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Peak Oil Paul Wallace Hunton Energy April 2008

Peak Oil Paul Wallace Hunton Energy April 2008. Global Energy Demand Source: The Outlook for Energy, ExxonMobil Jan 2008. Consumption by Sector. Source of Energy. Heating. Chemicals, Steel, Cement.

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Peak Oil Paul Wallace Hunton Energy April 2008

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  1. Peak OilPaul WallaceHunton EnergyApril 2008

  2. Global Energy DemandSource: The Outlook for Energy, ExxonMobil Jan 2008 Consumption by Sector Source of Energy Heating Chemicals, Steel, Cement Oil, gas and coal supply majority of global energy for power, transportation, and industrial use

  3. Global Power GenerationSource: The Outlook for Energy, ExxonMobil Jan 2008 Power growth supplied by increased gas consumption and dirty coal plants in developing countries

  4. Oil, Nat Gas and Coal PricingSource: Key Commodity Price and Differentials, Valero Apr 2008; Natural Gas Year in Review 2007, EIA Mar 2008; Average Weekly Coal Commodity Spot Prices, EIA Apr 2008; Canadian Oil Sands The Future of Oil in Canada, CAPP Jan 2008 $/boe* * Basis 6 MSCF nat gas/bbl, 2.9 bbl/ton PRB coal Light oil and nat gas prices increasing – coal significantly cheaper

  5. Liquid Fuel SourcesSource: Outlook for Liquids, ExxonMobil Jan 2007 North America liquid opportunity – heavy oil and oil shale

  6. Oil Sands Energy ConsumptionSource: BMO Capital Markets Conference, EnCana Sep 2007 Natural Gas Required for Bitumen Production Gas/Bitumen MSCF/bbl SOR bbl stm/bbl bit *Basis 0.35 MSCF/bbl stm 15-50% of crude energy value required to produce heavy oil sands bitumen

  7. Heavy Crude Conversion Sources: GTL Products, Sasol Chevron Feb 2004; Chevron Downstream Analyst Presenation, Mar 2008; Wall Street Journal Dec 3 2007, Conoco Phillips Fact Book 2007 Diesel and Hybrid – Same MPG Clean Product Yield From Heavy Crudes Vol% Requires significant hydrogen Produces Byproduct coke US and Europe New Diesel Vehicle Sales 35 MPG Req’d New refining technology required to produce high efficiency transportation fuels from heavy crudes

  8. Natural Gas and Coal SourcesSource: Energy Outlook, ExxonMobil Jan 2006, Natixis Hidden Gems Conference, Rentech Inc Oct 2007 Projected LNG Growth Global Energy Reserves GECF* * Gas Exporting Countries Forum Large LNG component globalizes gas price – increases energy security risk

  9. CO2 Emissions Reduction OptionsSource: Energy Outlook ExxonMobil, Jan 2006 Capture CO2 from coal fired power plants – or replace with nat gas fired plants

  10. Power Production CO2 EmissionsSource: Review of Supercritical Power Plant Technology Elsam, March 2003 CO2 kg/MWh Current NGCC CO2 reduced by power plant fuel switching and efficiency increasing

  11. USGC CO2 to EORSource: Moving Permian Basin Technology to the Gulf Coast: the Geologic Distribution of CO2 EOR Potential in Gulf Coast Reservoirs, Bureau of Economic Geology, UT Oct 2005 EOR CO2 pipelines Under development Oil EOR potential – 5 billion bbls CO2 storage - 3 billion tons Large USGC CO2 to EOR potential

  12. Multizone Miscible CO2 Vertical Flood Source: Geologic Sequestration of Carbon and CO2 – EOR, Advanced Resources International, Dec 2006 Current EOR • Extended EOR/ • CO2 Storage • 8x CO2 • 3x oil

  13. Renewable Power Generation DependabilitySources: Potential for Energy Efficiency, Demand Response and Onsite Renewable Energy to Meet Texas’s Growing Electricity Needs, Mar 2007; Wind Development FP&L March 2008 Power Generation Dependabilty Projected US Wind Power Growth % Large growth in wind power capacity – need backup source due to low reliability

  14. Nuclear Waste and Permitting IssuesSource: ExxonMobil Energy Outlook 2007, NRG 3Q2007 Results Presentation, Nov 2007 US Nuclear Waste US Nuclear Permitting Timeline Thousand Metric Tons Schedule Risk Nuclear power has significant permitting and waste disposal issues

  15. BiomassSource: Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply, DOE, USDA April 2005; Measuring the Merits of Corn Stover-Based Ethanol, Science Daily Jul, 2007 US Energy Supply from Biomass • Key Issues • Additional transportation fuel consumption • Limited collection infrastructure • Drying fuel consumption • Increased fertilizer demand • Lower food crop yield • Soil erosion % of Total US Energy Demand Corn stover bales ready for collection Significant energy potential in domestic biomass

  16. Biomass GasificationSource: Update of Nuon Power Buggenum plant performance and fuel flexibility, June 2005; Shell Coal Gasificaiton Process for Power and Hydrogen/Chemicals, Shell Global Solutions Oct 2004; The Willem-Alexander Centrale Visit – Coal Technology and Climate Change, July 2006 Shell Gasification Process – Dry Feed System Biomass+ To CO2 capture and H2 production Biomass Feed System – 50 wt% co-feed Nuon Buggenum gasification plant with biomass co-feed system Biomass commercially converted into hydrogen rich synthesis gas

  17. BiofuelsSources: CBOT April 2008; NYMEX April 2008;The Market newsletter April 2008; Agrium – Growing Across the Value Chain April 2008; World Bank April 2008; World Hunger Education Service, April 2008; GM April 2008 US Corn Use Crop Price Increases Corn Wheat Soybeans Rice $/Bushel $/Bushel $/Bushel $/Bushel Fuel/Fertilizer Price Increases Ammonia Diesel Potash Corn Alternatives Phosphate $/bbl $/Met ton $/Met ton $/Met ton 500 lb Corn Fill SUV with Ethanol (26 gal) Feed child for 1 year Biofuels – increase food prices and decrease exports volumes

  18. Reduced Energy Lifestyle ChangesSource: SolCool website 2008; Pedbikeimages.org/Dan Burden 2008 • Energy efficient housing • Windows, insulation, solar air conditioning • High efficiency appliances, smart shutoff • Minimal or reusable packaging • Requires price/tax incentives • Work from home • Utilize Internet connectivity • Eliminate routine commute • Eliminate redundant energy and materials use • Requires employer incentives • Mixed use communities • Walk to work and services • Multi-story residential footprint • Reverse suburban sprawl • Requires incentives for urban redevelopment SolCool solar powered air conditioning system Mixed use community Potential for reduced consumption through lifestyle changes

  19. Path Forward

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