Financial Executives Institute Greenhouse Gas Emissions and Canadian Environmental Policy
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Financial Executives Institute Greenhouse Gas Emissions and Canadian Environmental Policy This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil P. A. Smith Imperial Oil Limited Senior Vice President Finance and Administration January 8, 2008
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Financial Executives Institute Greenhouse Gas Emissions and Canadian Environmental Policy. P. A. Smith Imperial Oil Limited Senior Vice President Finance and Administration January 8, 2008. - PowerPoint PPT Presentation
Transcript of Financial Executives Institute Greenhouse Gas Emissions and Canadian Environmental Policy
Financial Executives InstituteGreenhouse Gas Emissions and Canadian Environmental Policy
This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein
(and in Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein
(and in Item 1 of ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
P. A. SmithImperial Oil Limited
Senior Vice PresidentFinance and Administration
January 8, 2008
World is Not Short of Hydrocarbons
0
1
2
3
4
5
Conventional Oil Natural Gas Coal Oil Sands/OilShale
Source: ExxonMobil
TB
OE
• Hydrocarbon resource ~12 TBOE
• Produced 3 TBOE
Produced
Remaining
Recoverable Resources
GDPTrillion 2005$
3.0%
Global Economics and Energy
Average Growth / Yr. 2005 – 2030 1980 – 2005
2.9%
0
25
50
75
100
1980 2005 2030
Energy IntensityBOE/2005$K GDP
-1.6%-1.0%
0
1
2
3
1980 2005 2030
Energy DemandMBDOE
1.3%1.8%
0
50
100
150
200
250
300
350
1980 2005 2030
0
50
100
150
200
250
300
350
1980 2005 2030
By Fuel
MBDOE
Gas
Oil
1.2%
0.9%
Coal
Other
1.7%
1.7%
By Sector - 2030
Power Generation
Res / Comm
Transportation
Heavy Manufacturing
Chemicals
Other Industry
World Energy Demand
1.3%
Average Growth / Yr. 2005 – 2030
~ 324 MBDOE
Electricity Demand Linked to GDP1000 kW hours
per capita
0.01
0.1
1
10
100
100 1000 10000 100000
0
GDP per capita (2005$)
OECD
Non-OECD
China
0
South Korea
U.S.
1980 to 2005
0
10
20
30
40
50
60
70
1980 2005 2030
Power Generation DemandOECD
MBDOE
0.9%
Average Growth / Yr. 2005 - 2030
Gas
Coal
Nuclear
Oil
Renewables
-2.8%
-0.4%
1.5%
2.2%
1.9%
0
10
20
30
40
50
60
70
1980 2005 2030
Non-OECD
MBDOE
2.2%
0.0%
2.3%
1.8%
4.2%
3.5%
Light Duty Vehicle Penetration Linked to GDP
Vehicles per 1000 people
0.1
1
10
100
1000
100 1000 10000 100000
00
GDP per capita (2005$)
OECD
Non-OECD
China
South Korea
U.S.
1990 to 2005
0
5
10
15
20
25
30
35
1980 2005 20300
5
10
15
20
25
30
35
1980 2005 2030
Global Transportation DemandOECD
MBDOE
0.6%
1.7%
Average Growth / Yr. 2005 - 2030
Light Duty Vehicles
Heavy Duty Vehicles
-0.5%
Non-OECD
MBDOE
3.1%
2.8%
3.4%
3.6%
Other Transport
1.2%
0
10
20
30
40
50
60
70
1980 2005 2030
0
10
20
30
40
50
60
70
1980 2005 2030
Global Industrial DemandOECD
MBDOE
0.0%
0.4%
Average Growth / Yr. 2005 - 2030
Heavy Manufacturing
Chemicals
-0.4%
Non-OECD
MBDOE
1.9%
3.4%
1.9%
0.8%
0.1%Other
0
5
10
15
20
25
30
35
1980 2005 2030
0
5
10
15
20
25
30
35
1980 2005 2030
Global Residential / Commercial Demand
OECD
MBDOE
0.1%
0.4%
Average Growth / Yr. 2005 - 2030
Residential
Commercial
0.0%
Non-OECD
MBDOE
1.0%
1.8%
0.9%
0
50
100
150
200
250
300
350
1980 2005 2030
World Energy Demand – Primary Energy Supplies
Primary Energy
1.3%
0.9%
1.2%
1.7%
1.5%
Oil
Gas
Coal
Nuclear
MBDOEAverage Growth / Yr.
2005 - 2030
0
1
2
3
4
5
6
1980 2005 2030
Wind, Solar & Biofuels
8.7%
10.5%10.5%
7.6%
Wind
Biofuels
MBDOE
9.9%Solar
Renewables
2.0%
0
5
10
15
20
25
30
35
40
45
1980 2005 2030
Renewables
1.5%
2.0%2.0%
Hydro/GeoHydro/Geo
MBDOE
Wind, Solar & Biofuels
8.7%
0.7%
Biomass/Other
0
100
200
1980 2005 2030
0
100
200
1980 2005 2030
Oil
GasCoal
Other Demand by
Fuel
MBDOEMBDOE
OECD Non-OECD
0
10
20
30
1980 2005 2030
0
10
20
30
1980 2005 2030
Billion Tonnes CO2Billion Tonnes CO2
Energy Related
CO2 Emissions
World Energy & CO2 Emissions
0.5% 2.0%
Average Growth / Yr. 2005 – 2030
Oil
Gas
Coal
Other
1.9%0.1%0.1% 1.9%
Oil
Gas
Coal
Oil
GasCoal
Global CO2 EmissionsSensitivities
Billion Tonnes
0.5%
Average Growth / Yr. 2005 – 2030
• Double biofuels growth through cellulosic ethanol
• Double rate of improvement of new car efficiency
• Replace ½ of coal growth with nuclear / CCS
• Retire coal plants at 40 years and replace with nuclear / CCS
Energy Related CO2 Emissions
0
10
20
30
40
1980 2005 2030
Greenhouse Gas Policy – Implications for Canada
• Any meaningful action must be a global action
• A risk based approach is required given potential costs and uncertainty
• Meaningful change requires breakthrough technology
• Policy should ensure any cost of carbon is uniform across the economy and predictable
Alberta’s Enacted GHG Legislation
• A challenging GHG regime on industry by world standards
• Immediate 12 % reduction in emissions intensity from 2003-05 levels is not likely for many to achieve physically
• However, use of intensity targets is the right approach – allows economic growth
• The Alberta technology fund, with contributions fixed at $15 a tonne provides cost certainty AND support to technology development – the only realistic long term solution
Canadian Federal proposed GHG regulation
• Even more stringent than Alberta’s:
• 18% intensity reduction required in 4 years and 2% each subsequent year
• Restricted technology fund that phases out quickly
• Intensity based targets, like Alberta’s, remain the right approach
• Restricted technology fund provides no “safety valve” on the price of CO2 credits or needed market liquidity; open-ended access for industry to provincial funds needed for effective compliance
A more effective approach to climate change risk
• What would an effective climate change policy do?
• Long term objective: reduce risks of serious impacts at reasonable costs to society
• Near term:
• Promote energy efficiency
• Promote deployment of existing low-GHG technologies
• Support R&D of new low-GHG technologies
• What are we doing in Imperial?
• Energy efficiency: 16% improvement in refinery energy efficiency since 1994; associated gas flaring reduced 42% since 2002
• Technology development:
• Helping support Stanford University $250 M GCEP Program
• $10 M to U of Alberta Imperial Oil Centre for oil sands Innovation
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