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Transcript of AGI Leadership Forum
Scott W. Tinker, BEG, 2002
AGI Leadership Forum
Scott W. TinkerBureau of Economic Geology
Scott W. Tinker, BEG, 2002
Humanity’s Top Ten Problemsfor next 50 years
1. ENERGY2. WATER3. FOOD4. ENVIRONMENT 5. POVERTY6. TERRORISM & WAR7. DISEASE8. EDUCATION9. DEMOCRACY10. POPULATION
2003 6.3 Billion People2050 8-10 Billion PeopleRichard Smalley, 2003
Scott W. Tinker, BEG, 2002
U.S. Data: Annual Energy Review 1999 (EIA, 2000)
U. S. Energy Consumption
U.S. Energy Consumption
0
20
40
60
80
100
120
1845
1870
1895
1920
1945
1953
1958
1963
1968
1973
1978
1983
1988
1993
1998
Qua
d B
TU
Renewable Energy
Hydroelectric
Nuclear Energy
Natural Gas
Oil Imported
Oil Produced
Coal
Wood and Waste
Scott W. Tinker, BEG, 2002
QAc9841c
after Hefner, 1993
100
80
60
40
20
0
Per
cen
tag
e o
f to
tal
mar
ket
Year
1850 1900 1950 2000
World Energy Consumption
Solids
GasesLiquids
U.S. ConsumptionGases (Natural Gas, Hydrogen, Nuclear, Renewables)
Solids (Wood, Coal)
Liquids (Oil)
Scott W. Tinker, BEG, 2002
U.S. Data: Annual Energy Review 1999 (EIA, 2000)World Data: International Energy Annual 1999 (EIA, 2000)
20
30
40
50
1980 1985 1990 1995
En
erg
y co
nsu
mp
tio
n (
per
cen
t)
Year
Energy Demand
World oil
World coal
World gas, nuclear,hydro, renewables
Scott W. Tinker, BEG, 2002
EIA (1949-1990) and NPC (1991-2015)
L48 Conventional Onshore
Associated and High-Perm Gas
Shallow Offshore
L48 Unconventional Onshore Tight Gas, Shale Gas, CBMDeepwater+Subsalt Offshore
0
5,000
10,000
15,000
20,000
25,000
30,000
1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013
Year
An
nu
al N
atu
ral G
as P
rod
uct
ion
(B
cf)
$2
$3
$1 Wel
lhea
d P
rice
($/
mcf
)
U.S. Natural Gas Production
QAd1023
Scott W. Tinker, BEG, 2002
Data: Natural Gas (NPC, 1999)
Recoverable Portion of In-Place Gas Resource (Tcf)
Reserve GrowthINCREASING
Development costsTechnology needs
Uncertainty
DECREASING Concentration
Cumulative Production
ReservesKnown Reserves
Supply & Technology
Undiscovered, Unconventional Reserves
Unassessed Unconventional Reserves
Geopressured Brine
Gas HydratesNot Assessed by NPC
Reserve Growth
New Fields
Historical U.S. Composition of Total Natural Gas Discoveries (1977-2001)
0
5,000
10,000
15,000
20,000
25,000
1977 1980 1983 1986 1989 1992 1995 1998 2001
U.S
. D
ry N
atu
ral G
as
To
tal D
isco
ve
rie
s (
Bc
f)
Data: EIA (2002)
Scott W. Tinker, BEG, 2002
Proposed 2004 DOE Budget
Total DOE Budget:$23,375 million
Source: DOE, FY 2002 Budget Request
%3 Directed at U.S. Major Energy
Coal40%
Natural Gas3%Oil
2%
Renewable Energy33%
Nuclear16%
U.S. Energy Research Budget $801 Million (3%)
Scott W. Tinker, BEG, 2002
Short Term: Support Independents
Long Term: Support Gas EconomyAdvanced RecoveryUnconventional Natural GasCO2 SequestrationData Preservation
QAd1023
DOE Sponsored Research
What Should be the Focus?
Scott W. Tinker, BEG, 2002
Support efforts to advance DOE O&G
What you will hear- “Corporate Welfare” Three myths:
Wealthy industry does not need federal support
It is a poor federal investmentBeing done by the private sector
QAd1023
What can be done?
Scott W. Tinker, BEG, 2002
Myth 1: Wealthy Oil Industry
~10 percent ROI*
*Source:Energy Information
Administration, FRS
25
20
15
10
5
0
197
3
197
5
197
7
197
9
198
1
198
3
198
5
198
7
198
9
199
1
199
3
199
5
199
7
199
9
Sources:FRS companies: Energy Information Administration, Form EIA-28 (Financial Reporting System).S&P Industrials: Compustat PC Plus, a service of Standard and Poor’s.
QAc8982c
Per
cen
t
Layoffs
Layoffs
Layoffs
FRS companies
S&P Industrials
Amerada HessAmocoAnadarkoAshlandARCOBP AmericaBurlington ResourcesChevronCoastalDuPont (Conoco)EnronExxon
FinaKerr-McGeeMobilOccidentalOryxPhillips PetroleumShell OilSunTexacoUnion Pacific Res.UnocalUSX (Marathon)
Scott W. Tinker, BEG, 2002
Myth 2: Being Done by the Private Sector
QAc8962c
NJ
Ma
Washington
Oregon
Nevada
California
Idaho
Montana
Wyoming
Utah
Arizona
Colorado
New Mexico
Texas
Oklahoma
Kansas
Nebraska
South Dakota
North Dakota
Illinois
Louisiana
Arkansas
Missouri
Flor
Maine
Mich
Minnesota
Iowa
Miss AlaGeorgia
Tennessee
Kentucky
S Carol
N Carolina
VirginiaWV
Wisc
IndOhio
Pennsyl
New York
VtNH
CtRI
DelawareMd
Hawaii
Alaska Exxon Prod. Res.
ARCO
Marathon
Amoco
Mobil
Chevron
Conoco
TexacoShell
Phillips
ARCO
Marathon
Amoco
Mobil
Chevron
Conoco
Texaco
Phillips
Scott W. Tinker, BEG, 2002
21992 1994 1996 1998
3
4
5
Pri
vat
e S
ecto
rB
illi
on
$
Year
2000 2002 2004
Myth 2: Being Done PrivatelyOil and Gas R&D Funding
Private Sector Data: Chris Ross, World Energy (2001, v. 4, no. 2)
1998 $
Note Scale Difference
DO
E O
&G
Mil
lio
n $
20
40
60
80
100
120
Fuel Cells and Gas Turbines removed
from 1996-1999 for comparison
Scott W. Tinker, BEG, 2002 Arthur L. Smith, CFA - Abilene, Texas, 1996Arthur L. Smith, CFA - Abilene, Texas, 1996
19741974 19791979 19841984 19891989 19941994 20002000 20052005
200,000200,000
400,000400,000
600,000600,000
800,000800,000
1,000,0001,000,000
1,200,0001,200,000
1,400,0001,400,000
1,600,0001,600,000
Total Total Number of Number of Petroleum Petroleum
Industry Industry EmployeesEmployees
(FRS Companies)(FRS Companies)
Global Global Energy Energy Demand will Demand will Counter Counter TrendTrend
Myth 2: Being Done Privately
Oil Company Employment
AAPG WebsiteAAPG Website
Scott W. Tinker, BEG, 2002
7676
140140
255255
191191
9090
4848
151533
2323
00
5050
100100
150150
200200
250250
300300
>25>25 26-2926-29 30-3430-34 35-3935-39 40-4440-44 45-4945-49 50-5450-54 55-5955-59 60+60+
Age (yrs)Age (yrs)
Myth 2: Being Done Privately
1998 Demographics For a Typical Major
Age Brackets for Geoscientists Worldwide
Insuffic
ient Replace
ment
Insuffic
ient Replace
ment Increasing Retirement
Increasing Retirement
1975-83 Boom Hiring1975-83 Boom Hiring
Source: AAPG Website
Scott W. Tinker, BEG, 2002
*with normal attrition and no replenishment
Gone Gone FishingFishing
323
76
140
255
191
153
0
50
100
150
200
250
300
>25 26-29 30-34 35-39 40-44 45-49 50-54 55-59 60+Age (YRS)
Age Brackets for Geoscientists Worldwide (2008*)
Myth 2: Being Done Privately
2008 Demographics For a Typical Major
Scott W. Tinker, BEG, 2002
QAd1731c
Source: AGI
10,000
20,000
Myth 2: Being Done Privately
U.S. UNIVERSITY ENROLLMENTS
Geoscience Graduate Students
Petroleum Engineering
Scott W. Tinker, BEG, 2002
22,621
2410
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Private
Federal
Myth 3: Poor Federal Investment
* Private sector = 17.7 Tcf * $1.42 average price/Mcf from 1970-1996*90% (1-average FRS ROI from 1970-1996)** Economic Value = 17.7 Tcf * $1.42 average price/Mcf from 1970-1996*Economic Value Multiplier of 2.48 (BEA, 1992)
$241 Federal$23 Billion Private*
$62 Billion (257x) Economic Value**$2.5 Billion (10%) Private ROI
2,513
62,332
17.7 Tcf Incremental Unconventional Gas through 1996Federal Investment ~ 1% of PrivateFederal Return on Investment ~ 257x Private
Scott W. Tinker, BEG, 2002
Time
O&G R&D FundingUniversity
Enrollments O&G Employment
Demand, esp. Natural Gas
Technology Requirements
The Challenge
Today
Scott W. Tinker, BEG, 2002
Write/Visit Your Congressman
Write the Vice President and OMBMust hear from the major oil companies
Emphasize: Technical Business: Need Energy ResearchIndependents: U.S. EOR and EGRThe U.S. Transition to Natural GasGas Economy: Research and TechnologyDemographics: Students and IndustryA Changed World: New Private/Federal
Model QAd1023
AGI Leadership