new century, new business models gemi power conference june 2006
TRANSCRIPT
New Century, New Business Models
GEMI Power ConferenceJune 2006
New Century, New Business Models
2 Private and Confidential
China & India aspire to OECD living standards – their rise to materiality changes everything
World Population (Billion in 2005)
1.1
1.2
1.3
2.8
China India
More Developed Less Developed
Oil Consumption(MMBD in 2005)
2.5
49.3
7.0
23.7
China India
More Developed Less Developed
New Century, New Business Models
3 Private and Confidential
Oil
Other
Oil
Other
Oil has little competition in the transportation sector
Global
Transportation
85.9 Quads 125.0 Quads
2003 2030
+45%
Source: EIA IEO2006
New Century, New Business Models
4 Private and Confidential
Coal
Oil Gas
Nuclear
Renew
Coal
Oil Gas
Nuclear
Renew
Coal and natural gas are competing for power growth
Global
Power Generation163.7 Quads 296.4 Quads
+81%
Source: EIA IEO2006
2003 2030
New Century, New Business Models
5 Private and Confidential
Issue #1: Oil and gas suffer from a security of supply “externality”
Global Hydrocarbon Reserves
125
6540
0
100
200
300
400
500
Oil Gas Coal
Mto
e
0
20
40
60
80
100
120
140
R/P
(Y
ea
rs)
Russia China & India North America
Middle East Other R/P
New Century, New Business Models
6 Private and Confidential
Issue #2: Coal suffers from a GHG emissions “externality”
0
1000
2000
3000
4000
5000
MMT
Coal Oil Nat Gas
1990
2010
2030
CO2 Emissions - North America
0
1000
2000
3000
4000
5000
MMT
Coal Oil Nat Gas
1990
2010
2030
CO2 Emissions - Other OECD
0
1000
2000
3000
4000
5000
MMT
Coal Oil Nat Gas
1990
2010
2030
CO2 Emissions - China
0
1000
2000
3000
4000
5000
MMT
Coal Oil Nat Gas
1990
2010
2030
CO2 Emissions - India
Source: EIA IEO2006
New Century, New Business Models
7 Private and Confidential
Personal Mobility
Electrons On
Demand
Emissions Control
Primary “Goods”
To address these issues, we must reframe our sense of industry purpose and boundaries
Crude Oil Natural Gas Coal
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Nuclear
Engineered Crops
Hydrocarbons
Carbon Neutral
Resource Segments
Nuclear Waste Transportation
Bio-refiningChem Processing
Transmission
Sequestration
ICE
Fuel Cell
Gasoline & Diesel
Gasification
Combined Cycle
Chemical Separatio
n
Syngas
Hydrogen
Fischer Tropsch
Refining
CO2 Flue Gas
PC
New Century, New Business Models
8 Private and Confidential
Bas
ic P
ow
er P
lay?
Tra
nsp
ort
of
Del
igh
t?What will be the Winning Business Models?
Hydrocarbons
Personal Mobility
Crude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
Electrons On
Demand
CO2 Flue Gas
Emissions Abatement
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
New Century, New Business Models
9 Private and Confidential
Conservative Oil?
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
10 Private and Confidential
Big Dig?
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
11 Private and Confidential
Big Oil to Big Energy?
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
12 Private and Confidential
Global Cool?
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
13 Private and Confidential
Super-Power?
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
14 Private and Confidential
Why Not? The Ultimate Resource is Human Ingenuity
HydrocarbonsCrude Oil
Gasoline & Diesel
Natural Gas
Syngas
Hydrogen
Gasification
Fischer Tropsch
Fuel Cell
Refining
Bio-fuelsWind, Tides,
Currents, Waves, Solar
Coal
CO2 Flue Gas
Nuclear
Combined Cycle
Chemical
Separation
Nuclear
Waste
Engineered Crops
Bio-refining Carbon Neutral
ICE
Personal Mobility
Electrons On
Demand
Emissions Abatement
New Century, New Business Models
15 Private and Confidential
Key strategic questions for an industry in transition to a very different future
• What are the big trends and how can we get downwind of them?
• Can we shape the way the rules of the game are written?
• What should be our direction and what goals should we set?
• What should be the boundaries of our business portfolio?
• Which areas should we focus on with greatest intensity?
• What is the best business model for competitive advantage?
– What will be the value drivers?
– How do we leverage our existing and new competencies?
• How do we build out the strategy to get where we want to?
• Which partners will we need to execute the strategy?
• Is our leadership aligned with the new direction?
New Century, New Business Models
16 Private and Confidential
Chris Ross
CRA International
1600 Smith Street
Houston, TX 77002
(713) 646-2211