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8/14/2019 Ascc Us Chamber 9-17-08
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ENERGYENERGYYour World vs. Americas ViewYour World vs. Americas View
vs. Washingtons Realityvs. Washingtons Reality
Karen A. HarbertKaren A. Harbert
Executive Vice PresidentExecutive Vice President
Institute for 21Institute for 21stst Century EnergyCentury Energy
US Chamber of CommerceUS Chamber of Commerce
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The New Energy RealityThe New Energy RealityEnergy Security is central to our national and economicEnergy Security is central to our national and economic
securitysecurity
Demand to increase 50% by 2030Demand to increase 50% by 2030
70% in developing world70% in developing world
Electricity demand to increaseElectricity demand to increase100%100%
1.6 billion people without1.6 billion people without
electricityelectricity
$20 trillion of new investment by$20 trillion of new investment by2030 to meet rising demand2030 to meet rising demand
Environmental Sustainability -Environmental Sustainability -over 70% of the currentover 70% of the current
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The New Energy RealityThe New Energy RealityEnergy Security is central to our national and economicEnergy Security is central to our national and economic
securitysecurity
Access to reserves is limitedAccess to reserves is limited
2/3 of worlds reserves becoming2/3 of worlds reserves becominginaccessibleinaccessible
Rising importance of NOCsRising importance of NOCs Own 80% of reservesOwn 80% of reserves
Lack of investment in explorationLack of investment in exploration
Significant rise in project costsSignificant rise in project costs Resource NationalismResource Nationalism
Lack of qualified engineers/skilledLack of qualified engineers/skilled
laborlabor
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Global ChallengesGlobal Challenges
CHINACHINA
China relies on coal for 70% of theirChina relies on coal for 70% of theirenergy needs, building one coal-firedenergy needs, building one coal-firedplant a weekplant a week
By 2025, they could have 300 millionBy 2025, they could have 300 millioncars on the road, compared to 30cars on the road, compared to 30million todaymillion today
By 2030, energy-related CO2By 2030, energy-related CO2emissions from China are projected toemissions from China are projected toaccount for 26% of the world total andaccount for 26% of the world total and
48% of total coal-related emissions48% of total coal-related emissionsworldwideworldwide
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Global Challenges
INDIAINDIA
Hopes to maintain an annual GDP growthHopes to maintain an annual GDP growthrate of 8% over the next 25 years.rate of 8% over the next 25 years.
That level of growth would require India to atThat level of growth would require India to at
least triple its primary energy supply andleast triple its primary energy supply andquintuple its electrical capacityquintuple its electrical capacity
Indias demand for oil will grow at an averageIndias demand for oil will grow at an averagerate of 2.9% over the next 25 years, yet theyrate of 2.9% over the next 25 years, yet they
have only 0.4% of the worlds proven oilhave only 0.4% of the worlds proven oilreserves and domestic production isreserves and domestic production isexpected to remain constant or declineexpected to remain constant or decline
Oil consumption has increased sixfold overOil consumption has increased sixfold overthe past 25 yearsthe past 25 years
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Market SituationMarket Situation
Market fundamentals are driving prices upMarket fundamentals are driving prices up Economic growth boosting demandEconomic growth boosting demand OPEC production decisionsOPEC production decisions Low OPEC spare capacityLow OPEC spare capacity Moderating non-OPEC production growthModerating non-OPEC production growth Falling inventoriesFalling inventories Refining bottlenecksRefining bottlenecks
Geopolitical risksGeopolitical risks
Increased speculationIncreased speculation Decline of Dollar leads to investing inDecline of Dollar leads to investing in
commoditiescommodities
HIGH PRICES AND VOLATILITYHIGH PRICES AND VOLATILITY
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Market Players
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0
5
10
15
20
25
1960 1970 1980 1990 2000 2010 2020 2030
Dependence on imports of liquid fuels andother petroleum by 2030
Consumption
Domestic Supply
Net Imports
60%
54%
Annual Energy Outlook 2008
History Projections
million barrels per day
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Whats changing?
Real Economic Impact
Driving down 4.7%
Definition of the Problem
75% are mad
Whos to Blame
Energy is a Priority
Washington is paralyzed
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Where are we headed?
Pew Research Center
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Whats our Problem?
Pew Research Center
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Has the recent rise in gas and oil prices caused
you or your family any financial hardship, or
not?.
70% - June
75% - July
63% - September
Los Angeles Times/Bloomberg/CNNPolls
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Whos to Blame? Not Big Oil
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Whos to Blame?
The favorability rating ofCongress is at an all time low of9% (Rasmussen Reports, August
2008) All eyes are on the Nov. 4 election
Change of heart by HouseSpeaker Nancy Pelosi?
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Growing Support for OilGrowing Support for Oil
ExplorationExploration
75% support increased75% support increased
exploration to reduce ourexploration to reduce our
dependence on foreign oil; 77% ofdependence on foreign oil; 77% of
independents and 66% ofindependents and 66% ofDemocrats (July Fox News Poll)Democrats (July Fox News Poll)
73% favor more exploration (June73% favor more exploration (June
CNN)CNN) 68% (June LA Times)68% (June LA Times)
67% (June Rasmussen)67% (June Rasmussen)
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We are not running out of resources,We are not running out of resources,
just ACCESS to themjust ACCESS to them
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Views on Climate Change
The public views climate change as aserious problem but not as a planetaryemergency.
Public believes energy security moreimportant than addressing climate
change Technology can solve climate change. Public not willing to make great personal
sacrifices. Public wants a joint cooperative effort
between government, business and thecitizens to solve the challenge. U.S. politics are in flux no matter who the
leader is; many different approaches arebeing debated in Congress and
throughout federal agencies.
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Where should we be going on a newWhere should we be going on a new
U.S. Energy Strategy?U.S. Energy Strategy?
Increase and Diversify Supply
Increase Suppliers
Improve Energy Efficiency
Accelerate TechnologyDevelopment and Deployment
Increase use of alternative and
renewable sources of energy Improve Environmental
Stewardship
Modernize and protect critical
infrastructure
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Road AheadRoad Ahead
Huge Public Expectations for nextHuge Public Expectations for nextPresidentPresident
Public is ahead of policymakersPublic is ahead of policymakers
Growing desire to capitalize onGrowing desire to capitalize on
American resources, create AmericanAmerican resources, create American
jobsjobs
Energy Policy is a Political Football nowEnergy Policy is a Political Football now
what will change next year? what will change next year? Need better informed debateNeed better informed debate
There will be a robust investment inThere will be a robust investment in
technology and innovationtechnology and innovation