EIA / 1994 -2014; Net Natural Gas Imports; Projected vs. Actual - UT Energy … · 2017-02-14 ·...

EIA / 1994 -2014; Net Natural Gas Imports; Projected vs. Actual

overestimated underestimated

(Wat

er D

epth

in m

eter

s)

(Chuchla, 2009)

0

500

1,000

1,500

2,000

2,500

1940 1950 1960 1970 1980 1990 2000 2010

Fixed PlatformTLP / CT / SparFPSO / SSDW Production (IHS)

0

500

1000

1500

2000

2500

1940 1950 1960 1970 1980 1990 2000 2010

y=3E-73e0.087x

R2 = 0.97Deepwater facilities; U. S. GOM

~ 1000 m

> 2500 m

DEEPWATER DEVELOPMENT CAPABILITY

3

The Outlook for Energy includes Exxon Mobil Corporation’s internal estimates and forecasts of energy demand, supply, and trends through 2040 based upon internal data and analyses as well as publicly available information from external sources including the International Energy Agency. Work on the report was conducted throughout 2016. This presentation includes forward looking statements. Actual future conditions and results (including energy demand, energy supply, the relative mix of energy across sources, economic sectors and geographic regions, imports and exports of energy) could differ materially due to changes in economic conditions, technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein and under the heading “Factors Affecting Future Results” in the Investors section of our website at www.exxonmobil.com. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved.

2017 Outlook for Energy: A View to 2040

Todd OnderdonkFebruary 2017

4

ExxonMobil 2017 Outlook for Energy

0%

25%

50%

75%

100%

125%

2015 2040

Global Trends Continue to Evolve

+1.8 billionpeople

2xGDP

+25%demand

+10%CO2 emissions

-45%CO2 intensity

Percent

Growth from 2015 Level

5


0

200

400

600

800

1000

1200

2000 2020 20400

200

400

600

800

1000

1200

2000 2020 20400

200

400

600

800

1000

1200

2000 2020 2040

Demand

Demand Growth From Developing NationsDemand without Efficiency

Energy Savings

Energy DemandQuadrillion BTUs

OECD

Non-OECD

Non-OECD0

40

80

120

160

China

India

Other AP

Africa

Mid East

Americas

Growth 2015-2040Quadrillion BTUs

6


0

50

100

150

200

250

300

201520252040 201520252040 201520252040 201520252040

Primary Energy Demand by SectorQuadrillion BTUs

Electricity Generation Leads Growth

Non OECD

OECD

Transportation Res/CommIndustrialElectricity Generation

‘15

‘25

‘40

7


-3 0 3 6-3 0 3 6

OECD

China

India

Other AP

Africa

Middle East

Rest of World

Electricity Sources Shift Regionally

Change in Net Delivered Electricity 2015-2040

Thousand TWh

Oil

Gas

Wind/Solar

Nuclear

Other Renewables

Coal Net

-3 0 3 6

OECD

China

India

Other AP

Africa

Middle East

Rest of World

8


All Scenarios Require Ongoing DevelopmentLiquids Supply/DemandMBDOE

0

20

40

60

80

100

120

2015 2040 2040

*Based on IEA sources; excludes biofuels

Natural decline in the absence of

further investment Conventional Crude and

Condensate

NGLs

Tight Oil

Other

New investment in supply required to

offset natural decline and meet growing demand

Deepwater

9


0%

25%

50%

75%

100%

Technology Contributes to the Fuel Mix

Global Mix of Fuels

1850 1900 20001950Biomass

Coal

Oil

Gas

HydroNuclearOther Renewables

2040Source: Smil, Energy Transitions (1800-1960)

Unconventional Gas

Deepwater, Oil Sands, Tight Oil

10

For more information, visit exxonmobil.com/energyoutlookor download the ExxonMobil app

11


12


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15


16


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Energy ResearchR.T. DukesE: [email protected]: @rtdukesLI: linkedin.com/in/rtdukeshttps://soundcloud.com/woodmackenzie

Trusted commercial intelligence© Wood Mackenzie

https://soundcloud.com/woodmackenzie


21

Lower 48 breakeven map for Key Plays


22

$0

$20

$40

$60

$80

$100

$120

$140

$160

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WTI

bre

akev

en a

t 10%

IRR

(US$

/bbl

)

Percentage of cumulative undrilled liquids resource

Q1 2014

Q1 2015

Q1 2016

Q4 2016

Source: Wood Mackenzie

Liquids breakevens have fallen through the downturn, with the average 2016 breakeven $15/bbl lower than in 2014.

US Lower 48: Liquids cost curve over time

$55

Changes in Lower 48 liquids breakevens since 2014

Cost inflation limits short-term economic resource

$0

$10

$20

$30

$40

$50

$60

$70

$80

0 100 200 300 400 500 600 700 800 900 1,000 1,100

WTI

bre

akev

en a

t 10%

IRR

(US$

/bbl

)

2017 crude & cond. new drill production (‘000 bbls/d)

Flat costs

Gradual cost rise

Quick cost rise


0

5

10

15

20

25

30

Flat costs Gradual cost inflation

Und

rille

d cr

ude

& c

ond.

reso

urce

un

der $

50/b

bl (b

illio

n bb

ls)

Other L48 SCOOP/STACK

Niobrara Bone Spring

Bakken/TF Eagle Ford

Wolfcamp

25% less resource breaks even under $50/bbl


Cost scenariosGradual Quick

2017 10% 25%2018 25% 20%2019 10% 2%2020 2% 2%

2017 new drill production at risk Inflation impact on low-cost oil reserves


24

Disclaimer

This presentation has been prepared for the UT roundtable in February, 2017, by Wood Mackenzie Limited. The presentation is intended solely for the benefit of attendees and its contents and conclusions are confidential and may not be disclosed to any other persons or companies without Wood Mackenzie’s prior written permission.

The information upon which this presentation comes from are based on our own experience, knowledge and databases. The opinions expressed in this presentation are those of Wood Mackenzie. They have been arrived at following careful consideration and enquiry but we do not guarantee their fairness, completeness or accuracy. The opinions, as of this date, are subject to change. We do not accept any liability for your reliance upon them.

Strictly Private & Confidential


25

Europe +44 131 243 4400Americas +1 713 470 1600Asia Pacific +65 6518 0800

Email [email protected] www.woodmac.com

Wood Mackenzie* is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insight theyneed to make better strategic decisions. For more information visit: www.woodmac.com*WOOD MACKENZIE is a Registered Trade Mark of Wood Mackenzie Limited

CHENIERE ENERGY, INC.

February 2017

UT Energy Week Panel Discussion: Changing Supply and Demand

Sabine Pass Liquefaction Construction

27

Train 2

Train 5

Train 1Train 3

Train 4

Train 6 Under Development

Corpus Christi Liquefaction Construction

28

Train 1

Train 2

Tank A

Tank C

Train 3Under Development

Tank BUnder Development

Sabine Pass Vessel Loading

29

- 10 20 30 40 50 60 70

($12)($11)($10)

($9)($8)($7)($6)($5)($4)($3)($2)($1)$0$1$2$3$4$5$6$7$8$9

- 500 1,000 1,500

Years Supply1

$/m

mbt

u

Tcf

Abundant Shale Gas Reserves Cap Sustainable Price Increases800 Tcf producible below $3.00 Henry Hub (30 years) 1,400 Tcf producible below $4.00 Henry Hub (51 years)

~1400 Tcf<$4.00

~800 Tcf<$3.00

30

Source: IHS Shale Gas Reloaded, Break-even price required to earn a 10% unlevered return1. Assuming 2015 U.S. Consumption of 27.3 Tcf

Supply/Demand Gap: Why the US Needs LNG

31Source: EIA AEO 2017

~13 Bcf/D (86 MTPA)

0

10

20

30

40

50

60

70

80

90

100

2016 2020 2025 2030 2035

Bcf

/D

Production and Net Pipeline Imports Residential/Commercial Industrial

Power Transportation Pipeline, Lease, and Plant Fuel

Global demand growth will be driven by power/industrial sectorsExpected to drive 70% of total growth

-

50

100

150

200

250

300

350

400

450

500

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Bcf

/dTransportNon-Combusted UseBuildingsPowerIndustry

-

20

40

60

80

100

120

140

2020 2025 2030 2035B

cf/d

TransportNon-Combusted UseBuildingsPowerIndustry

Total Consumption Projected growth vs. 2015

Gas consumption by sector (BP Energy Outlook 2017)

Source: BP Energy Outlook 2017

U.S. coal-to-gas switching a blueprint for the rest of the industrialized world

Fuel substitution – primarily coal to gas – helped balance the natural gas market as the price declined relative to coal. More recently, policy driven substitution increased gas consumption as coal plants retire

33

Sources: EIA, EPA, Cheniere Gas Supply

0

5

10

15

20

25

30

35

40

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

Jan-

16

Apr

-16

Jul-1

6

Oct

-16

Bcf

/D

Retirements Substitution Total Power Burn

U.S. Gas Consumption for Electric Generation (Power Burn)

Thank you

34


35

Europe +44 131 243 4400Americas +1 713 470 1600Asia Pacific +65 6518 0800

Email [email protected] www.woodmac.com

Wood Mackenzie* is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insight theyneed to make better strategic decisions. For more information visit: www.woodmac.com*WOOD MACKENZIE is a Registered Trade Mark of Wood Mackenzie Limited

U.S. Natural Gas Outlooks

UT Energy WeekFebruary 7, 2017

36

A Strong “Demand Stack” Scenario v EIA AEO 2017

37CEE analysis; EIA AEO 2017

• Two largest uncertainties: Power generation and LNG exports

• Potential drivers:• Price of natural gas• Renewables generation

• Declining costs• Support programs

• Coal retirements• Env’l regulations

• Nuclear retirements • Aging fleet, rising costs

• CO2 prices• Load growth

• EE, DER, DR

CEE Electric Power Research Forum - Scenarios

• We model* numerous scenarios based on different combinations of the following key assumptions

(1) Renewable resource capacities(2) Natural gas price(3) Load growth rate(4) Premature nuclear capacity retirement(5) CO2 prices

* We use AURORAxmp for economic dispatch and long-term resource expansion modeling

38

http://www.beg.utexas.edu/energyecon/epr/

http://www.beg.utexas.edu/energyecon/epr/

NG burn for power generation should continue to grow, but there is a 8.5-TCF (23-BCFD) range among scenarios

39

0

2

4

6

8

10

12

14

16

18

TCF

Increase in Min with CO2 prices RangeIncrease in Max with CO2 prices MedianMedian with CO2 prices

For details, see Tsai & Gülen, Natural Gas Use in Electricity Generation in the United States: Outlooks to 2030, Electricity Journal, forthcoming in March.

8.8 – 11.8 TCF (AEO 2017 range), excluding 6 TCF under low OGR

Challenges Facing U.S. LNG Exports

40

• “Low” demand growth (China, India, and others):

• Coal, nuclear, renewables have priority - energy security

• Not enough gas infrastructure (especially storage)

• Low gas market readiness • Economic slow-down

• “Surging” global LNG supply excess supply until the early 2020s

• Unsubscribed U.S. liquefaction capacity

• Parts of contracted volumes not tied to specific destinations

http://www.beg.utexas.edu/energyecon/template/IAEE%20Energy%20Forum_062116.pdfhttp://www.beg.utexas.edu/energyecon/thinkcorner/CEE_Advisor_Research_Note-Andy_Flower_LNG_Supply_Outlook-Aug16.pdf

http://www.beg.utexas.edu/energyecon/template/IAEE%20Energy%20Forum_062116.pdf

http://www.beg.utexas.edu/energyecon/thinkcorner/CEE_Advisor_Research_Note-Andy_Flower_LNG_Supply_Outlook-Aug16.pdf

CEE Industrial Projects Database - About 100 Projects; Incremental NG demand of ~3 BCFD

41

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