The Outlook for Domestic Fossil Fuel Prices and Availability

2007 AIChE-ACS Management Conference Managing CPI Energy and Raw Materials Uncertainties in a Global Context

April 25, 2007 Houston, Texas A. Michael Schaal Director, Oil and Gas Division Office of Integrated Analysis and Forecasting Energy Information Administration
Official Energy Statistics from the U.S. Government

Energy Issues To Consider

Trends in Energy Demand The Role of Nuclear and Coal in Generation The Contribution of Ethanol What of Coal-To-Liquids and Other Alternative Fuels? What of LNG and Other Natural Gas Sources? What Does This Mean For Prices?
2007 AIChE-ACS Management Conference

World Oil Prices* in Three Cases (2005 dollars per barrel)

100

History

Projections
High Price $100

80

60

Reference case $59

40

Low Price $35

20

0 1980

History
1990 2000 2005 2010

Projections
2020 2030

* Foreign low-sulfur light crude oil prices 2007 AIChE-ACS Management Conference

World Oil Prices* in Three Cases (Nominal dollars per barrel)

160

History

Projections
High Price $157

120
Reference case $95

80
Low Price $58

40

0 1980 1990 2000 2005 2010 2020 2030

* Foreign low-sulfur light crude oil prices 2007 AIChE-ACS Management Conference

Primary Energy Consumption by Fuel, 1960-2030

(quadrillion Btu)
150 125 100
Petroleum

75 50 25 0 1960
Coal

Natural Gas Nuclear

Renewables

1970

1980

1990

2000

2010

2020

2030

2007 AIChE-ACS Management Conference

Liquid Fuels Production, Consumption, and Imports (million barrels per day)
30

History

Projections

25

20

Consumption 60% Net imports

61%

15

10

Production
5

0 1980 1990 2000 2005 2010 2020 2030

2007 AIChE-ACS Management Conference

Domestic Crude Oil Production by Source, 1990-2030 (million barrels per day)
8

History

Projections

Total

Lower 48 Onshore Deep Water Offshore

Alaska
0 1990 1995 2000 2005

Shallow Water Offshore

2010 2015 2020 2025 2030

2007 AIChE-ACS Management Conference

Ethanol Consumption as E85 and Blended with Motor Gasoline, 1981-2030 (billion gallons)
20
History Projections

15

Ethanol Blended into Motor Gasoline

10

Ethanol in E85
0 1980 1990 2000 2010 2020 2030

2007 AIChE-ACS Management Conference

Ethanol Supply by Source, 2003-2030 (billion gallons)

20 16 12
RFS
History Projections

Imports Cellulose Based

8 4 0 2003
Corn Based

2008

2013

2018

2023

2028

2007 AIChE-ACS Management Conference

Non-conventional Petroleum Liquids Capital Investment Costs (2005 thousand dollars per daily barrel of capacity)
Shale Oil Oil Sands Extra-Heavy Oil Biomass-To-Liquids Coal-To-Liquids Gas-To-Liquids Ethanol (Corn) Biodiesel Oil Refinery 0 20 40 60 80 100 120 140 160

2007 AIChE-ACS Management Conference

Gas-to-Liquids, Coal-to-Liquids, and Oil Shale Production in the Price Cases, 1990-2030 (million barrels per day)
History Projections
Coal to Liquids/ High price

2.0 1.6 1.2 0.8 0.4 0.0 1990

Coal to Liquids/ Reference Oil Shale/High price Gas to Liquids/ High price 2030

1995

2000

2005

2010

2015

2020

2025

2007 AIChE-ACS Management Conference

Natural Gas Production, Consumption, and Imports, 1980-2030 (trillion cubic feet)
30

History

Projections 26.1 Tcf

25

Consumption 16% Production

Net imports

21%
20.6 Tcf

20

15

Natural Gas Net Imports, 2005 and 2030 (trillion cubic feet)
7 6 5 4 3
2005 2030

10

4.5

3.0

2 1 0

0.9

0.6 Liquefied Natural Gas

Pipeline

0 1980 1990 2000 2010 2020 2030

2007 AIChE-ACS Management Conference

U.S. Natural Gas Consumption by Sector, 1990-2030 (trillion cubic feet)

10

History

Projections

Industrial
8

Electric Power

Residential

Commercial
2

Transportation
0 1990 1995 2000 2005 2010 2015 2020 2025 2030

2007 AIChE-ACS Management Conference

Electricity Capacity Additions by Year

70 60 50 40 30 20 10 0
1950 1960 1970 1980 1990 2000 2010 2020 2030
2007 AIChE-ACS Management Conference

Coal Hydro

Oil and Gas Other

Nuclear

Energy Information Administration

Official Energy Statistics from the U.S. Government

Natural Gas Production by Source, 1990-2030 (trillion cubic feet)

10

History

Projections

Lower 48 Non-Associated Unconventional

Lower 48 Non-Associated Conventional Onshore

Lower 48 Non-Associated Offshore

Lower 48 Associated-Dissolved Alaska

0 1990 1995 2000 2005 2010 2015 2020 2025 2030

2007 AIChE-ACS Management Conference

Technically Recoverable U.S. Natural Gas Resources as of January 1, 2005 (trillion cubic feet)
Proved 193 Inferred nonassociated
176 50

226 283
126

Undiscovered nonassociated
119 164

Offshore Onshore Offshore Onshore Coalbed methane 74

Unconventional
278

478

Other unproved
131 31

162
200 300 400

Shale gas Tight gas Alaska Lower 48 associated-dissolved

100

500

600

Total: 1,342 trillion cubic feet

2007 AIChE-ACS Management Conference

Lower 48 Natural Gas Wellhead Prices in Three Cases, 1980-2030 (2005 dollars per thousand cubic feet)
8

History
7 6 5 4 3 2 1 0 1980 1985 1990 1995 2000 2005

Projections

High Price $7.63 Reference Case $5.98 Low Price $5.06

2010

2015

2020

2025

2030

2007 AIChE-ACS Management Conference

Lower 48 Natural Gas Wellhead Prices in Three Cases, 1980-2030 (nominal dollars per thousand cubic feet)
12

History
10

Projections

High Price $11.99

Reference Case $9.62 Low Price $8.42

0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

2007 AIChE-ACS Management Conference

Annual Energy Outlook 2007, February 8, 2007

International Energy Outlook 2006, June 2006

AEO2007 Assumptions, April 2007

A. Michael Schaal Energy Information Administration Michael.Schaal@eia.doe.gov www.eia.doe.gov

2007 AIChE-ACS Management Conference