The New Global Energy Landscape Tuesday, May 1, 2012; 2:30 PM 3:45 PM Moderator: Brian Sullivan, Anchor, CNBC Speakers: Richard Kauffman, Senior Advisor to the U.S. Secretary of Energy Alex Pourbaix, President, Energy and Oil Pipelines, TransCanada Corp. Brian Schweitzer, Governor, State of Montana Rhonda Zygocki, Executive Vice President, Policy and Planning, Chevron
How is America powered? Primary energy consumption in the U.S., 2010 Renewable Energy 8.0% Nuclear Electric Power 9.0% Source Petroleum 37.0% Coal 21.0% Natural Gas 25.0% Source: U.S Energy Information Administration.
Petroleum consumption continues to significantly outweigh renewable energy Consumption by geographic region, 2009 Asia and Oceania Africa Middle East Eurasia Europe Petroleum Renewable energy Central and South America North America Quadrillion btu Source: U.S Energy Information Administration. 0 10 20 30 40 50 60
Heating and cooling emit the most carbon dioxide in residential sectors Energy-related carbon dioxide emissions by end use, 2011 Clothes dryers 3.1% Color televisions 5.2% Refrigeration 5.5% Computers 2.8% Cooking 2.8% Dishwashers 1.4% Freezers 1.2% Clothes washers 0.5% Space heating 24.1% Lighting 10.6% Space cooling 12.2% Source: U.S Energy Information Administration. Water heating 14.0% Other uses 16.6%
Oil price volatility Global weekly oil prices US$ per barrel 150 125 100 75 50 25 0 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: U.S Energy Information Administration.
U.S. crude oil production has increased by 12 percent since 2008 Annual percentage changes in U.S. crude oil production Annual percentage change 10 8 6 4 2 0-2 -4-6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: U.S Energy Information Administration.
U.S. crude oil imports have steadily declined since 2005 U.S. crude oil imports since 2000 and projections Million barrels per day 10.5 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 2000 2005 2010 2015 2020 2025 Source: U.S Energy Information Administration. Projected
How much does the U.S. pay for crude oil? U.S. crude oil imports in dollar values (non-seasonally adjusted) US$ billions 400 350 300 250 200 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: U.S Census Bureau Foreign Trade Division.
Global renewable energy consumption is trending upwards Fossil fuel vs. renewable energy consumption Quadrillion btu 45 40 35 30 25 20 15 10 5 0 Source: U.S Energy Information Administration. Natural Gas (left) Quadrillion btu 9 Petroleum (left) 8 Renewable Energy (right) Coal (left) 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 7 6 5 4 3 2 1 0
U.S. energy dependency has been steadily decreasing U.S. fossil fuel imports Quadrillion btu 35 30 25 20 15 10 Source: U.S Energy Information Administration. Petroleum (left axis) Natural gas (right axis) Crude oil (left axis) Quadrillion btu 5 5 Coal (right axis) 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Led by wind and biomass, the U.S. projects increases in renewable energy generation Domestic non-hydro renewable energy generation Billion kilowatt hours 180 160 140 120 100 80 60 40 Geothermal 20 Waste 0 1990 1995 2000 2005 2010 2015 2020 2025 Source: U.S Energy Information Administration. Solar / PV Wind Biofuel
Hydroelectricity leads U.S. renewable production U.S. renewable energy supply, 2011 Wind 14% Geothermal 3% Other Renewables 6% Solar 1% Biodiesel 1% Hydroelectric 38% Ethanol 14% Production 8.4 quadrillion btu Source: U.S Energy Information Administration. Wood and Wood Waste 23%
Hydroelectricity leads U.S. renewable consumption U.S. renewable energy consumption, 2011 Geothermal 3% Solar 1% Biodiesel 1% Other Renewables 11% Ethanol 13% Hydroelectric 38% Consumption 8.3 quadrillion btu Source: U.S Energy Information Administration. Wind 14% Wood and Wood Waste 19%
Since 2010, China has surpassed the U.S. as the world leader in cumulative wind energy capacity Cumulative wind energy capacity by global leader, 2011 Denmark 1.7% Canada 2.2% United Kingdom 2.7% Italy 2.8% France 2.9% India 6.7% Source: National Renewable Energy Laboratory. Spain 9.1% Rest of World 13.6% Germany 12.2% China 26.3% United States 19.7%
Despite having 5 percent less wind capacity than China, the U.S. produced 42 percent more wind Wind energy production by global leader, 2010 Rest of World 14.4% Canada 2.4% Italy 2.5% France 2.9% United States 28.3% United Kingdom 3.0% India 6.1% Source: National Renewable Energy Laboratory. Germany 10.9% Spain 13.0% China 16.5%
Solar energy capacity and generation is increasing in the U.S. U.S. total installed solar energy capacity and generation Megawatts 3,000 2,500 2,000 1,500 1,000 500 0 Photovoltaics (PV) capacity (left axis) Concentrated solar power (CSP) capacity (left axis) Source: National Renewable Energy Laboratory. Solar energy generation (right axis) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Gigawatthours 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
Germany leads the world in installed solar energy capacity Global installed solar energy capacity leaders, 2010 Czech Republic 6% U.S. 8% France 3% China 2% Italy 10% Germany 49% Japan 10% Source: National Renewable Energy Laboratory. Spain 12%
California leads the U.S. in solar energy development U.S. leaders in photovoltaic (PV) development, 2010 State PV Cumulative Capacity (2010, MW) California 1,021.7 New Jersey 259.9 Colorado 121.1 Arizona 109.8 Nevada 104.7 Florida 73.5 New York 55.5 Pennsylvania 54.8 Hawaii 44.7 New Mexico 43.3 Source: National Renewable Energy Laboratory.
U.S. leads the world in clean energy investment Investments by global rank US$ billions 60 50 40 2010 2011 30 20 10 0 U.S. China Germany Italy India U.K. Japan Spain Brazil Source: Bloomberg New Energy Finance and Pew Environmental Group.
China is experiencing the highest growth in renewable energy capacity Top 10 five-year growth in capacity from 2006-2011 Rank Country Increase in renewable energy capacity 1 China 92% 2 Turkey 58% 3 Brazil 49% 4 Italy 47% 5 Argentina 46% 6 South Korea 43% 7 France 41% 8 Canada 32% 9 Australia 29% 10 United States 28% Source: Bloomberg New Energy Finance and Pew Environmental Group.
Increase in supply, shale gas production, and a mild winter have contributed to current low prices U.S. natural gas wellhead prices US$ per thousand cubic feet 9 8 7 6 5 4 3 2 1 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: U.S Energy Information Administration. Projected
Natural gas production is supplied mostly by domestic reserves U.S. natural gas sources, 2011 89% Canada and Mexico 10% 1% Trinidad Qatar Yemen Egypt Nigeria Norway Peru Source: U.S Energy Information Administration. Domestic production Import (Pipeline) Import (LNG)
Discovery of domestic natural gas reserves is reducing import volume Import vs. domestic production Trillion cubic feet 30 29 28 27 26 25 24 23 22 21 20 Source: U.S Energy Information Administration. Imports (right) Domestic (left) Trillion cubic feet 5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 4 3 2 1
Discovery of wells and low-cost extraction methods increase shale gas production U.S. domestic shale gas production Trillion cubic feet 60 Proved Reserves 45 30 Production Shale gas makes up 23 percent of current U.S. production EIA estimates that production could double or triple over the next 25 years 15 0 2007 2008 2009 Source: U.S Energy Information Administration.
Iran s oil production has decreased since announcement of July 1 sanctions Current Iran crude oil production Million barrels per day 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 5/09 10/09 3/10 8/10 1/11 6/11 11/11 4/12 Source: Bloomberg. Iran sanctions announced and projection
Saudi Arabia is prepared to increase production Iran vs. Saudi Arabia Million barrels per day 12 10 8 6 4 2 Million barrels per day 4.5 Saudi Arabia (left) 4.0 Iran (right) 0 5/09 9/09 1/10 5/10 9/10 1/11 5/11 9/11 1/12 5/12 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Source: Bloomberg. *Projections begin in 4/12.
Closure of the Strait of Hormuz will impact seaborne traffic 2011 Strait of Hormuz traffic data 17 million barrels per day in 2011 (6 percent increase from 2010) 14 crude oil tankers per day 35 percent of global seaborne trade 85 percent of exports to Asian markets Source: U.S Energy Information Administration.
Technology game changer U.S. now has the largest energy reserves in the world Total fossil fuel reserves, % of world total 17.0 16.6 8.3 5.7 5.5 5.4 4.0 3.7 3.2 2.9 2.4 2.4 2.3 2.0 1.2 0.9 0.8 0.7 0.7 0.7 Note: Fossil fuels include oil, natural gas and coal. Source: U.S. Congressional Budget Office
Technology Cost and Performance Profiles Capital Cost ($/kw) Good Poor Gas Coal Nuclear Wind Solar PV Dependability Fuel Price ($/MMBtu) Land/Visual Impact Air Pollution Cost of Electricity* ($/MWh) Source: IHS CERA, TransCanada.
North American Power Generation by Fuel Type TWh 7,000 6,000 History Forecast 5,000 4,000 3,000 2,000 1,000 Oil Natural Gas Renewables Hydro Nuclear Coal 0 2000 2005 2010 2015 2020 2025
North American Oil Pipeline Infrastructure Crude oil is transported across a vast system of pipelines It is a fact that pipelines are the safest method for transporting oil - safer than tankers, trucks or rail In the U.S. alone, there are more than 2.5 million miles of oil and gas pipelines that operate safely every day
Pipeline Safety A Decade of Improvement Number of Spills per 1,000 Miles Barrels Released per 1,000 Miles 2.5 800 2.0 2.0 600 629 1.5 1.0-63% 0.7 400-48% 330 0.5 200 0.0 2001 2002 2003 2004 2005 2006 2007 2008 0 2001 2002 2003 2004 2005 2006 2007 2008 3-Year Averages Ending in Year Shown SOURCE: Pipeline Performance Tracking System, a voluntary spill reporting system involving 85% of the U.S. liquids pipeline mileage. Percentage decline from 1999-2001 average to 2006-2008 average
The Ogallala Aquifer is Protected 174,000 square mile area covering portions of 8 states Already crossed by natural gas and petroleum pipelines, highways, railroads 21,000 miles of pipelines currently co-exist with the aquifer KXL would cross the aquifer for 250 miles Significant oil and natural gas production on top of the aquifer area, including in Nebraska Since 1950, 24 billion barrels of oil were produced through and transported over the aquifer without any serious incidents Keystone XL will use the latest satellite-linked, computerized leak detection and control systems
Canada s GHG Emissions In Context Source: CAPP, Achieving Balance, The Canadian Oil Sands Story, Insight Energy Conference, (February 2, 2010)
Greenhouse Gas Emissions From Canadian and U.S. Coalfired Power Plants and Oil Sands Operations, 2007 Source: CAPP, Canada s Oil Sands in a North American Policy Context, North American Energy Summit, May 6, 2010
Cumulative Global-Warming Impact of Oil Sands Production 16 14 12 10 Degrees Celcius Economically Accessible Reserves All Reserves 15.00 8 6 4 3.00 2 0 0.90 0.02 0.36 0.16 Oil Sands Shale Gas Coal Source: Nature Climate Change Journal
Nearly All Infrastructure Development Experiences Opposition 80% 70% 60% Oppose Support 50% 40% 30% 20% 10% 0% Nuclear Power Plant Oil Drilling Power Transmission Line Natural Gas Drilling Natural Gas Pipeline Wind Farm SOURCE: The Saint Consulting Group The Saint Index: United States, 2011
ENGO Tactics Celebrity Social Media Fear James Hansen NASA Scientist: [Keystone XL] is the fuse to the biggest carbon bomb on the planet." Jane Kleeb Director, Bold Nebraska: We are definitely playing Russian roulette with our land and water Misinformation Total potentially mineable area of Oil Sands 11
Keystone Oil Pipeline 8.6 5.4 0.1 PADD III* * millions of barrels per day Canadian Imports Total Foreign Imports Refining Capacity 3.7 1.21.4 PADD II* Source: 2010 EIA Actuals US$13.8 billion, including expansion projects 1.4 million Bbl/d ultimate capacity More than 1.1 million Bbl/d contracted for an average term of 17 years WCSB and Bakken Crude Oil MMBbl/d Supply Outlook 6.0 5.5 History Forecast 5.0 4.5 4.0 Bakken 3.5 3.0 2.5 WCSB Bitumen Blend 2.0 1.5 WCSB Upgraded Light 1.0 WCSB Conventional Heavy 0.5 WCSB Conventional Light 0.0 2005 2010 2015 2020
Typical Electrical Efficiency (HHV) Opportunities for Distributed Generation (DG) and Efficient use of Natural Gas Combined Heat & Power (CHP) offers opportunity to recover losses Examples of fuel cell CHP deployments using natural gas Bank of Omaha (800kW) Price Chopper one of several in the food industry interested Source: http://www.chpcenterse.org/pdfs/ornl_chp_report_dec_2008.pdf Range of electrical efficiencies for DG technologies Typical Electrical Efficiency 70% Examples of companies 60% 50% 40% 30% 20% 10% 0% Steam Turbine Recip. Engine Gas Turbine Micro- Turbine Source: EPA, Catalog of CHP Technologies, December 2008 Fuel Cell Sources: http://www.energy.ca.gov/distgen/equipment/equip ment.html, http://www.fuelcells.org/info/fcdev.html UTC Power announced that it will provide 12 fuel cells totaling 4.8MW of power to serve the new World Trade Center- Freedom Tower.
Spark-Spread Determines Regional Opportunities for DG from Natural Gas 2007 2012 Source: NREL Spark spread determines regions for favorable use of natural gas Red/orange regions: High electricity cost, low natural gas cost- favorable for DG Lower natural gas prices offer increased opportunities for CHP and distributed generation- current vs. 2007
Enhanced Oil Recovery with CO2 Growing CO2-EOR Production (1990 to 2009) and CO2 Pipeline Infrastructure Texas Clean Energy Project (TCEP) The plant will capture 90 percent of the carbon dioxide (CO 2 ) it produces. Of the 2.9 million tons of CO 2 to be captured annually, 83 percent will be used in the West Texas Permian Basin for enhanced oil recovery. Natural sources of CO2 are in decline, and the one huge natural dome (McElmo Dome) that does have additional supplies would require billions in pipeline cost to transport.