u.s. energy market: part 1 consumption

U.S. Energy Market: Part 1Consumption

We consume 26% of World Energy or nearly 20 mmbo per day

Mature market economy

U.S. Energy Consumption, 1775-1999

Energy Consumption by Fuel, 1949-2020

U.S. Energy Flow, 1999 (Quadrillion Btu)

Transportation Consumption

Industrial Consumption

Long-Term Heating Oil Use (1947-1999)Residential, Commercial & Farming

Cost of Household Energy, 1979-1999Inflation Adjusted to 2000 Dollars

O& G Journal - 8/28/2000

Household Expenditures by Space-Heating Intensity, 1997

Gasoline Market

Gasoline Consumption

O& G Journal - 7/24/2000

Motor Vehicle Efficiency

Gasoline Additives & Markets

O& G Journal - 7/10/2000

O& G Journal - 7/10/2000

O& G Journal - 7/10/2000

Environmental Investments

O& G Journal - 7/17/2000

O& G Journal - 7/17/2000

Renewable Energy Consumption by Source

Renewable Energy Consumption by Source

Renewable Energy Consumption by Source

U.S. Energy Market: Part 2Production

Production and Consumption

Petroleum Production and Consumption

Oil Flow, 1999 (Millions Barrels per Day)

Oil Well Productivity

Lower 48 and Alaskan Crude Oil Production

Natural Gas Overview

Natural Gas Flow, 1999 (Trillion Cubic Feet)

Energy Production, 2000

Coal

• Major source of energy since 19c.• Production in eastern and western US• Significant CO2 and particulate emissions• Cleaner plants (still disposal issue)• Coalbed methane (capital investment)• International CO2 reduction (e.g., EPA/China)• Coal consumption down -both US & World• Key factors in production: rank, thickness,

continuity of beds; sulfur content; transportation; politics

Nuclear

• Significant since early 1970’s• No new plants approved, but licenses

renewed in several• Many plants deactivated• Nuclear waste disposal issue• International issues

- Russia/FSU

- France/Korea/Japan• Three Mile Island (1979) & Chernoble (1986)

Types of Oil and Gas Wells

• Exploration (high risk) ~10% av. success rate

Frontier

New basins

• Development (lower risk)Fields (Rocky Mt thrust belt v. Permian Basin)

Oil & Gas Exploratory Wells, 1949-1999

O& G Journal - 9/25/2000

O& G Journal - 9/25/2000

Oil & Gas Exploratory Wells, 1949-1999

O& G Journal - 9/25/2000

Oil & Gas Exploratory Wells, 1949-1999

Oil & Gas Development Wells, 1949-1999

Oil & Gas Development Wells, 1949-1999

Oil & Gas Development Wells, 1949-1999

Oil & Gas Drilling Activity Measurements

Drilling, Finding and Development Cost

Technically Recoverable Petroleum Resource Estimates, January 1, 1999

Technically Recoverable Petroleum Resource Estimates, January 1, 1999

Technically Recoverable Petroleum Resource Estimates, January 1, 1999

Summary

• U.S. oil production will continue to decline• U.S. increasing will be dependent upon oil

imports• Natural gas is of growing significance• Renewable energy and new technologies

are extremely important• Protecting the environment is a high

priority• A strong economy is a high priority

• April, 2001 WSJ/NBC poll found that energy was our most important economic issue by 3 to 1.

• US energy self-sufficiency is a myth (if we rely on fossil fuels).

• Is anyone concerned in Jan, 2002?

Part 3 Petroleum Reserves

• Industry Inventories– For operational needs (pipelines, refineries,

supply/demand)

• Strategic Petroleum Reserve (SPR)– Government controlled, emergency use

Strategic Petroleum Reserve

• 700 mmbo capacity at four salt domes in US Gulf Coast (545 mmbo in place in 2001).

• The SPR can hold approximately 70 days of oil imports at current demand.

Strategic Petroleum Reserve Stocks

2001 Oil Futures: Nymex

END

References

• SPR drawdowns trigger law of unintended consequences bySarah Emerson,Oil&Gas Journal, Dec 10, 2001, p. 24-30.

Inflation-Adjusted Cost of Crude Oil

SPR as Share of Domestic Stocks

O& G Journal - 7/24/2000

Inflation-Adjusted Cost of Crude Oil