Colorado Energy & Environmental Issues Chris Hansen, PhD Senior Advisor, Janys Analytics Candidate, Colorado House of Representatives
Oil 2
Thousand Barrels per Day U.S. Crude Oil Production & Consumption, 1973-215 As of 214, 73% of petroleum products consumed in the U.S. are produced domestically; up from 6% in 212 25, 2, 15, 1, 5, U.S. Consumption U.S. Production Source: U.S. Department of Energy, Energy Information Administration. *215 year-to-date represents January to July average.
Thousand Barrels per Day 14, Global Crude Oil Production Leaders, 21-214 Multiple sources indicate that once final data for 214 is tabulated, the U.S. will rank first in global production 12, 3.9% - CAGR 11.3% 1.3% U.S. ranks 2nd in global production with 11.1 million barrels/day KWT, 3.6% Top Oil Producing Countries, 214 VEN, 3.4% 21 211 212 1, IRQ, 3.7% IRN, 3.9% UAE, 3.9% Other, 33.4% 213 214 8, 6, CAN, 4.8% CHN, 4.9% RUS, 12.4% USA, 12.7% SAU, 13.2% 4, 1.1% 6.4% 4.7% -6.6% 8.% 6.4% -1.3% 2, SAU USA RUS CHN CAN UAE IRN IRQ KWT VEN Source: International Energy Agency. Note: Includes crude oil, natural gas liquids, feedstocks, additives, and other hydrocarbons; 214 data represent estimates. Fig. 9
Thousand Barrels per Day 4, Crude Oil Production by State, 211-215 Colorado has the fastest, average growth rate of top-1 producers; U.S. 211 to 215 compound annual growth rate (CAGR) was 13.6% 24.7% - CAGR 3,5 3, 2,5 2, 211 212 213 214 215 YTD* 1,5 1, 29.6% CO ranks 7th in production 32, barrels per day 5 1.2% -3.6% 2.6% 15.4% 31.2% 14.1% -1.9% 2.9% TX ND CA AK NM OK CO WY LA KS Source: U.S. Department of Energy, Energy Information Administration. Note: Crude oil includes lease condensate recovered as liquid from natural gas wells. *215 year-to-date represents January to July. Fig. 2
Barrels per Day per Rig U.S. Shale Oil Production per Rig by Major Resource Play New well production in the Niobrara formation has increased by a factor of six since 211 9 8 7 6 5 Bakken (MT, ND) Eagle Ford (TX) Haynesville (TX, LA) Marcellus (OH, NY, PA, WV) Niobrara (CO, WY) Utica (OH, NY, PA) Permian (TX) 4 3 2 1-27 28 29 21 211 212 213 214 215 Source: U.S. Department of Energy, Energy Information Administration. Note: Does not include legacy production; 215 data through September. Fig. 4
Natural Gas
Billion Cubic Feet (Bcf) per Day U.S. Natural Gas Production & Consumption Domestic production has increased steadily since 26; consumption surge due to 9 GDP growth and fuel switch from coal 8 7 6 5 U.S. Consumption by End-Use, 214 4 3 2 1 U.S. Production U.S. Consumption Industrial 28.6% Electric Power 3.5% Residential 19.1% Commercial 13.% Vehicle Fuel.1% Lease & Plant Fuel 5.6% Pipeline & Distribution 3.1% Source: U.S Department of Energy, Energy Information Administration. *215 year-to-date represents January to July.
Billion Cubic Feet (Bcf) per Day Global Natural Gas Production Leaders, 21-214 Top 1 producers account for 67% of global production 75 7 65 6 55 5 45 4.9% - CAGR -.5% U.S. ranks 1st with 2.6% of global production 7.3 Bcf per day Top Natural Gas Producing Countries, 214 ALG 2.3% SAU 2.4% TKM 2.5% NOR 3.2% CHN 3.7% Other 33.1% 21 211 212 213 214 4 QAT 4.5% USA 2.6% 35 3 CAN 4.6% IRN 4.8% RUS 18.3% 25 2 15 4.%.5% 7.3% 8.2% -.1% 1 17.7% 3.4% -1.5% 5 USA RUS IRN CAN QAT CHN NOR TKM SAU ALG Source: International Energy Agency. Note: 214 data represent estimates. Fig. 19
Billion Cubic Feet (Bcf) per Day 25 Natural Gas Production by State, 21-214 Colorado's production has remained stable since 21; U.S. production has increased at an annual rate of 4.8% since 21 2 15 3.3% - CAGR 21 211 212 213 214 1 64.6% CO ranks 6th in production 4.2 Bcf per Day 5.8% -2.% 5.8% 4.9% -2.3% 39.9% TX PA OK LA WY CO AR NM WV OH 57.9% Source: U.S. Department of Energy, Energy Information Administration. Fig. 12
The Unconventional Revolution Key Oil and Gas Plays Bakken Niobrara Marcellus Barnett Haynesville = Oil = Gas = CBM = Horizontal Eagle Ford
Colorado Key Oil and Gas Plays 29-213 Denver Basin Niobrara Piceance Basin 7,5 sq miles 4 Bboe oil & wet gas San Juan Basin CBM Raton Basin CBM
Billion Cubic Feet per Day U.S. Shale Gas Production by Major Resource Play 4.5 bcf per day in the Niobrara formation as of September 215 5 45 4 35 3 Bakken (MT, ND) Utica (OH, NY, PA) Niobrara (CO, WY) Permian (TX) Eagle Ford (TX) Haynesville (TX, LA) Marcellus (OH, NY, PA, WV) 25 2 15 1 5-27 28 29 21 211 212 213 214 215 Source: U.S. Department of Energy, Energy Information Administration. Note: Excludes legacy production; 215 data through September. Fig. 17
North American gas supply is plentiful and low cost Breakeven Henry Hub price for natural gas resources in 17 analyzed unconventional plays 1 years consumption (242 Tcf) 5 years consumption (1,211 Tcf) 25 years consumption (66 Tcf) IHS estimates total resources at greater than 3, Tcf Note: Proved, possible, and potential resources; Mcf = thousand cubic feet. 112-6 Source: IHS CERA
Regional natural gas price differentials: here to stay in the long term 25 2 US Dollars (Real 211) per MMBtu 15 Term Brent oil Market Oil pricing Asian pricing 1 5 Market Term Henry Hub European pricing North American pricing 2 25 21 215 22 225 23 235 Note: MMBtu = million Btu. Source: IHS CERA
Bcf per day Components of US natural gas demand growth relative to 28 22 2 18 16 14 12 1 8 6 4 2 Mexico exports NGVs Other gas-intensive manufacturing Chemicals LNG exports Coal retirements Power growth Coal displacement Source: IHS CERA 29 21 211 212 213 214 215 216 217 218 219 22
213 IHS Coal
Million Short Tons 5 U.S. Coal Production by State, 21-214 65% of Colorado coal is shipped beyond state borders; 1% shipped internationally; policy and market changes are reducing domestic demand -2.2% - CAGR 45 4 35 3 21 211 212 213 214 25 2 15-3.7% -5.9% Colorado ranks 1th with 24 million short tons 1 5.8% 11.7% -.1% 1.3% 2.4%.1% -.9% WY WV KY PA IL MT TX IN ND CO Source: U.S. Department of Energy, Energy Information Administration. Note: Short ton equals 2, pounds. 213 IHS Fig. 22
Megawatts U.S. Coal Additions and Retirements, 24-214 Global demand increasing while U.S. demand decreasing due to economics and policies 6, U.S. Capacity Added 4, U.S. Capacity Retired Net Gain/Loss 2, -2, -4, -6, As a result of the Clean Air Clean Jobs Act of 21, Colorado has retired, or is in the process of retiring, 1,98 MW of coal fired power plants -8, Source: 213 Platts. IHS 24 25 26 27 28 29 21 211 212 213 214 Fig. 24
213 IHS Power
195 1952 1954 1956 1958 196 1962 1964 1966 1968 197 1972 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 214 % of Generation 1% U.S. Net Generation History by Resource, 195-215 9% 8% 7% 6% 5% 4% 3% 2% 1% Renewables Hydro Nuclear Natural Gas Oil Coal % Source: U.S Department of Energy, Energy Information Administration. *215 data represent January through June. 213 IHS
Colorado Nameplate Capacity & Net Generation, 214 Available installed capacity compared to utilized capacity Colorado Operating Nameplate Capacity 16.3 gigawatts of installed capacity Solar 1% Colorado Net Generation by Resource 52,91 gigawatt hours of total generation Hydro 2% Solar % Hydro 7% Wind 16% Natural Gas 41% Wind 14% Natural Gas 22% Coal 35% Coal 62% Source: SNL Energy. Note: Electricity use by sector - Industrial (28%), Residential (34%), Commercial (38%); figures exclude idled power plants and distributed generation. Fig. 44
Renewable Energy Policies, 215 Colorado has a Renewable Portfolio Standard (RPS) of 3% by 22 for investor owned utilities, 2% by 22 for rural cooperatives, and 1% by 22 for large municipalities WA: 15% x 22* OR: 25%x 225* (large utilities) CA: 33% x 22 NV: 25% x 225* UT: 2% x 225* AZ: 15% x 225* MT: 15% x 215 CO: 3% by 22 (IOUs) * NM: 2%x 22 (IOUs) DSIRE www.dsireusa.org / June 215 ND: 1% x 215 SD: 1% x 215 KS: 2% x 22 OK: 15% x 215 MN:26.5% x 225 (IOUs) 31.5% x 22 (Xcel) IA: 15 MW MO:15% x 221 WI: 1% 215 IL: 25% x 226 MI: 1% x 215* IN: OH: 12.5% 1% x x 226 225 NY: 29% x 215 VA: 15% x 225 NC: 12.5% x 221 (IOUs) SC: 2% 221 DC ME: 4% x 217 NH: 24.8 x 225 VT: 75% x 232 MA: 15% x 22(new resources) 6.3% x 216 (existing resources) RI: 14.5% x 219 CT: 27% x 22 NJ: 2.38% RE x 22 + 4.1% solar by 227 PA: 18% x 221 DE: 25% x 226* MD: 2% x 222 DC: 2% x 22 HI: 1% x 245 Renewable portfolio standard Renewable portfolio goal * Extra TX: 5,88 MW x 215* U.S. Territories NMI: 2% x 216 Guam: 25% x 235 PR: 2% x 235 USVI: 3% x 225 credit for solar or customer-sited renewables Includes non-renewable alternative resources 29 States + Washington DC + 3 territories have a Renewable Portfolio Standard (8 states and 1 territories have renewable portfolio goals) Fig. 53
Megawatts 18, Total Installed Wind Capacity, 211-215 More than 4 MW of new wind capacity is projected to come online in Colorado in 216 9.4% - CAGR 16, 211 14, 212 12, 213 214 1, 215 YTD* 8, 15.% 9.2% CO ranks 1th 2,583 MW 6, 23.9% 12.1% 8.6% 23.6% 8.4% 4, 7.9% 14.8% 2, TX CA IA OK IL OR KS WA MN CO Source: SNL Energy. *215 year-to-date represents capacity as of September. Fig. 29
Megawatts Total Installed Solar Capacity, 21-214 More than 29 MW of new solar capacity projected to come online in Colorado 216; over half of U.S. installed solar capacity (15,668 MW) is in California 1, 9, 61.9% - CAGR 8, 7, 6, 5, 21 211 212 213 214 4, 3, CO ranks 9th 316 MW 2, 9.8% 46.4% 1, 63.7% 5.6% 71.5% 29.1% 37.% 29.6% 57.% CA AZ NJ NC MA HI NV NY CO TX Source: Solar Electric Power Association (SEPA); solar includes residential, commercial, and utility-scale installations. Fig. 3
Dollars per Megawatt Hour ($/MWh) Price of Wind, 29-214 Levelized cost of wind has decreased significantly since 29 $45 $4 $35 $3 $25 $2 $15 $169 $148 The average price of wind declined over 56% from 29-214 $1 $11 $99 $92 $95 $95 $81 $5 $5 $48 $45 $ 29 21 211 212 213 214 Source: Lazard. Note: $/MWh range is due to site and type of technology; levelized cost does not include tax incentives; price range expressed on annual basis. $37 Fig. 4
Dollars per Megawatt Hour ($/MWh) Price of Solar, 29-214 Levelized Cost of Solar has decreased significantly since 29 $45 $4 $394 $35 $3 $323 $27 The average price of solar declined 78% from 29-214 $25 $2 $226 $166 $15 $148 $149 $14 $1 $11 $91 $86 $5 $72 $ 29 21 211 212 213 214 Source: Lazard. Note: $/MWh range is due to site and type of technology; levelized cost does not include tax incentives; price range expressed on annual basis. Fig. 41
Policy & Economic Impacts
CO 2 Emissions (metric tons per capita) 25 Global CO 2 Emissions per Capita, 1995-214 U.S. per-capita emissions decreasing; 18.8 metric tons per capita in 214 2 15 1 SAU USA AUS RUS JPN GER SAF CHN BRA IND 5 Source: BP Statistical Review; The World Bank. Note: Carbon emissions reflect consumption of oil, gas and coal, and are based on standard global average conversion factors. Fig. 47
CO 2 Emissions (billion metric tons) 12 Global CO 2 Emissions by Country, 1995-214 Global CO 2 emissions in 214 were 35.5 billion metric tons 1 8 6.% - CAGR.2% In 214, China (9.8 billion metric tons) and the U.S. (6 billion metric tons) accounted for 27.5 percent of global CO 2 emissions 1995 2 25 21 214 6 4 5.4% 2 -.2%.2% -.8% 3.2% 4.8% 4.7%.9% CHN USA IND RUS JPN GER KOR SAU IRN CAN Source: BP Statistical Review; The World Bank. Note: Carbon emissions reflect consumption of oil, gas and coal, and are based on standard global average conversion factors. Fig. 48
Colorado Employment U.S. Employment 6, 5, Colorado Fossil Fuels Direct Employment Colorado fossil fuels sector employed 49,46 direct workers in 215 Colorado United States 2,, 1,8, 1,6, 4, 1,4, 1,2, 3, 1,, 8, 2, 6, 1, 4, 2, 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 29-21; Market Analysis Profile, 211-215. Note: Employment represents the coal, oil, gas, pipeline, refinery, generation, transmission, distribution, and engineering services sectors. Fig. 6
Colorado Employment U.S. Employment 3, 25, Colorado Cleantech Direct Employment Colorado cleantech sector is growing; 25,26 direct employees in 215 Colorado United States 9, 8, 7, 2, 6, 15, 5, 4, 1, 3, 5, 2, 1, 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 Source: Dun & Bradstreet, Inc.; Marketplace database, July-September, 29-21; Market Analysis Profile, 211-215. Note: Employment represents the solar, wind, geothermal, fuel cell, efficiency, storage, green transportation, cleantech R&D, and environmental consulting sectors. Fig. 62
Economic Impact, 215 The economic impact of Colorado s energy industry was $17.2 billion with 74,72 direct energy workers supporting an additional 188,89 indirect workers, for a total of 263,61 employees statewide 25,26 direct cleantech Workers support an additional 62,5 indirect workers with an economic impact of $3.6 billion annually 21% Fossil Fuels Cleantech 79% 49,46 direct fossil fuels workers support an additional 126,39 indirect workers with an economic impact of $13.6 billion annually Source: 215 Metro Denver EDC Energy Industry Cluster Study. Note: Economic impacts represent the benefits of employee earnings. Fig. 65
Billions of Dollars Colorado GDP by Sector, 213 The energy cluster in Colorado represents 7.9 percent of the state's Gross Domestic Product (GDP); GDP is the value of all finished goods and services produced in the state 5 4 Real GDP for Colorado's energy cluster was $21.2 Billion in 213 3 Colorado's 213 real GDP was $267.2 Billion 2 1 Source: U.S. Department of Commerce, Bureau of Economic Analysis; Economic Modeling Specialists International (EMSI). Note: Data represent real GDP in chained 29 dollars. Colorado energy cluster GDP is not discrete; it consists of parts of several sectors. Fig. 66
Colorado Energy Policy Landscape 216: State-wide Fracking Ban Ballot Measures Fail Implement (or expand) existing RPS targets and goals Increase efficiency programs State Emissions Targets? Future: Support residential energy efficiency Improve transmission permitting process Implement EPA s Clean Power Plan? Carbon Markets?
Chris Hansen, PhD +1 72 243 2546 chris@hansenforcolorado.com 36