Global Oil and Gas StudyNPC
1
Facing The Hard Truths About EnergyFacing The Hard Truths About Energy
A Comprehensive View To 2030A Comprehensive View To 2030Of Global Oil And Natural GasOf Global Oil And Natural Gas
IPAA IPAA
Rod NelsonRod Nelson
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Global Oil and Gas Study
NPC
Today’s DiscussionToday’s Discussion
● Study Approach Study Approach
● What We Learned : The Hard TruthsWhat We Learned : The Hard Truths
● Recommended Strategies For The U.S. Recommended Strategies For The U.S.
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Global Oil and Gas Study
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● What does the future hold for global oil and natural What does the future hold for global oil and natural gas supply ?gas supply ?
● Can incremental oil and gas supplies be brought Can incremental oil and gas supplies be brought on-line, on time, and at a reasonable price to meet on-line, on time, and at a reasonable price to meet future demand without jeopardizing economic future demand without jeopardizing economic growth ?growth ?
● What oil and gas supply and / or demand-side What oil and gas supply and / or demand-side strategies does the Council recommend the U.S. strategies does the Council recommend the U.S. pursue to ensure greater economic stability and pursue to ensure greater economic stability and prosperity ?prosperity ?
The Secretary’s Suggested Questions The Secretary’s Suggested Questions
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Global Oil and Gas Study
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Dimensions of the StudyDimensions of the Study
AlternativeEnergies
Technology
Supply
EnvironmentEnergySecurity
Demand
Economics
Findings and
Strategies
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Global Oil and Gas Study
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How This Study Is Different How This Study Is Different
Integrated, In-Depth Analysis
Diversity of Expertise
TechnologyAssessment
• Over 100 studies incorporated to include both Over 100 studies incorporated to include both public and aggregated proprietary outlookspublic and aggregated proprietary outlooks
• Not another forecast of supply, demand or priceNot another forecast of supply, demand or price
• 350 participants with backgrounds 350 participants with backgrounds in all aspects of energy including efficiency,in all aspects of energy including efficiency, economics, geopolitics, environment economics, geopolitics, environment
• Identified achievable opportunities and Identified achievable opportunities and likely deployment timinglikely deployment timing
• Looked across the energy spectrum, includingLooked across the energy spectrum, including both supply and demandboth supply and demand
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Global Oil and Gas Study
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Technology Assessment Depth Technology Assessment Depth
• Technology DevelopmentTechnology Development
• Personnel Issues: The Big Crew ChangePersonnel Issues: The Big Crew Change
• Carbon ManagementCarbon Management
• Conventional Resources (includes EOR and Arctic)Conventional Resources (includes EOR and Arctic)
• Exploration TechnologyExploration Technology
• Deepwater TechnologyDeepwater Technology
• Unconventional Gas (including Coal and Shale gas)Unconventional Gas (including Coal and Shale gas)
• Heavy Oil and BitumenHeavy Oil and Bitumen
• Oil ShaleOil Shale
• Gas HydratesGas Hydrates
• Coal to Liquids and GasCoal to Liquids and Gas
• Biomass fuelsBiomass fuels
• Nuclear Outlook and impact on Oil and Gas demandNuclear Outlook and impact on Oil and Gas demand
• Transportation EfficiencyTransportation Efficiency
• Other Renewables Other Renewables
Time horizonsTime horizons Research budgets Research budgets Human resourcesHuman resources Deployment Deployment
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Global Oil and Gas Study
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Technology Pipeline is Robust Technology Pipeline is Robust
• Industry spends $6B+ on Oil and Gas related R&D Industry spends $6B+ on Oil and Gas related R&D
• Achieved many dramatic technology advances Achieved many dramatic technology advances
• Much more to come from “Technology Pipeline”Much more to come from “Technology Pipeline”
– Improved exploration toolsImproved exploration tools
– Increased recovery methodsIncreased recovery methods
• Alternative energy R&D investment increased to $3BAlternative energy R&D investment increased to $3B
DRAFTDo Not Cite or Quote
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Global Oil and Gas Study
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There Is No Single Easy SolutionThere Is No Single Easy Solution
• Technology “Concept-to-widespread-adoption” Technology “Concept-to-widespread-adoption”
is ~16 yearsis ~16 years
• When Government enables development, When Government enables development,
technology follows technology follows
• DOE oil and gas related technology spend decreasingDOE oil and gas related technology spend decreasing
• Impacting U.S. lower 48 and universitiesImpacting U.S. lower 48 and universities
DRAFTDo Not Cite or Quote
Global Oil and Gas StudyNPC
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What We Learned: What We Learned:
The Hard TruthsThe Hard Truths
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Global Oil and Gas Study
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The Hard Truth: Demand
Coal, oil, and natural gas will remain indispensable Coal, oil, and natural gas will remain indispensable
to meeting total projected energy demand growth.to meeting total projected energy demand growth.
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Global Oil and Gas Study
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Coal, Oil, and Natural Gas Will Remain IndispensableCoal, Oil, and Natural Gas Will Remain Indispensable
Source: IEA REFERENCE CASE
1980 2004 2030
288 QUADRILLION BTU 445 QUADRILLION BTU
BIOMASSNUCLEAR
WIND / SOLAR / GEOTHERMAL
678 QUADRILLION BTU
HYDRO
OIL
NATURAL GAS
COAL
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Global Oil and Gas Study
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The Hard Truth: Supply
The world is not running out of energy resources, but The world is not running out of energy resources, but
there are accumulating risks to continuing expansion of oil there are accumulating risks to continuing expansion of oil
and natural gas production from the conventional sources and natural gas production from the conventional sources
relied upon historically. These risks create significant relied upon historically. These risks create significant
challenges to meeting projected total energy demand.challenges to meeting projected total energy demand.
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Global Oil and Gas Study
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0
1
2
3
4
5
1984 1987 1991 1994 2000
TR
ILLI
ON
BA
RR
ELS
- O
IL
Source: USGS
6UNCONVENTIONAL
CONVENTIONAL
ULTIMATE RECOVERABLE RESOURCE (MEAN)ULTIMATE RECOVERABLE RESOURCE (MEAN)
Large Oil Resource Base Large Oil Resource Base
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Global Oil and Gas Study
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Risks Reflected in Range of Production Projections Risks Reflected in Range of Production Projections
* Source: NPC Data Warehouse.
0
20
40
60
80
100
120
140
2000 2010 2020 2030
Association for Study of Peak Oil (ASPO)
MIL
LIO
N B
AR
RE
LS
PE
R D
AY
– O
IL
MIL
LIO
N B
AR
RE
LS
PE
R D
AY
– O
IL
IOC – averageIOC – average
EIA Ref Case
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Global Oil and Gas Study
NPC
The Hard Truth: Energy Sources
To mitigate these risks, expansion of all economic energy To mitigate these risks, expansion of all economic energy
sources will be required, including coal, nuclear, biomass, sources will be required, including coal, nuclear, biomass,
other renewables, and unconventional oil and natural gas. other renewables, and unconventional oil and natural gas.
Each of these sources faces significant challenges Each of these sources faces significant challenges
including safety, environmental, political, or economic including safety, environmental, political, or economic
hurdles, and imposes infrastructure requirements for hurdles, and imposes infrastructure requirements for
development and delivery.development and delivery.
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Global Oil and Gas Study
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Massive Infrastructure Investments RequiredMassive Infrastructure Investments Required
Supply Demand
REFININGOTHERMFG.
BL
EN
DIN
G
CTL
COAL
GAS
COAL
CONV.OIL
DISTRIBUTION
STORAGE
GASPROCESSING
REGAS
GTL
LNG
RENEWABLES
MFG
BIOMASS
UPGRADINGUNCONV.OIL
NUCLEARNUCLEAR POWERGEN.
NATURAL GAS
LIQUID FUEL
●
REFININGOTHERMFG.
BL
EN
DIN
G
CTL
COAL
GAS
COAL
CONV.OIL
DISTRIBUTION
STORAGE
GASPROCESSING
REGAS
GTL
LNG
RENEWABLES
MFG
BIOMASS
UPGRADINGUNCONV.OIL
NUCLEARNUCLEAR POWERGEN.
NATURAL GAS
LIQUID FUEL
●
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Global Oil and Gas Study
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The Hard Truth: Energy Security"Energy Independence" should not be confused with "Energy Independence" should not be confused with
strengthening energy security. The concept of energy strengthening energy security. The concept of energy
independence is not realistic in the foreseeable future, independence is not realistic in the foreseeable future,
whereas U.S. energy security can be enhanced by whereas U.S. energy security can be enhanced by
moderating demand, expanding and diversifying domestic moderating demand, expanding and diversifying domestic
energy supplies, and strengthening global energy trade energy supplies, and strengthening global energy trade
and investment. There can be no U.S. energy security and investment. There can be no U.S. energy security
without global energy security. without global energy security.
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Global Oil and Gas Study
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Global Oil Trade Global Oil Trade
2000 2030
EXPANDING FLOW TRENDS
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Global Oil and Gas Study
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U.S. Historical Supply and Demand TrendsU.S. Historical Supply and Demand Trends
0
15
30
1973 1980 1985 1990 1995 2000 2005
U.S. FUELS DEMAND
U.S. FUEL SUPPLIES MIL
IION
BA
RR
LES
PE
R D
AY
GLOBAL TRADE (NET IMPORTS)
Source: EIA Reference Case / NPC Global Oil and Gas study survey.
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Global Oil and Gas Study
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The Hard Truth: Workforce
A majority of the U.S. energy sector workforce, including A majority of the U.S. energy sector workforce, including
skilled scientists and engineers, is eligible to retire within skilled scientists and engineers, is eligible to retire within
the next decade. The workforce must be replenished the next decade. The workforce must be replenished
and trained. and trained.
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Global Oil and Gas Study
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U.S. Human Resources ChallengeU.S. Human Resources Challenge%
OF
U.S
. W
OR
KF
OR
CE
AGE DISTRIBUTION
Source: U.S. Dept of Labor.
0
5
10
15
20
25
20 25 30 35 40 45 50 55 60 65 70
OVER HALF OF THE WORKFORCE ELIGIBLE TO RETIRE IN NEXT 10 YEARS
AGE
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Global Oil and Gas Study
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The Hard Truth: Carbon Emissions
Policies aimed at curbing carbon dioxide emissions will Policies aimed at curbing carbon dioxide emissions will
alter the energy mix, increase energy-related costs, and alter the energy mix, increase energy-related costs, and
require reductions in demand growth.require reductions in demand growth.
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Global Oil and Gas Study
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Growing concern that climate is warming and CO2
concentrations in the atmosphere play a role.
The challenge of significantly reducing CO2 emissions is unprecedented and will require:
• Global, broad actions on multiple fronts
• Long time horizons
• Major additional investments
CO2 Emission Limits Will Alter Energy Strategies
Global Oil and Gas StudyNPC
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Five Core U.S. Strategies Five Core U.S. Strategies
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Global Oil and Gas Study
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The Five Core U.S. StrategiesThe Five Core U.S. Strategies
• Moderate Demand By Increasing Energy Efficiency Moderate Demand By Increasing Energy Efficiency
• Expand And Diversify U.S. Energy SupplyExpand And Diversify U.S. Energy Supply
• Strengthen Global And U.S. Energy SecurityStrengthen Global And U.S. Energy Security
• Reinforce Capabilities To Meet New Challenges Reinforce Capabilities To Meet New Challenges
• Address Carbon Constraints Address Carbon Constraints
There Is No Single, Easy Solution
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Global Oil and Gas Study
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There Is No Single, Easy Solution
• All Five Strategies Must Be Addressed TogetherAll Five Strategies Must Be Addressed Together
• Global Cooperation Required Global Cooperation Required
• Begin Now And Plan For Sustained CommitmentBegin Now And Plan For Sustained Commitment
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Global Oil and Gas Study
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All Strategies Are Essential All Strategies Are Essential
2000 2010 2020 2030
MIL
LIO
N B
AR
RE
LS P
ER
DA
Y
30
Source: EIA Reference Case / NPC Global Oil and Gas study survey.
Illustrative View
15EXPAND & DIVERSIFY
MODERATE
YEAR
U.S. LIQUID FUELS DEMAND
U.S. LIQUID FUELS
GLOBAL TRADE (NET IMPORTS)
Global Oil and Gas StudyNPC
40
Thank You Thank You
Global Oil and Gas StudyNPC
41
Thank you for listening to this presentation of the Thank you for listening to this presentation of the
NPC Report: NPC Report:
“Facing the Hard Truths About Energy”“Facing the Hard Truths About Energy”
For information, please refer to the NPC Website For information, please refer to the NPC Website
for a complete list of available resources:for a complete list of available resources:
http:www.npc.orghttp:www.npc.org
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