PowerPoint Presentation

5 Megatrends in Energy

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Photo credit: Flickr user Eli ChristmanPhoto credits: https://www.flickr.com/photos/oregondot/3049032681/in/photolist-c1j6hQ-34zvy-5Dr6bZ-6zvyH8-bA52Vt-5Dr6fa-qBQyz-6Pddmj-6FaS5i-8Gtj7M-9zCVfq-4oeXW-6oaJFE-5FVjvc-9zzVTT-de3swR-9zCVjC-9zCVjs-ec14PZ-9zzVUc and https://www.flickr.com/photos/40132991@N07/7501108978/in/photolist-cqR9n9-fFyd5o-fFycCd-fFycfS-fFybNU-fFybmb-fFgyAH-fFgx2B-fFgwFH-fFgwkx-fFgvS8-fFy7Vd-fFgvdr-fFguSX-fFy6QS-fFy4hW-fFgrrn-fFy3rm-fFy2bs-fFgniD-fFgmUx-fFgmtH-fFxWWj-fFgka6-fFxVDW-fFxVcA-fFgiuD-fFxUi3-fFxU2q-fFghhe-fFgeKk-fFgF7e-fFgEBF-fFygEW-fFydTC-fFy6nU-fFgm3R-fFy9FG-fFxW5L-fFxZ9L-fFg8cV-fFxLCC-fFgpjT-7Fr2Cp-d46ocA-d46rW3-d46ekU-d46rC1-d46rpJ-d46r2L and https://www.flickr.com/photos/johnas/8010613659/in/photolist-dcSumB-dcSwyd-dcSvSw-dcSwEm-dcSwNL-dcSuSt-4sqaCg-4tuFiB-6oT5PG-665BnE-ouiy2L-4ttz1h-878fSD-9EviaL-8hAFzr-dcSwqm-huXQL7-5uDZpA-6Q2jft-7h45Bv-jzS8fW-jzQrto-8iGGsY-3dicTS-6sKxLh-dcSvR9-dcSwLh-dcSuyr-7h45hD-z3itb-4trZos-5qdmHJ-89AnPC-iynaLM-4ts4if-789agW-cZLpjA-7fUGQq-7tBuXp-dcSwGm-6N1vWR-8z94BF-6PnHVi-ou9mUe-9EANfX-ju5xmF-7iNoPp-2AXhvs-d6kmsL-fZ3xcK and https://www.flickr.com/photos/nicholas_t/7770508920/in/photolist-cQDTzJ-5YHV2z-dzfcpn-6PefMe-7f5Hgv-dz4FZq-6K2hov-dyYdw8-c3anv5-akEYeW-c3aHzj-c3aiLq-c3agSW-c3b5Yo-c3aSp3-owxhSa-q8QXtk-9H9dJs-afM1XM-akEXSQ-akEYku-akEYBj-akEYwj-akC9Pr-akC9Zn-akEYad-akCa6k-akCatz-bpDR1W-ayo2xx-9H6k8P-bmzShM-pRqdFT-afNByi-9H6k5X-9H9dD9-aCMwML-h6vGfu-9t2XpR-8UcDK2-8UcK3k-aCMuQG-8UfPSG-afRnrj-afRob5-aCJR1T and https://www.flickr.com/photos/gammaman/9163256954/in/photolist-eXJ63S-4Xz2Fh-6aH2zm-53TdBC-pV6mFB-pfxvkh-hRVLC-dKsMVR-r4KZm5-46uZse-bVjdcF-aFbetE-pfLWhp-pV7Ei6-qctpZJ-qcwJvZ-4D5Nop-9RDMRo-9RUUFf-7Aodnc1The sun isnt setting on energy

Over the past year, demand growth for oil has weakened, sending its price down 50%. However, overall energy demand in the future is still expected to be robust, with low oil prices today potentially creating new oil demand in the years ahead. Oil, however, is just one of the megatrends in energy that are expected to play out over the next few decades. Photo credit: Flickr user Jonathan C. WheelerPhoto credit: https://www.flickr.com/photos/jonathanw100/3872259432/in/photolist-8b98w-6UbkPE-8b92p2No. 1: The oil megatrendDriven by diesel consumption in emerging markets

Source: Exxon Mobil Corporationhttp://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2015/2015-Energy-Outlook-Presentation.pdf3No. 1: The oil megatrendThe world currently uses 90 million barrels of oil per day By 2035, demand is expected to swell to over 100 million barrels per dayThis growth will be largely driven by demand for diesel in places like China, Mexico, and TurkeyTo meet this demand, global energy companies will need to invest $12 trillion by 2035Despite the headwinds from fuel efficiency, demand for oil is expected to grow 0.8% per yearhttp://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2015/2015-Energy-Outlook-Presentation.pdf and http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjc0NTcxfENoaWxkSUQ9LTF8VHlwZT0z&t=1 4No. 1: The oil megatrendBig oil: ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX)U.S. Independents: ConocoPhillips (NYSE: COP), Devon Energy (NYSE: DVN), and EOG Resources (NYSE: EOG)Service providers: National Oilwell Varco (NYSE: NOV), Schlumberger (NYSE: SLB), and Halliburton (NYSE: HAL)Investment ideas:5No. 2: The fuel efficiency megatrendGrowth for oil would be even higher if it wasnt for fuel efficiency trends in developed nationsSource: Exxon Mobil Corporation

http://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2015/2015-Energy-Outlook-Presentation.pdf6No. 2: The fuel efficiency megatrendIn the U.S., CAFE standards are gradually increasing to a goal of 54.5 miles per gallon by 2025The rise of hybrid technology and EVs are also helping to reduce gasoline demand in the developed worldA combination of high oil prices, environmental concerns, and energy security is leading to more efficient use of energy in developed countries http://www.usnews.com/news/articles/2012/08/29/545-miles-per-gallon-for-all-cars-by-2025-not-exactly7No. 2: The fuel efficiency megatrendEnergy efficient automakers: Ford (NYSE: F) and General Motors (NYSE: GM)Electric vehicles: Tesla (NASDAQ: TSLA)Investment ideas:8No. 3: The natural gas megatrendShale gas for the U.S. is a game-changer. Cheap natural gas is creating new demand and new marketsSource: Kinder Morgan Inc.

http://ir.kindermorgan.com/sites/kindermorgan.investorhq.businesswire.com/files/event/additional/0305_fixed_income_investor_pres.pdf9No. 3: The natural gas megatrendNatural gas production in the U.S. is expected to grow by more than 40% over the next decadeThis will not only fuel growing demand in the power and industrial segments, but it will also open the door for exportsHydraulic fracturing and horizontal drilling unlocked a more than 100-year supply of natural gas in the U.S.http://ir.kindermorgan.com/sites/kindermorgan.investorhq.businesswire.com/files/event/additional/0305_fixed_income_investor_pres.pdf10No. 3: The natural gas megatrendDomestic pure-play natural gas producers: Chesapeake Energy (NYSE: CHK) and Southwestern Energy (NYSE: SWN) Pipelines companies: Kinder Morgan (NYSE: KMI), Williams Partners (NYSE: WPZ), and Energy Transfer Partners (NYSE: ETP)Investment ideas:11No. 4: The LNG megatrendThe shale gas boom in the U.S. along with growing demand for gas in Asia and Europe are expected to fuel a booming LNG marketSource: Cheniere Energy

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTc1NDc5fENoaWxkSUQ9Mjc5MDQ5fFR5cGU9MQ==&t=112No. 4: The LNG megatrendOver the next decade, demand for LNG is expected to grow 5.7% per yearThis is as worldwide natural gas demand is expected to grow by 1.6% per year, which is well above the average growth rate for energy demand of 1%This growth will be supplied by surging shale gas production in North America along with growing offshore gas output from recent discoveries in Australia, Africa, and the Middle EastEnergy security concerns in Europe along with environmental worries in Asia Pacific will lead to strong LNG demand over the next decadehttp://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2015/2015-Energy-Outlook-Presentation.pdf and http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTc1NDc5fENoaWxkSUQ9Mjc5MDQ5fFR5cGU9MQ==&t=113No. 4: The LNG megatrendPure-play U.S. LNG exporters: Cheniere Energy (NYSEMKT: LNG) Global LNG leaders: Chevron (NYSE: CVX), Exxon Mobil (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS-A)Investment ideas:14No. 5: The renewables megatrendRenewable energy is expected to take share in the electric generation market in the years ahead Source: EIA

http://www.eia.gov/forecasts/AEO/section_elecgeneration.cfm15No. 5: The renewables megatrendThe U.S. Energy Information Administrations expects renewable powers share of U.S. electricity generation to grow from 13% in 2013 to 18% by 2040Globally solar, wind, and biofuel demand is expected to grow by 5.8% per year, well outpacing overall energy demand growth of 1% per yearEnergy security concerns along with a focus to become less carbon-intense is expected to lead to strong growth in renewable power generationhttp://www.eia.gov/forecasts/AEO/section_elecgeneration.cfm16No. 5: The renewables megatrendSolar companies: SunPower (NASDAQ: SPWR) and Solar City (NASDAQ: SCTY)Utilities: NextEra Energy (NYSE: NEE) Yieldcos: Brookfield Renewable Power (NYSE: BREP) and NRG Yield (NYSE: NYLD)Investment ideas:17The sun isnt setting on energy

While demand might ebb and flow, the overall trend in energy is that demand is going higher. Thats creating five distinct megatrends that could generate a lot of profits for investors in the decades ahead.Photo credit: Flickr user Jonathan C. WheelerPhoto credit: https://www.flickr.com/photos/jonathanw100/3872259432/in/photolist-8b98w-6UbkPE-8b92p18

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