) Barnett (TX) 12 10 8 6 4 2-2007 2008 2009 2010 2011 Source: HPDI; Encana Corporation Fig. 16

Number of Gas Rigs Natural Gas Rig Count, 2008-2011 Lower prices contributing to lower natural gas rig counts 800 700 600 2008 2009 2010 500 2011 400 300 200 CO ranks 5th in annual natural gas rig count 48 rigs 100 0 TX LA PA OK CO AR WV WY OH KY Source: Smith Bits Note: Top 10 states including Colorado Fig. 17

Trillion Cubic Feet (Tcf) U.S. Natural Gas Production & Consumption Domestic production has increased steadily since 2006 30 25 20 15 10 Natural Gas Production Natural Gas Consumption 5 0 1950 1960 1970 1980 1990 2000 2010 Source: U.S Department of Energy, Energy Information Administration Fig. 18

Coal

Dollars per Short Ton $120 Coal Prices by State, 2010 Price differences may be due to variations in production costs, transportation costs, and coal qualities $100 $98.46 $86.15 $80 $60 $70.07 $66.45 $62.51 $60.84 $56.95 CO ranks 12 th in coal prices $40 $49.46 $47.54 $43.24 $40.00 $20 $0 VA AL WV TN PA KY OK IL MD OH CO Source: U.S. Department of Energy, Energy Information Administration Note: Top 10 states plus Colorado; short ton equals 2,000 pounds Fig. 19

Million Short Tons 500 U.S. Coal Production by State, 2008-2011 Colorado coal production recovering after low point in 2010 450 400 350 300 2008 2009 2010 2011 250 200 150 100 Colorado ranks 11th with 27 million short tons 50 0 WY WV KY PA MT TX IN IL ND OH CO Source: U.S. Department of Energy, Energy Information Administration Note: Top 10 states plus Colorado; short ton equals 2,000 pounds Fig. 20

Billion Short Tons 80 U.S. Coal Reserves & Utilization Rate, 2010 Percent equals utilization rate of state reserves; coal reserves are massive, contributing to an extremely small utilization rate 0.06% 70 60 50 40 1.16% 0.09% 30 20 0.78% 0.73% 0.52% 0.24% CO ranks 8th in reserves with 9.61 billion short tons and has a 0.26% utilization rate 10 0.44% 0.29% 0.43% 0.89% 0 MT WY IL WV KY PA OH CO TX NM ND IN Source: U.S. Department of Energy, Energy Information Administration; Note: Reserves are "Estimated Recoverable Reserves"; short ton equals 2,000 pounds; 2010 is most recent year for domestic coal reserves data Fig. 21

Billion Short Tons 4.5 Global Coal Production Leaders, 2008-2011 U.S. production holding steady as resource diversity expands; China coal production is increasing rapidly to match growing demand 4 3.5 3 2.5 2 1.5 U.S. ranks 2nd with 1.09 billion short tons 2008 2009 2010 2011 1 0.5 0 China U.S. India Australia Indonesia Russia South Africa Germany Poland Kazakhstan Source: U.S. Department of Energy, Energy Information Administration Fig. 22

Billion Short Tons 300 Top Recoverable Coal Reserves, 2009 The U.S. holds the largest coal reserves in the world 250 U.S ranks 1st in proved coal reserves 263 billion short tons 200 150 100 Global coal production is approximately 8 billion short tons per year 50 0 U.S. Russia China Australia India Ukraine Kazakhstan South Africa Source: BP Statistical Review of World Energy, June 2010; U.S. Department of Energy, Energy Information Administration Note: Short ton equals 2,000 pounds; 2009 is most recent year for global data; recoverable" is based on current economics and technology Fig. 23

Million Short Tons 400 Top Net Exporters of Coal, 2008-2011 U.S. exports are increasing to meet global demand 350 300 250 2008 2009 2010 2011 200 150 U.S. ranks 4th in coal exports 94 million short tons 100 50 0 Indonesia Australia Russia U.S. Colombia South Africa Kazakhstan Canada Source: International Energy Agency, Key World Energy Statistics, 2009-2012 Fig. 24

Million Short Tons 250 Top Net Importers of Coal, 2009-2011 The U.S. has no significant imports of coal 200 150 2008 2009 2010 2011 100 50 0 China Japan South Korea India Taiwan Germany U.K. Turkey Source: International Energy Agency, Key World Energy Statistics, 2009-2012 Fig. 25

Renewables

Megawatts Total Installed Wind Capacity, 2009-2011 Widespread growth in wind installations; Texas is leading the way 12,000 10,000 8,000 6,000 2009 2010 2011 4,000 CO ranks 9th 1,803 MW 2,000 - Source: SNL Energy TX IA CA IL MN OR WA OK CO ND Fig. 26

Megawatts Total Installed Solar Capacity, 2009-2011 Significant growth in solar installations; California is leading the way 2,000 1,800 1,600 1,400 1,200 1,000 2009 2010 2011 800 600 CO ranks 4th 151 MW 400 200 - CA NJ AZ CO FL NV NY NM HI TX Source: Solar Electric Power Association Fig. 27

Megawatts Total Installed Biomass Capacity, 2009-2011 Colorado is below the national trend 1,200 2009 1,000 2010 2011 800 600 400 CO ranks 37th 17 MW 200 - Source: SNL Energy Note: Top 10 states plus Colorado CA FL ME VA GA AL PA LA MN NY CO Fig. 28

Megawatts Total Installed Geothermal Capacity, 2009-2011 There are few players in geothermal electric generation 2,500 2009 2,000 2010 2011 1,500 1,000 500 No utility-scale Colorado geothermal generating capacity - CA NV HI UT ID AK OR WY CO Source: SNL Energy Note: Vast majority of states have no utility-scale geothermal capacity Fig. 29

Megawatts Total Installed Hydropower Capacity, 2009-2011 No recent growth in hydropower capacity 25,000 2009 20,000 2010 2011 15,000 10,000 CO ranks 19th 1,226 MW 5,000 - Source: SNL Energy Note: Top 10 states plus Colorado WA CA OR NY SC VA GA AL AZ ID CO Fig. 30

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Power

Dollars per Megawatt Hour 180 160 140 120 Levelized Costs for Electric Generation Plants Assuming a plant start date of 2017, the total levelized cost measures competitiveness of different generating technologies; levelized costs include transmission, fuel, operations and maintenance, and capital Transmission Investment Variable O&M (including fuel) Fixed O&M Levelized Capital Cost 100 80 60 40 20 0 Combined Wind Geothermal Advanced Advanced Biomass Combustion Solar PV Cycle Coal Nuclear Turbine Source: U.S. Department of Energy, Energy Information Administration Note: 2017 is referenced due to the long lead time required for some technologies and projects; estimates expressed above will vary by region Fig. 33

% of Generation 100% Net Generation History by Resource, 1950-2012 90% 80% 70% 60% 50% 40% 30% 20% 10% Renewables Hydro Nuclear Natural Gas Oil Coal 0% Source: U.S Department of Energy, Energy Information Administration Fig. 34

U.S. Nameplate Capacity vs. Net Generation, 2011 Available installed capacity versus utilized capacity U.S. Operating Nameplate Capacity by Resource 1.14 terawatts of installed capacity U.S. Net Generation by Resource 4,123 terawatt hours of total generation Oil 5% Nuclear 9% Hydro 9% Renewables 6% Coal 30% Renewables Hydro 5% Oil 8% 1% Nuclear 19% Coal 43% Gas 41% Gas 24% Source: U.S. Department of Energy; Energy Information Administration Fig. 35

Average Capacity Factor (%) Average U.S. Capacity Factor by Resource, 2011 The average capacity factor of a power plant is the ratio of actual output per year compared to the output of operating at full nameplate capacity 100 90 80 70 60 50 40 30 20 10 0 Nuclear Coal Hydro Wind Natural Gas Oil Source: U.S. Department of Energy, Energy Information Administration Fig. 36

Cents per Kilowatt Hour 40 35 Average Residential Retail Electric Price, 2011-2012 Colorado has the 18th most expensive residential retail electricity price 2011 2012 30 25 20 U.S. 2012 average 12.04 cents/kwh CO ranks 18th with 12.23 cents/kwh 15 10 5 0 HI AK NY CT VT NJ NH CA MI ME CO Source: U.S. Census; U.S. Department of Energy, Energy Information Administration Note: Top 10 states plus Colorado Fig. 40

Cents per Kilowatt Hour 40 Average Commercial Retail Electric Price, 2011-2012 Colorado has the 24th most expensive commercial retail electricity price 35 2011 2012 30 25 20 U.S. 2012 average 10.44 cents/kwh CO ranks 24th with 9.73 cents/kwh 15 10 5 0 HI NY CA AK CT VT MA NJ NH DC CO Source: U.S. Census; U.S Department of Energy, Energy Information Administration Note: Top 10 states plus Colorado Fig. 41

Cents per Kilowatt Hour Average Industrial Retail Electric Price Colorado has the 20th most expensive industrial retail electricity price 35 30 2011 2012 25 20 15 U.S. 2012 average 7.18 cents/kwh CO Ranks 20th with 7.34 cents/kwh 10 5 0 HI AK MA CT NH NJ CA RI VT DE CO Source: U.S. Census; U.S Department of Energy, Energy Information Administration Note: Top 10 states plus Colorado Fig. 42

Environment & Sustainability

CO 2 Emissions per Capita (million metric tons) CO 2 Emissions Per Capita, 1960-2008 25 U.S. CO 2 emissions per capita have declined from a peak of 22.5 million metric tons in 1973 to 18.0 million 20 15 United States 10 China accounted for 25% of the world's total CO 2 emissions in 2008 (7.7 billion metric tons) while the U.S. was the second largest CO 2 emitter with 17% (5.3 billion metric tons) World China 5 0 Source: Carbon Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory Fig. 43

CO 2 Emissions (billion metric tons) CO 2 Emissions by Country, 2009 Top 10 countries account for 68% of world CO 2 emissions 9 8 25% Percentages reflect share of total global CO 2 emissions 7 6 5 17% China accounted for 25% of the world's total CO 2 emissions (7.7 billion metric tons) while the U.S. accounted for 17% (5.3 billion metric tons) 4 3 2 7% 5% 1 4% 2% 2% 2% 2% 2% 0 China U.S. India Russia Japan Germany Iran Canada South Korea South Africa Source: Carbon Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory Fig. 44

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LEED-Certified Space per Capita (sq. ft.) Square Footage of LEED-Certified Space, 2011 Colorado has highest amount of LEED-certified space per capita 3.0 2.74 2.69 2.5 2.42 2.0 2.18 2.07 2.00 1.99 1.92 1.89 1.81 1.5 1.0 0.5 0.0 CO IL VA WA MD MA TX CA NY MN Source: U.S. Green Building Council Fig. 46

Energy Policies & Programs

Energy Efficiency Policies, 2012 Colorado requires electricity sales and demand to be reduced by 5% of 2006 numbers by 2018; natural gas savings requirements vary by utility Source: Database of State Incentives for Renewables & Efficiency (DSIRE) Fig. 47

Renewable Energy Policies, 2012 Colorado has a Renewable Portfolio Standard (RPS) of 30% by 2020 for investor owned utilities and 10% by 2020 for rural cooperatives and large munis Source: Database of State Incentives for Renewables & Efficiency (DSIRE) Fig. 48

Net Metering Policies, 2012 Colorado requires that a customer's excess generation during a calendar year be reimbursed by their utility 43 states, + Washington DC & 4 territories have adopted a net metering policy. Source: Database of State Incentives for Renewables & Efficiency (DSIRE) Note: Numbers indicate individual system capacity limit in kilowatts Fig. 49

Cents per Gallon 60 State Gasoline Tax, 2012 Colorado ranks 33rd in the nation; well below the national average 50 40 National Average 27.3 Cents per Gallon Colorado 22.0 Cents per Gallon 30 20 10 0 NY CA CT HA MI NC IL IN WA FL CO Source: American Petroleum Institute Note: Top 10 states plus Colorado Fig. 50

U.S. Dollar per Gallon $10.00 Global Retail Prices of Premium Unleaded, 2012 U.S. gasoline is inexpensive compared to most countries; limited resources, limited infrastructure, and fuel taxes contribute to higher prices $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Turkey Italy Belgium Germany U.K. South Japan Australia Chile Canada U.S. Mexico Korea Source: International Energy Agency, 2012 Key World Energy Statistics Note: Gasoline prices are from 1st quarter of 2012 Fig. 51

Number of Leases 20,000 Number of Drilling Leases on Public Lands Colorado has 3rd highest number of drilling leases; large amount of public lands within Colorado borders 18,000 16,000 14,000 FY 2008 FY 2009 FY 2010 12,000 10,000 8,000 CO ranks 3rd in number of leases 5,343 leases FY 2011 6,000 4,000 2,000 0 WY NM CO UT MT ND NV OK AR MS Source: Bureau of Land Management, Public Lands Statistics Note: Top 10 states including Colorado Fig. 52

Million Acres 6 Number of Acres Leased for Drilling Public Lands Colorado has 3rd highest number of acres leased; increased oil and gas activity on private lands contributes to decrease in acres leased 5 CO ranks 3rd in number of acres leased 4,380,275 acres FY 2008 FY 2009 4 FY 2010 FY 2011 3 2 1 0 NM UT CO NV MT AK ND AR TX MS Source: Bureau of Land Management, Public Lands Statistics Note: Top 10 states including Colorado Fig. 53

Employment & Industry

Growth Rate (%) 15% Fossil Fuel - Number of Employees Growth Rate Brief downturn during economic recession; average annual direct employment growth rate for Colorado fossil fuel sector is 3.6%, 2007-2012 United States Colorado 10% 5% 0% -5% The fossil fuel subcluster directly employed 43,430 workers in Colorado in 2012-10% 2007 2008 2009 2010 2011 2012 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 2006-2010; Market Analysis Profile, 2011-2012 Fig. 54

Growth Rate (%) 15% Fossil Fuel - Number of Companies Growth Rate 2,300 fossil fuel firms operating in Colorado in 2012; number of firms in Colorado growing at a 3.5% annual average rate, 2007-2012 10% 5% 0% -5% United States Colorado -10% 2007 2008 2009 2010 2011 2012 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 2006-2010; Market Analysis Profile, 2011-2012 Fig. 55

Growth Rate (%) 15% Cleantech - Number of Employees Growth Rate Recession had minimal impact on Colorado cleantech employment growth; average annual direct employment growth rate for Colorado cleantech sector is 7.0%, 2007-2012 United States Colorado 10% 5% 0% -5% The cleantech subcluster directly employed 21,950 workers in Colorado in 2012-10% 2007 2008 2009 2010 2011 2012 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 2006-2010; Market Analysis Profile, 2011-2012 Fig. 56

Growth Rate (%) 25% 20% Cleantech - Number of Companies Growth Rate 1,940 cleantech firms operating in Colorado in 2012; number of firms in Colorado growing at 5.9% average annual rate, 2007-2012 United States Colorado 15% 10% 5% 0% -5% -10% 2007 2008 2009 2010 2011 2012 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 2006-2010; Market Analysis Profile, 2011-2012 Fig. 57

Colorado Energy Cluster Economic Impact 65,400 direct energy jobs 22,000 Cleantech 43,400 Fossil Fuel Supports an additional 212,000 indirect jobs Total economic impact of Colorado s energy cluster = $13.7 billion annually

Resource Rich Colorado Fifth Edition December 2013