Human creativity and the shale revolution - Cameron … · Human creativity and the shale...
Transcript of Human creativity and the shale revolution - Cameron … · Human creativity and the shale...
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Human creativity and
the shale revolution: Will hydrocarbons continue to play a
role in Oklahoma’s future?
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Outline Subjects covered in this brief
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Price spikes
and the call
for diversity
Technology
and
innovation
U.S. energy
policy that
allows
creativity
Unstoppable
global
demand So what for
Oklahoma
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Global projection of renewables Clearly on the rise (Graph does not include hydroelectric power)
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92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Renewables share of power generation by region
World Asia Pacific Africa Middle East Europe & Eurasia S. & Cent. America North America
Source: BP Statistical Review of World Energy, June 2013, pg 37
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Past decade gas prices
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Ancient Chinese saying (Not really)
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“ A billion Chinese are not going to continue to ride bikes, so that Americans can have 2 dollar gas!” - Confucius
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Gas prices
• Response to price spikes of
‘05-’09
– Calls for increase price
controls
– Conservation mandates
– “Drill baby drill”
– Diversify into
alternatives and
renewables
• Importance of U.S. energy
policy
Spring of 2008
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Crude oil imports/exports
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Global petroleum market
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Enter creativity
• Man’s ingenuity sought a solution to the global energy
constraints.
• Man began looking for energy in other places, and to harness the
energy all around, such as solar and wind.
• Man also turned back to oil and gas contained in very tight rock
and started what is now known as the shale revolution.
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U.S. energy policy
“The fracking revolution required more than just favorable geology; it also
took financiers with a tolerance for risk, a property-rights regime that let
landowners claim underground resources, a network of service providers
and delivery infrastructure, and an industry structure characterized by
thousands of entrepreneurs rather than a single national oil company.
Although many countries possess the right rock, none, with the exception
of Canada, boasts an industrial environment as favorable as that of the
United States.”
- Robert D. Blackwell and Meghan L. O’Sullivan “America’s Energy Edge: The Geopolitical Consequences of the Shale Revolution,” (Foreign Affairs,
March/April, 2014) Council on Foreign Relations, Foreign Affairs online.
How America is different
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U.S. energy policy Continued
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Hydraulic fracturing a brief history
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• Hydraulic fracturing is a
well-established
technology with a strong
environmental and safety
record
• The technology has been
used to complete more
than 1 million wells over
the past 60 years
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Technology’s role: Why the revolution
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Traps vs. shale's
Migrating hydrocarbons
Impermeable
sealing layer Shale
Frack Porous and permeable
reservoir layer
Hydrocarbon Trap
organic rich
source layer
Fracture stimulation 5,000’ – 15,000’ below the surface
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Hydraulic fracturing How it’s done
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Shale revolution timeline The accumulation of creativity and tenacity
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1976 – First 3D seismic survey
done by Western & GSI
1984 – Sun-Oil horizontal
drilling
1995 – Continental drills very productive horizontal wells in N.
Dakota
1997 – Mitchell
Energy drills 3 wells in
Barnett Shale using “slick
water” fracture
2001 – Devon Energy buys
Mitchell Energy
2003 – Devon announces
combination of slick-water
frack and horizontal drilling at
AAPG symposium
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U.S. shale plays
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World shale plays
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Fuel to electricity generation
In quadrillion BTU’s
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Source: ExxonMobil Energy Outlook, June 2013, pg 29
A projection to 2040
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World electricity demand A projection to 2040 In thousands of terawatt hours
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Source: ExxonMobil Energy Outlook, June 2013, pg 28
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World energy demand A projection to 2040 In quadrillion BTU’s
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0
20
40
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2000 2025 2040
OECD World energy demand projection
North America Europe Other OECD
0
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40
60
80
100
120
140
2000 2025 2040
Non OECD World energy demand projection
China India Russia/Caspian Middle East Africa Latin America
Source: ExxonMobil Energy Outlook, June 2013, pg 49
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Total hydrocarbon reserves Oil, coal, gas In Bboe
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-
200
400
600
800
1,000
1,200
Unit
ed S
tate
s
Russ
ia
Chin
a
Aust
ralia
Iran
Venuzu
ela
Saudi Ara
bia
Kaza
khst
an
Canada
South
Afr
ica
Qata
r
Iraq
Unit
ed A
rab E
mir
ate
s
Turk
menis
tan
Kuw
ait
Nig
eri
a
Alg
eri
a
Bra
zil
Mexic
o
Angola
Total reserves of hydrocarbons by country
Oil Coal Nat Gas
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Top 10 U.S. states 2012 Natural gas production
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0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
TX LA PA OK WY CO NM AR WV UT
Natural Gas Marketed Production, million cu ft
Source: EIA.gov http://www.eia.gov/state/rankings/?sid=US#/series/47
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U.S. energy policy
• Nations must have diversification of supply
• Policymakers recognize there is one (global) oil market
• Maintain a security margin and global spare capacity
• Government intervention and controls are not productive
• Build cooperative relations with export nations
• Build cooperative relations with import nations
• Maintain a proactive security framework
• Provide good quality information
• Maintain a technology-driven energy industry
• Commit to research, development and innovation across a broad spectrum of energy options
Source: Yergin, “Energy Security and Markets,” in Energy and Security: Toward a New Foreign Policy Strategy, eds. Jan H Kalicki and David L. Goldwyn (WDaniel ashington, DC: Woodrow Wilson Center Press, 2005), 55-57.
Yergin’s timeless 10 principles
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Thank You