Presentation Transcript
John C. FelmyChief Economist and Director Statistics DepartmentAmerican Petroleum InstituteFelmyj@api.orgwww.api.orgwww.gasolineandyou.orgwww.naturalgasfacts.org: Petroleum and Natural Gas Situation John C. Felmy Chief Economist and Director Statistics Department American Petroleum Institute Felmyj@api.org www.api.org www.gasolineandyou.org www.naturalgasfacts.org
What is needed in a National Energy Policy?: What is needed in a National Energy Policy? Conservation and energy efficiency are important but are insufficient alone.
Renewable energy is an important but small source of energy. Until it’s cost is reduced, it will continue to be a small source.
Even with improved efficiency and more renewable energy, we will still need more conventional energy – oil, coal, natural gas and nuclear. Robustness, Redundancy and Diversity
Slide3: EIA Forecast of Winter Fuel Costs – October 2004
Slide4: NOAA Winter Outlook
Déjà vu, All Over Again: Déjà vu, All Over Again 2003
Early 2003
Cold winter
Venezuela shutdown
Nigerian strikes
Iraq
High crude oil prices
California MTBE ban transition start
Summer 2003
Blackout
Pipeline problems
Strong demand
Japanese nuclear outages
2004
OPEC cuts
Cold winter
Japanese nuclear outages
Venezuela uncertainty
Iraq uncertainty
Nigerian uncertainty
Terrorist attacks
Norwegian Strikes
Yukos
Strong economic growth
Dollar depreciation
High crude oil prices
High natural gas prices
Lower sulfur gasoline
California finishes MTBE ban transition
Mississippi river accident
Refinery outages
Strong gasoline demand
NY/CT MTBE bans
Hurricanes
Slide6: Crude oil futures prices - NYMEX
Slide7: Gasoline - Retail
Slide8: Gasoline and crude oil prices
Slide9: Crude oil and gasoline prices – from lows to highs
Slide10: Diesel and crude oil prices
Slide11: Natural gas prices have been above year ago levels
Slide12: NYMEX propane futures prices are at or near record levels
Slide13: NYMEX heating oil prices are at record levels
Slide14: NYMEX coal prices
Slide15: OPEC Capacity - EIA Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Slide16: EIA Crude Oil Forecast Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Slide17: EIA Natural Gas Forecast Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Table 3a. OPEC Oil Production
(Thousand Barrels per Day)
(Energy Information Administration\Short-Term Energy Outlook -- July 2004)
Slide18: U.S. Energy Consumption Shares – 2003 - EIA
Slide19: U.S. Energy Consumption Shares – 2003 - EIA
Slide20: U.S. Energy Consumption Shares – 2003 - EIA
Slide21: U.S. Energy Consumption Shares – 2025 - EIA
Slide22: U.S. Residential Energy Consumption Shares – 2003 - EIA
Slide23: U.S. Industrial Energy Consumption Shares – 2003 - EIA
Slide24: U.S. Electricity Energy Consumption Shares – 2003 - EIA
Slide25: Transportation Fuel Shares – 2003 - EIA
Slide26: Petroleum Product Use Shares – 2003 - EIA
Slide27: Petroleum Product Usage – 2003 - EIA
Slide28: Petroleum Product Shares – 2003 - EIA
Slide29: Natural Gas Shares – 2003 - EIA
U.S. Energy Consumption – Quadrillion BtusAEO 2004 - EIA: U.S. Energy Consumption – Quadrillion Btus AEO 2004 - EIA
EIA Forecast to 2003 to 2025: EIA Forecast to 2003 to 2025 Real Gross Domestic Product is projected to increase by 92 percent
Population is projected to increase by 19 percent
Renewable energy supply is projected to increase by 50 percent
Energy efficiency (output per unit of energy) is projected to improve by 27 percent
Net petroleum imports are projected to increase, providing 70 percent of U.S. demand in 2025.
Growth in petroleum demand is led by transportation, where efficiency improvements are more than offset by growing travel demand and petroleum’s market share increases slightly.
Crude oil production falls by 19 percent.
Imports of crude oil grow by 65 percent.
Petroleum product imports increase by 80 percent.
Refinery capacity expands from 16.8 to 21.8 million barrels per day
Refinery utilization is projected to increase from 91 to 95 percent
World Energy Consumption – Quadrillion Btus - EIA: World Energy Consumption – Quadrillion Btus - EIA
World Energy Demand: World Energy Demand Total Energy Other Energy Solar & Wind Hydro Nuclear Biomass,
MSW Solar & Wind Oil Gas Coal Other 1.7 1.2 2.9 1.8 Growth Rate 2000-2020, % Solar Wind MBDOE MBDOE MBDOE Growth Rate 2000-2020, % Growth Rate 2000-2020, % 1.3 0.2 2.4 14.0 10.4 Source: ExxonMobil
Forecast demand growth: Forecast demand growth ROW LA Other Asia Pacific OECD Source: ExxonMobil
Massive supply growth needed: Massive supply growth needed Source: ExxonMobil Non-OPEC Crude
Undeveloped /
Undiscovered NGL / Other Non-OPEC Crude
Developed Non-OPEC Total 44 Non-OPEC Crude NGL/
Condensate Other OPEC Crude
World Oil Balance: 2000 - 2020: Latin America 3.5 2.0 FSU & Eastern Europe 3.1 6.8 Europe 7.2 10.6 Middle East Asia Pacific US/Canada 2000 2010 2020 Africa 5.3 8.1 Net Imports, MBD Net Exports, MBD 13.6 12.6 10.6 12.1 30.1 12.3 2000 2010 2020 8.8 7.2 2000 2010 2020 4.1 2000 2010 2020 2000 2010 2020 6.2 2000 2010 2020 2000 2010 2020 18.2 World Oil Balance: 2000 - 2020 21.8 34.5 27.2 18.5 Source: ExxonMobil
Technology: Technology Can be expected to adapt over several generations
Markets work – they provide flexibility and discipline
Attempts to replace oil prematurely are likely to be costly
“Running out” is not likely
Developing additional supply will be challenging: Developing additional supply will be challenging Non-OPEC production shifting to new challenging frontiers
Gulf OPEC needs to double capacity
Capital needs are enormous
Policy: Policy Promotion of free investment and trade is essential
Accurate depiction of impact of resource development is key
Opposition to oil development is a serious threat
One Word: One Word Hydrates
Slide41: First – Do No Harm!
Slide42: Global Change – What is really happening?
History: History
Carbon vs Solar: Carbon vs Solar
Slide45: Second quarter 2004 industry profits were below average
Slide46: Industry profits in perspective
Slide47: Industry concentration