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Strategic Advisors in Global Energy
Petrotech 2010 Moderator & Backround Slides for Thought Leaders Panel
Prepared for Petrotech Organizing Committee by PFC Energy 30 September 2010
FINAL DRAFT
Thought Leaders Panel with Mr. Fareed Mohamedi Partner & Head of Markets & Country Strategies, PFC Energy
Petrotech | © 2010, PFC Energy | Page 2
Questions: 1. What are governments doing right? And wrong? 2. How will the battle play out between conventional and renewable energy sources? 3. What surprises are beyond the horizon? 4. How quickly will renewables and other non-traditional forms of energy gain share in the transportation and electricity generation markets?
Petrotech | © 2010, PFC Energy | Page 3
Prices Apparently Being Sustained Above What Spare Capacity Would Suggest
The combination of the “massive passive” and the “Abdullah put” is providing price support Source: PFC Energy Market Intelligence Service
Petrotech | © 2010, PFC Energy | Page 4
What Will be Likely Impact On General Energy Equilibrium in the Future? Demand 1.5%
(mmb/d) 120
Biofuels
Tar Sands
100
1.0% 0.5%
80
OPEC Liquids 60
40
Non-OPEC Liquids
20
0 1995
2000
2005
2010
2015
2020
2025
2030
Tar sands and biofuels to play a vital role in meeting long-term demand growth Source: PFC Energy Global Liquids Supply Forecast
Petrotech | © 2010, PFC Energy | Page 5
Different Policies Have Brought Varying Progress on Efficiency U.S. 4.5
- 4% (- 0.1% CAGR) tonnes CO2 per capita
tonnes CO2 per capita
25
China
20 15 10 5 0
4.0
+238% (+ 4.1% CAGR)
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
1975
1980
1985
1990
1995
2000
2005
1975
Sweden
1985
1990
1995
2000
2005
Russia 16
10
tonnes CO2 per capita
12 tonnes CO2 per capita
1980
-43% (- 1.9% CAGR)
8 6 4 2 0
- 28% (- 2.1% CAGR) over 15 years
14 12 10 8 6 4 2 0
1975
1980
1985
1990
1995
2000
2005
1990
1995
2000
2005
Petrotech | © 2010, PFC Energy | Page 6
Where Do the “Hybrids” Fit? Sovereign Wealth Funds
International
Aabar • DIC • ADIA
TAQA
• QIA • KIA
IPIC
Mubadala RAK Petroleum
• SAMA • DG
Regional
Government Investment Vehicles
OOC
• SGRF
ENOC
Passive
ADNOC
Dubai Energy Active
Operational
Investment vehicles increasingly going overseas and better equipped to manage operations Petrotech | © 2010, PFC Energy | Page 7
Contribution of Alternatives is Still Minimal
Solar and wind provide only one-tenth of 1% of the world’s energy Source: IEA 2007
Petrotech | © 2010, PFC Energy | Page 8
Future of Renewable Transportation Fuels Will Vary With Country Specifics
Growth of alternative transport fuels is highly dependent on government support—especially in early years of development Source: PFC Energy
Petrotech | © 2010, PFC Energy | Page 9
Potential Technology Surprises From Multiple Directions Lower demand Conventional Quantum computing
Reservoir simulations
EOR New trading algorithms
Costs
Plug in Hybrids
Nanotech Batteries Smart sensors
CCS Wind/Solar
New Materials Ultra deepwater Artic and other Frontier areas
IGCC’s CTL with CCS
Syngas Down-hole Processing power
Lower costs New fuels
Biotech
Reservoir optimizations
Based on research and node layout by Kevin Boyack and Dick Klavans; data from Thompson ISI; graphics & typography by W. Bradford Paley. Commissioned and partially supported by Katy Borner and the Places and Spaces: Mapping Science exhibition. 2006. Petrotech | © 2010, PFC Energy | Page 10
How Will Regulations Evolve, Post-Macondo? Regulatory systems do not develop along the same path in every country. Major accidents change attitudes and tolerance of risk.
Safety Case Regulation
Prescriptive Regulation
SelfRegulation
Governments with stronger capacity to set and enforce regulations
Regulation of business emphasizes efficiency rather than maximum oversight
Societies that tend to demand greater regulation and oversight of industry
Belief that extensive regulations create delays
Greater influence by large industries including NOCs
Higher tolerance for risk
Countries that generally have less separation between government and the private sector
Less implicit trust that private industry can independently manage risk
Norway, UK, Australia, Canada, Brazil
United States, China, Indonesia, Malay sia
Weaker government capacity and fewer resources
Mexico, Angola, Nigeria, Ghan a Petrotech | © 2010, PFC Energy | Page 11
Crude Price Must Exceed $75 to Displace Diesel as Cheapest Transportation Fuel
Source: PFC Energy Carbon Strategy Service Assumes Honda Civic / Nissan Leaf, 15 year life, 12,000 miles/yr; $75/bbl oil price Petrotech | © 2010, PFC Energy | Page 12
2006 CO2 Emissions Totaled 28 Billion Tonnes— Average 4.3 Tonnes/Person
Source: PFC Energy Carbon Strategy Service
Petrotech | © 2010, PFC Energy | Page 13
Biofuels Significantly Penetrating Transportation Market National targets and energy security drive global demand: PFC Energy modeling projects 6.1% biofuel share of world transport fuel market by 2015
Source: PFC Energy Global Outlook for Alternative Liquids
Petrotech | © 2010, PFC Energy | Page 14
Strategic Advisors in Global Energy PFC Energy consultants are present in the following locations:
Main regional offices: Asia
Middle East
PFC Energy, Kuala Lumpur Level 27, UBN Tower #21 10 Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia Tel (60 3) 2172-3400 Fax (60 3) 2072-3599
PFC Energy, Bahrain Bahrain Financial Harbor (BFH) East Tower 5th Floor P.O. Box 11118 Manama- Bahrain Tel (973) 7705 8880
Beijing
Brussels
Delhi
Ho Chi Minh City
Houston
Kuala Lumpur
Lausanne
London
PFC Energy, China 79 Jianguo Road China Central Place Tower II, 9/F, Suite J Chaoyang District Beijing 100025, China Tel (86 10) 5920-4448 Fax (86 10) 6530-5093
Manama
Europe
Mumbai
New York
Paris
Vancouver
Washington, DC
Main regional offices are shown in blue.
PFC Energy, France 19 rue du Général Foy 75008 Paris, France Tel (33 1) 4770-2900 Fax (33 1) 4770-5905 PFC Energy International, Lausanne 1-3, rue Marterey 1003 Lausanne ,Switzerland Tel (41 21) 721-1440 Fax: (41 21) 721-1444
North America PFC Energy, Washington D.C. 1300 Connecticut Avenue, N.W. Suite 800 Washington, DC 20036, USA Tel (1 202) 872-1199 Fax (1 202) 872-1219 PFC Energy, Houston 4545 Post Oak Place, Suite 312 Houston, Texas 77027-3110, USA Tel (1 713) 622-4447 Fax (1 713) 622-4448
www.pfcenergy.com | [email protected] Petrotech | © 2010, PFC Energy | Page 15
Petrotech 2010 Moderator & Backround Slides for Thought Leaders Panel
Prepared for Petrotech Organizing Committee by PFC Energy 30 September 2010
FINAL DRAFT
Thought Leaders Panel with Mr. Fareed Mohamedi Partner & Head of Markets & Country Strategies, PFC Energy
Petrotech | © 2010, PFC Energy | Page 2
Questions: 1. What are governments doing right? And wrong? 2. How will the battle play out between conventional and renewable energy sources? 3. What surprises are beyond the horizon? 4. How quickly will renewables and other non-traditional forms of energy gain share in the transportation and electricity generation markets?
Petrotech | © 2010, PFC Energy | Page 3
Prices Apparently Being Sustained Above What Spare Capacity Would Suggest
The combination of the “massive passive” and the “Abdullah put” is providing price support Source: PFC Energy Market Intelligence Service
Petrotech | © 2010, PFC Energy | Page 4
What Will be Likely Impact On General Energy Equilibrium in the Future? Demand 1.5%
(mmb/d) 120
Biofuels
Tar Sands
100
1.0% 0.5%
80
OPEC Liquids 60
40
Non-OPEC Liquids
20
0 1995
2000
2005
2010
2015
2020
2025
2030
Tar sands and biofuels to play a vital role in meeting long-term demand growth Source: PFC Energy Global Liquids Supply Forecast
Petrotech | © 2010, PFC Energy | Page 5
Different Policies Have Brought Varying Progress on Efficiency U.S. 4.5
- 4% (- 0.1% CAGR) tonnes CO2 per capita
tonnes CO2 per capita
25
China
20 15 10 5 0
4.0
+238% (+ 4.1% CAGR)
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
1975
1980
1985
1990
1995
2000
2005
1975
Sweden
1985
1990
1995
2000
2005
Russia 16
10
tonnes CO2 per capita
12 tonnes CO2 per capita
1980
-43% (- 1.9% CAGR)
8 6 4 2 0
- 28% (- 2.1% CAGR) over 15 years
14 12 10 8 6 4 2 0
1975
1980
1985
1990
1995
2000
2005
1990
1995
2000
2005
Petrotech | © 2010, PFC Energy | Page 6
Where Do the “Hybrids” Fit? Sovereign Wealth Funds
International
Aabar • DIC • ADIA
TAQA
• QIA • KIA
IPIC
Mubadala RAK Petroleum
• SAMA • DG
Regional
Government Investment Vehicles
OOC
• SGRF
ENOC
Passive
ADNOC
Dubai Energy Active
Operational
Investment vehicles increasingly going overseas and better equipped to manage operations Petrotech | © 2010, PFC Energy | Page 7
Contribution of Alternatives is Still Minimal
Solar and wind provide only one-tenth of 1% of the world’s energy Source: IEA 2007
Petrotech | © 2010, PFC Energy | Page 8
Future of Renewable Transportation Fuels Will Vary With Country Specifics
Growth of alternative transport fuels is highly dependent on government support—especially in early years of development Source: PFC Energy
Petrotech | © 2010, PFC Energy | Page 9
Potential Technology Surprises From Multiple Directions Lower demand Conventional Quantum computing
Reservoir simulations
EOR New trading algorithms
Costs
Plug in Hybrids
Nanotech Batteries Smart sensors
CCS Wind/Solar
New Materials Ultra deepwater Artic and other Frontier areas
IGCC’s CTL with CCS
Syngas Down-hole Processing power
Lower costs New fuels
Biotech
Reservoir optimizations
Based on research and node layout by Kevin Boyack and Dick Klavans; data from Thompson ISI; graphics & typography by W. Bradford Paley. Commissioned and partially supported by Katy Borner and the Places and Spaces: Mapping Science exhibition. 2006. Petrotech | © 2010, PFC Energy | Page 10
How Will Regulations Evolve, Post-Macondo? Regulatory systems do not develop along the same path in every country. Major accidents change attitudes and tolerance of risk.
Safety Case Regulation
Prescriptive Regulation
SelfRegulation
Governments with stronger capacity to set and enforce regulations
Regulation of business emphasizes efficiency rather than maximum oversight
Societies that tend to demand greater regulation and oversight of industry
Belief that extensive regulations create delays
Greater influence by large industries including NOCs
Higher tolerance for risk
Countries that generally have less separation between government and the private sector
Less implicit trust that private industry can independently manage risk
Norway, UK, Australia, Canada, Brazil
United States, China, Indonesia, Malay sia
Weaker government capacity and fewer resources
Mexico, Angola, Nigeria, Ghan a Petrotech | © 2010, PFC Energy | Page 11
Crude Price Must Exceed $75 to Displace Diesel as Cheapest Transportation Fuel
Source: PFC Energy Carbon Strategy Service Assumes Honda Civic / Nissan Leaf, 15 year life, 12,000 miles/yr; $75/bbl oil price Petrotech | © 2010, PFC Energy | Page 12
2006 CO2 Emissions Totaled 28 Billion Tonnes— Average 4.3 Tonnes/Person
Source: PFC Energy Carbon Strategy Service
Petrotech | © 2010, PFC Energy | Page 13
Biofuels Significantly Penetrating Transportation Market National targets and energy security drive global demand: PFC Energy modeling projects 6.1% biofuel share of world transport fuel market by 2015
Source: PFC Energy Global Outlook for Alternative Liquids
Petrotech | © 2010, PFC Energy | Page 14
Strategic Advisors in Global Energy PFC Energy consultants are present in the following locations:
Main regional offices: Asia
Middle East
PFC Energy, Kuala Lumpur Level 27, UBN Tower #21 10 Jalan P. Ramlee 50250 Kuala Lumpur, Malaysia Tel (60 3) 2172-3400 Fax (60 3) 2072-3599
PFC Energy, Bahrain Bahrain Financial Harbor (BFH) East Tower 5th Floor P.O. Box 11118 Manama- Bahrain Tel (973) 7705 8880
Beijing
Brussels
Delhi
Ho Chi Minh City
Houston
Kuala Lumpur
Lausanne
London
PFC Energy, China 79 Jianguo Road China Central Place Tower II, 9/F, Suite J Chaoyang District Beijing 100025, China Tel (86 10) 5920-4448 Fax (86 10) 6530-5093
Manama
Europe
Mumbai
New York
Paris
Vancouver
Washington, DC
Main regional offices are shown in blue.
PFC Energy, France 19 rue du Général Foy 75008 Paris, France Tel (33 1) 4770-2900 Fax (33 1) 4770-5905 PFC Energy International, Lausanne 1-3, rue Marterey 1003 Lausanne ,Switzerland Tel (41 21) 721-1440 Fax: (41 21) 721-1444
North America PFC Energy, Washington D.C. 1300 Connecticut Avenue, N.W. Suite 800 Washington, DC 20036, USA Tel (1 202) 872-1199 Fax (1 202) 872-1219 PFC Energy, Houston 4545 Post Oak Place, Suite 312 Houston, Texas 77027-3110, USA Tel (1 713) 622-4447 Fax (1 713) 622-4448
www.pfcenergy.com | [email protected] Petrotech | © 2010, PFC Energy | Page 15
