An American Treasure
Abundant Natural Gas Supply An American Treasure ASPO 2009 International Peak Oil Conference Denver, Colorado October 12, 2009 Peter A. Dea President and CEO Cirque Resources LP
OVERVIEW I. New Sources of Abundant Supply of Domestic Clean Burning Abundant Natural Gas An American Treasure
Natural Gas • Multi‐decade trend in growing U.S. Natural Gas Supply • Shale Gas provides renaissance in long term supply • 100+ year supply
II. Technology Drivers for Recent and Future Natural Gas Supply • • •
Multi‐decade trend of improvements Horizontal Drilling and Completion – catalyst for new supply Growth, Environmental Mitigation and Efficiencies
III. Benefits of Natural Gas •
Win‐Win‐Win for Economy, Environment and National Security
IV. Role of Natural Gas in a Sound & Balanced Energy Policy • •
Time is right for Natural Gas to play critical role in U.S. Energy Policy Balanced energy plan requires many criteria 1
PART I Abundant Natural Gas An American Treasure
New Sources of Abundant Supply of Domestic Clean Burning Natural Gas
2
Abundant Natural Gas Supply Media Coverage Abundant Natural Gas An American Treasure
The New York Times- Estimate Places Natural Gas Reserves 35% Higher (Reprinted in Financial Post and on Canada.com) Associated Press- Report: US natural gas reserves surge 35 percent (Reprinted in Chicago Tribune, Seattle Times, Anchorage Daily News, Charleston Daily Mail, The Kingston Whig-Standard, The Spokesman Review and on FoxNews.com and clarionledger.com)
The Wall Street Journal‐ U.S. Natural‐Gas Supplies Surge Bloomberg- Potential U.S. Natural Gas Reserves Rise 39 Percent (Reprinted in LA Times) Investor’s Business Daily Natural Gas Sits Out 2009 Rally As U.S. Reserves Hit New Highs Greenwire- Report of Abundant U.S. Natural Gas Supplies Rattles Energy Debate Wall Street Journal Environmental Capital Blog- Gas Glut: Why the U.S. Boom Could Mean Cheaper Gas Everywhere Fort Worth Star Telegram‐ Deposits of natural gas are at record level The Vancouver Sun- 'Opportunities are emerging,' EnCana says Tulsa World- Shale gas reserves are a target for Devon Energy Corp. Businesswire- T. Boone Pickens Statement on Surge in Estimated Natural Gas Reserves PR Newswire- Statement by the American Clean Skies Foundation Regarding PGC Report Confirming America's Abundant Supply of Clean-Burning Natural Gas The Motley Fool- The Good News on Natural Gas The National (UAE)- Gas Market is Facing a New World Order The New American Magazine- Estimate of Natural-gas Reserves Jumps 35 Percent The Hill Pundits Blog- Pain at the Pump Oil & Gas Journal- Growing shale activity sends potential US gas resources to new peak Gas Daily- Shale gas pushes US resource base to 1,836 Tcf Financial Post Alberta to offer natural gas producers incentives
“We’re drowning in it (Natural Gas)”, Robert Hefner on NPR 3
U.S. Dry Natural Gas Proved Reserves U.S. Dry Natural Gas Proved Reserves
at 30 Year High Abundant Natural Gas
New Technologies, skilled workforce and exploration continually increase and fully replace reserves and gas consumed over last 40 years Cumulative Natural Gas Production 1978‐2006 485 tcf
An American Treasure
1978 EIA’s first proved reserves report 207 tcf
2007 Report: 238 tcf 2007 is 47% higher than 1993 low of 162 tcf
30 Year High
Source: DOE/EIA – 0216(2007) Advance Summary; MIT Energy Initiative, 2009
4
U.S. Production Grew by 4 Bcfd in 2008 U.S. Production Grew by 4 Bcfd Driven by Shale Gas and Tite SS Gas Driven by Shale Gas and Tite Abundant Natural Gas
Units = Bcfd
2007 2008 9.7 11.0
An American Treasure
Rockies
2.9 2.9
Bal of US 2.0
3.9 3.7
Paradox & San Juan 10.2 10.4
Anadarko & Permian
Source: BENTEK Energy, LLC
57.4
61.4
2.2
Appalachia 11.8
14.9
SE Sup Area
16.8 16.2
GOM & Gulf Coast
US Total
Production growth would have been approx 5 Bcfd without disruption of Hurricane’s Gustav and Ike or nearly 10% YOY!
5
U.S. Potential and Proved Reserves Summary Potential Gas Committee Report, 2008 Abundant Natural Gas An American Treasure
Traditional: Coalbed: Total Potential Gas Resources: Proved Reserves:
1673.4 Tcf 163.0 Tcf 1836.4 Tcf 237.7 Tcf *
Future Gas Supply TOTAL:
2074.1 Tcf
100+/‐ year supply Source: Potential Gas Committee, 12/2008, MIT Energy Initiative
*EIA 2007 6
U.S. Potential and Proved Reserves (TCF) Geographic Distribution Abundant Natural Gas An American Treasure
Pacific
Rocky Mountain
North Central
51.3
374.4
24.0
2.6
51.9
16.6
Mid‐ Continent
353.5 17.3
274.9 Alaska
7.5
Gulf Coast 455.2
193.8 57.0
3.4 Source: MIT Energy Initiative, 2009
Atlantic
*EIA 2007
Traditional gas Coalbed gas 7
Grabbing Market Share Lower Cost Unconventional Gas is Substituting for Higher Cost Conventional Lower Cost Unconventional Gas is Substituting for Higher Cost Conventional
Low Cost
Abundant Natural Gas
High Cost
Substitution
An American Treasure
50
20 Year Trend
50 40 Bcf per Day
Bcf per Day
40 30 20 10
Unconventional 0 1990
30 20 10
Conventional
0 1995
2000
Source: ARC Financial Corp., 2009
2005
1990
1995
2000
2005
8
Evidence of the Paradigm Shift in Domestic Natural Gas Resource Base Abundant Natural Gas An American Treasure
Source: Advance Resources International, 2009
9
Shale Has Changed Everything Continuing 20 year trend in Unconventional Gas Abundant Natural Gas An American Treasure
U.S. and Canada Shale Gas Plays
Horn River Montney
Deep BasinColorado Group
Cody
Utica
Gammon
Antrim
Bakken Baxter/Mancos Mancos
Mowry Niobrara Mulky Pierre
Woodford
New Albany Fayetteville
Marcellus/Ohio/Huron
Lewis Barnett/Woodford Floyd‐Neal Barnett Haynesville Eagle Ford
Many Shales Still “Un‐discovered”
Source: America’s Natural Gas Alliance, 2009
10
Canada and U.S. Natural Gas Future is Changing Abundant Natural Gas An American Treasure
Trillion Cubic Feet 9 (TCF)
Currently 11‐13% of total Canada and U.S. production is from shale Barclay’s estimate: 20‐30% by YE ’10 30‐40% by YE ‘12
8
Shale Gas Production
7 6 5 4 3 2 1
0 Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Antrim Fayetteville Pearsall
Source: America’s Natural Gas Alliance, 2009
New Albany Montney Horn River
Barnett Haynesville
Woodford Marcellus
11
Shale Gas Growth Represents A Paradigm Shift in Gas Markets L48 Production by Type 70 60 Dry Marketed (bcfd)
• What has changed? – Wide spread resource base that Abundant can be accessed with established Natural technologies—some cost uncertainty vs. exploration risk Gas – Bank of prospective plays set to An meet demand without exposing the market to spikes American – North America need not compete Treasure for expensive oil‐indexed LNG • What will look the same? – Boom and bust cycles in drilling still look likely; defined by cost pressures and timing – US breakeven costs remain high relative to stranded gas reserves, thus NA based liquefaction or gas‐ intensive industry can’t compete • Open Questions? – Can price differentials and infrastructure set up NGV demand? – Can this resource base help Source: Wood Mackenzie NAGS and Upstream Service support gas as a bridge fuel to meet aggressive carbon targets?
50 40 30 20 10 0 2000
2005 Conventional
2010 Tight Gas
2015 Shale
2020
2025
CBM
Shale Gas Developmental Breakevens
Breakeven @ 10% IRR $/mcf @ Local Marketing Hub Barnett 3.78‐6.60 Woodford 4.98‐5.76 Fayetteville 4.28‐5.21 Haynesville 3.90‐6.80 Marcellus 3.92‐5.28 Horn River 5.21‐6.75 Source: Wood Mackenzie
12
Shale Gas and Tight Gas to Dominate Future Production Push vs. Pull Abundant Natural Gas An American Treasure
Falls off Cost Curve
Tight Gas Shale Gas
On Cost Curve
• Continuation of 2005‐08 Production trend implies gas supply rises to 100 Bcfpd by 2016 (impossible) • For Demand & Price reasons such a trend will not continue but does demonstrate the “potential” gas production for future decades • Half of 75‐80 Bcfpd of potential drilling additions will be forced off of the cost curve
Source: Barclay’s Capital, Driscoll & Robertson, 2009; EIA
13
Colorado Natural Gas Proved Resources Abundant Growth in Supply Abundant Natural Gas
Tripled in Last Decade
An American Treasure Bcf
• • • •
pa = per annum
1997 – 2007 • Tite SS downspacing • Frac and Re‐Frac Technology • Higher Prices
21,851
1987 – 1997 Section 29 Tax Credits CBM Frac Technology Tite sands
Year
Source: EIA
14
Colorado Natural Gas Production Industry Has Delivered for the Consumer Abundant Natural Gas
6 Fold Growth since 1990 • CBM • Tite gas sands • Technology • Price
1,242,571
637,375
Mcf
An American Treasure
Doubled in last Decade
242,997
Year Source: EIA
15
Global Unconventional Gas Potential LNG LNG –– Supplement to Domestic Supply Abundant Natural Gas An American Treasure
World Total: 32,560 Tcf roughly 300 years of supply Source: MIT Energy Institute
16
Stable Outlook for Long Term Natural Gas Supply • Lower – 48 U.S. Supply, 100 +/‐ year supply Abundant Natural Gas An American Treasure
• Unconventional Resources o Tite Sandstone, Shale and CBM • Gulf of Mexico o Deep shelf and Deep water • Offshore Access (CA, FL etc.) o When U.S. politicians take energy as serious as China does
• Canadian Shales
•
Montney and Horn River
• Alaskan Natural Gas • 3 – 4 Bcfd; 10 years from “GO”
• LNG – pending Global Commodity • U.S./N.A. Capacity of 11‐14 Bcfd vs. current 1 +/‐ Bcfd imports 17
PART II Abundant Natural Gas An American Treasure
Technology Drivers for Recent and Future Natural Gas Supply
18
The Canada & U.S. Technology Renaissance Rapidly Increasing Production • Natural Gas production is growing due to horizontal Abundant Natural Gas
drilling and fracturing.
• Canada & USA production has grown at 9% for the past 3 years
An American Treasure
Bcf/d
~25 Tcf used in Canada & USA every year Projection
Actual
100
9% CAGR 80
60
40
20
0
2000 2002 2004 2006 2008 2010 2012 2014 2000 2002 2004 2006 2008 2010 2012 2014
Source: Encana
U.S. Conventional U.S. Unconventional
2016 2018 2020 2016 2018 2020
Canada Conventional Canada Unconventional
19
Barnett Shale Production Growth Abundant Natural Gas An American Treasure
Source: Range Resources
20
Reduction in Breakdown Costs Sets the Stage for Growth Abundant Natural Gas
Improvement In Fayetteville Breakevens 70
An American Treasure
1Q 2009
60
4Q 2007
% IRR
50
$5.50
40
4Q 2006
30
$8.00
20
Note: breakevens calculated at basin hub.
Note: breakevens calculated at Henry Hub.
10 3
4
5
Source: Modified from Wood Mackenzie Upstream Service 2009 Q1
6
7
$/m m btu 2007 Q4
8
9
10
2006 Q4
Source: Southwestern Energy
21
Marcellus Shale Efficiency Gains Abundant Natural Gas An American Treasure
Completion technique improvements: • 3 Fold Rise in IP’s, EURs and Recovery Factors in 2 years • D&C costs reduced by 30 – 50% Average Initial Potential ‐ MCFPD
EUR Calculated from Marcellus Type Curve
Apparent Recovery Factor on Average APC Well Spacing
Quarter
Wells Reported
3rd 2007
2
2,300
2,090
12.0%
4th 2007
4
3,450
3,134
17.9%
1st 2008
6
4,167
3,786
21.7%
2nd 2008
9
4,056
3,685
21.1%
3rd 2008
12
5,550
5,042
28.9%
4th 2008
7
6,771
6,152
35.2%
1st 2009
6
6,900
6,269
35.9%
3x
3+x
3x
Improvement Ratio Source: Jeffries, Randall & Dewey
22
Wattenberg Field Historical Production MMCFEPD by Formation Codell Trifrac 20 Acre Downspacing 318Ae Rule
Horizontal Tests Niobrara
Niobrara Recompletions Unconventional Reservoirs Codell
800
5 Spot Downspacing 318A Rule
Conventional Reservoirs D and J Sands
700
Codell Refrac
Conventional Reservoirs Sussex‐Shannon
600
Codell Niobrara J sand
500
Sussex Shannon D sand Other
400
300
200
100
Source: Noble Energy
Jan-08
Jan-06
Jan-04
Jan-02
Jan-00
Jan-98
Jan-96
Jan-94
Jan-92
Jan-90
Jan-88
Jan-86
Jan-84
Jan-82
Jan-80
Jan-78
Jan-76
Jan-74
0 Jan-72
An American Treasure
900
Jan-70
Abundant Natural Gas
Technology Drives Codell Niobrara Production from 50 to 500 mmcfed
23
PART III Abundant Natural Gas An American Treasure
Benefits of Natural Gas
24
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
Natural Gas
25
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
Natural Gas ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
26
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY • Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
Natural Gas ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
27
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY • Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
Natural Gas ENERGY SECURITY 100 + year Domestic Supply • 85% USA Produced • NGV’s can displace imported oil
ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
28
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY
CH4 = E3
• Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
National Treasure
Natural Gas ENERGY SECURITY 100 + year Domestic Supply • 85% USA Produced • NGV’s can displace imported oil
ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
29
An American Treasure
Coal power generation displaced by gas (GW capacity)
150
500
125
400
100 300 75 200
50
100
25
0 0
20
40
60
80
CO2 reduction (million tonnes per year)
Abundant Natural Gas
Additional volumes of gas consumed (bcm/year)
Substitution of Natural Gas for Coal ‐fired Power Generation Substitution of Natural Gas for Coal‐fired Power Generation Offers Most Timely and Significant CO2 Reductions
100
Source: IPIECA Report, Workshop Summary, Natural Gas as a Climate Change Solution, 09/2006, MIT Energy Initiative
30
U.S. Transportation Switch (for 25 Bcf/d of Natural Gas) (for 25 Bcf/d Current Fuel Mix (72 Bcfe/d)
Continental Oil 56%
An American Treasure
+25 Bcf/d Domestic Gas
OffContinent Oil 44%
Continental Oil 56%
2,000
80
1,500
60
1,000
40 20 0 CO2
GHGE
NO2
SO2
100
2,500 CO2E Emissions
100
NO2 / SO2 Emissions
CO2E Emissions
2,500
0
OffContinent Oil 9%
Emissions (Metric Tons)
Emissions (Metric Tons)
500
Natural Gas 35%
2,000
9% Reduction
1,500
80 60
9% Reduction
40
1,000 20% Reduction
500
34% Reduction
0
20
NO2 / SO2 Emissions
Abundant Natural Gas
Future Fuel Mix Vision
0 CO2
GHGE
NO2
SO2
130 MM tons of CO2 = 2% of US Total CO2 Emissions in 2008 Source: Encana
31
U.S. Electrical Generation Switch (for 25 Bcf/d of Natural Gas) (for 25 Bcf/d Future Fuel Mix Vision
Current Fuel Mix (107 Bcfe/d) Other Hydro 3% Gas 6% 17%
Other Hydro 4% 7%
+25 Bcf/d Domestic Gas
Nuclear 21%
An American Treasure
Nuclear 24%
Oil 1%
Oil 1%
Coal 52%
2,000
10
1,500 1,000
5
500
0
0 CO2
GHGE
NO2
SO2
20
3,000 CO2E Emissions
CO2E Emissions
15
NO2 / SO2 Emissions
20
2,500
Coal 16%
Emissions (Metric Tons)
Emissions (Metric Tons) 3,000
Gas 48%
2,500 2,000
40% Reduction
15
40% Reduction
1,500
55% Reduction
1,000
10 73% Reduction
500 0
5
NO2 / SO2 Emissions
Abundant Natural Gas
0 CO2
GHGE
NO2
SO2
975 MM tons of CO2 = 16% of US Total CO2 Emissions in 2008 Source: Encana
32
The Case for Timely Increase in Natural Gas‐Fired The Case for Timely Increase in Natural Gas‐Fired Power Generation in Colorado • Natural Gas is readily abundant in Colorado
Abundant Natural Gas An American Treasure
• Colorado Natural Gas reserves have more than tripled and production has doubled in last decade • Approximately 60% of Colorado Natural Gas is exported • Most (all) of Front Range coal is imported from Wyoming • A 60 – 75% reduction in CO2 is realized immediately by substituting gas‐fired for existing coal‐fired generation (per kilowatt hour) • Since only 29% of Colorado’s Natural Gas‐Fired Generation is utilized (2007), existing capacity exists with no further capital requirements • Colorado’s utilization of Coal‐Fired Generation by Utilities and IPPP (2007) is tapped out at 77% Summary: Meaningful capacity exists to immediately increase Natural Gas base load and immediately reduce significant CO2, NOX, SOX and Hg emissions 33
PART IV Abundant Natural Gas An American Treasure
Role of Natural Gas in a Sound & Balanced Energy Policy
34
Energy Consumption in 20th Century
An American Treasure
140
U.S. Energy Consumption (Quad BTU) Btu)
Abundant Natural Gas
120 100 80 60 40 20
0
1635 1735 1835 1890 1940 1957 1967
1977 1987 1997 2007 2017
Year Source: Rocky Mountain Institute, 2009
35
Abundant Natural Gas An American Treasure
World Population Billions
The Real Problem – Population Growth The Real Problem – 7 6 5 4 3 2 1 500 B.C.
A.D. 1
A.D. 500
A.D. 1000
A.D. 1500
A.D. 2000
When will Courageous Leaders in Colorado, America and World proclaim… “The State, Country and World is reaching (has reached) unsustainable population growth and is our #1 threat against Energy Sustainability, Climate Change and a Healthy Planet/Society? “Is anybody out there?” Data Source: Rocky Mountain Institute, 2009
36
Time is Right for Natural Gas Abundance Abundant Natural Gas An American Treasure
• 100 + year supply; Alaska; LNG
Clean • 60‐75% less CO2 than coal • Quickest, cheapest and most certain means to achieve GHG emission goals
Versatile • Power, heat, transportation, plastics, clothing, food • Easy to switch on and off (vs. coal) – more renewable compatible
Readily Available • 29% utilization rate; combine cycle plants quick and reasonable cost to build
Surface Efficient • Substantially less surface impact than equivalent BTU from wind and solar
Energy Security • Most reliable realistic way towards less energy dependence
Economy • 1.2 million jobs and $1 trillion industry
Climate change legislation • For fraction of cost of other options, Natural Gas could achieve 30% of W‐M CO2 goals *
Gas for Clunkers • 1 TCF per year of additional natural gas, retires 150 GWh of oldest dirtiest coal‐fired plants * * BP America Inc., September 24, 2009
37
Consideration of a Balanced Energy Plan Planning Matrix for Optimum Solutions Abundant Natural Gas An American Treasure
Criteria Abundance Scalability Domestic Reliability Intermittent Cost Greenhouse Gas Emissions Net Energy Transmission Systems Stability Surface Use per Energy Unit Availability Timing 1
> 10% Supply Now >10% Supply by 2020 >10% Supply by 2030 >10% Supply by 2050
Energy Source
Natural Gas
Geo Nuclear Hydro Biomass Thermal
Wind
Solar
Coal
Oil
High
Low‐Mod
Mod
High
High
Low
Low
Low
Low
High
Low‐Mod
Low
High
High
Possible
No
No
No
Yes
Yes
Yes
Yes
35%
Yes
Yes
Yes
Yes
High
Low
Low
High
High
High
Mod
No
Yes
No
Yes
Yes
No
No
No
Yes
?
No
Mod
High
High
Low
Mod
Mod
Low
High
Low
Low‐Mod
Low
Low
High
High
Low
Low
Mod
Low
High
Low
Low
Mod
Mod
High
High
‐
Mod
Yes
No
No
Yes
Yes
Yes
Yes
‐
Yes
High
Low
?
High
High
High
High
‐
‐
Low
High
High
Low
Low
Low
Mod
High
Low
Yes Yes Yes Yes
No ? ? Yes
No No No Possible
Yes Yes Yes Yes
Yes Yes Yes Yes
Yes Yes Yes Yes
No No No No
No No No No
No No No No
Our Leaders should include such a Planning Matrix in Energy Plan Decision Making and Communicate it to Americans (1) >10% Supply of Total U.S. Electric Power
38
Energy Sources and Diversified Human Uses Abundant Natural Gas An American Treasure
Energy Uses Electric Power Transportation Heating / Cooling Food/Fertilizer/Pesticides Plastics Clothing
Natural Gas
Wind & Solar
Oil
Coal
Nuclear
Hydro
Major Minor Major Major Major Major
Supplemental No No No No No
Minor Major Minor Major Major Major
Major No Major No No No
Minor No Minor No No No
Minor No Minor No No No
Natural Gas is an American Treasure since it plays a major role in Electric Power, Food AND many other Quality of Life Needs and Demands
39
Colorado Generation by Fuel Source Holy Cross Energy Suggestion Abundant Natural Gas
Non‐Emitting
An American Treasure
Natural Gas Coal To meet the Governor’s goal, load growth would need to be met with non‐emitting generation, and roughly half of coal generation would have to be replaced with 140 bcf natural gas. Source: Holy Cross Energy, 2009
40
A More Environmentally Sound Plan Proposed Colorado Electicity Energy Mix Proposed Colorado Electicity Energy Mix ‐‐ 2025 Abundant Natural Gas An American Treasure
Solar 5%
Hydro 1% Wind 15%
Coal 27%
Future Demand ? Colorado gains 1 million residents every 12 years Conservation, Energy Efficiency and Energy Waste Reduction Minimizes New Demand
Natural Gas 52%
41
Energy Policy Portfolio Design Please check your Political Agendas at the Security Desk Abundant Natural Gas An American Treasure
Layout Priorities of Energy Policy • Reliability for Quality of Life, Economic Growth and National Defense • Domestic Security and Trade Deficit Impacts; Decrease Energy Dependence • Greenhouse Gas Emissions Assess Criteria of Each Energy Source • Availability, timing, reliability, scalability, emissions, net energy costs etc. Design Realistic Energy Portfolio • % Contribution from each Energy Source for next 50 years • Factor in availability timing, technology, costs, transmission grid etc. Communicate FULL Energy Policy to People • Ask People to participate – Conservation and Energy Efficiency • Remove the Hypocrisy and Mis‐Alignments • Eliminate “Flavor of the Day” Energy Policy
Energy is too important to Domestic Security, Economy, Environment and Quality of Life for politicians to squander 42
Solutions to Colorado and U.S Electrical Energy Portfolio Abundant Natural Gas An American Treasure
Conservation ‐ Use Less Reduce Waste – Be Prudent Increase Energy Efficiency – Be Smarter Double Natural Gas – Abundant Domestic Clean Solution Reduce Coal by half Add Nuclear Increase Wind and Solar to Realistic Amount (15 – 20%) Technology Advances – Never Underestimate for ALL of Above
Leaders Need to Include ALL of Above in Energy Plan in Realistic Framework 43
OVERVIEW I. New Sources of Abundant Supply of Domestic Clean Burning Abundant Natural Gas An American Treasure
Natural Gas • Multi‐decade trend in growing U.S. Natural Gas Supply • Shale Gas provides renaissance in long term supply • 100+ year supply
II. Technology Drivers for Recent and Future Natural Gas Supply • • •
Multi‐decade trend of improvements Horizontal Drilling and Completion – catalyst for new supply Growth, Environmental Mitigation and Efficiencies
III. Benefits of Natural Gas •
Win‐Win‐Win for Economy, Environment and National Security
IV. Role of Natural Gas in a Sound & Balanced Energy Policy • •
Time is right for Natural Gas to play critical role in U.S. Energy Policy Balanced energy plan requires many criteria 1
PART I Abundant Natural Gas An American Treasure
New Sources of Abundant Supply of Domestic Clean Burning Natural Gas
2
Abundant Natural Gas Supply Media Coverage Abundant Natural Gas An American Treasure
The New York Times- Estimate Places Natural Gas Reserves 35% Higher (Reprinted in Financial Post and on Canada.com) Associated Press- Report: US natural gas reserves surge 35 percent (Reprinted in Chicago Tribune, Seattle Times, Anchorage Daily News, Charleston Daily Mail, The Kingston Whig-Standard, The Spokesman Review and on FoxNews.com and clarionledger.com)
The Wall Street Journal‐ U.S. Natural‐Gas Supplies Surge Bloomberg- Potential U.S. Natural Gas Reserves Rise 39 Percent (Reprinted in LA Times) Investor’s Business Daily Natural Gas Sits Out 2009 Rally As U.S. Reserves Hit New Highs Greenwire- Report of Abundant U.S. Natural Gas Supplies Rattles Energy Debate Wall Street Journal Environmental Capital Blog- Gas Glut: Why the U.S. Boom Could Mean Cheaper Gas Everywhere Fort Worth Star Telegram‐ Deposits of natural gas are at record level The Vancouver Sun- 'Opportunities are emerging,' EnCana says Tulsa World- Shale gas reserves are a target for Devon Energy Corp. Businesswire- T. Boone Pickens Statement on Surge in Estimated Natural Gas Reserves PR Newswire- Statement by the American Clean Skies Foundation Regarding PGC Report Confirming America's Abundant Supply of Clean-Burning Natural Gas The Motley Fool- The Good News on Natural Gas The National (UAE)- Gas Market is Facing a New World Order The New American Magazine- Estimate of Natural-gas Reserves Jumps 35 Percent The Hill Pundits Blog- Pain at the Pump Oil & Gas Journal- Growing shale activity sends potential US gas resources to new peak Gas Daily- Shale gas pushes US resource base to 1,836 Tcf Financial Post Alberta to offer natural gas producers incentives
“We’re drowning in it (Natural Gas)”, Robert Hefner on NPR 3
U.S. Dry Natural Gas Proved Reserves U.S. Dry Natural Gas Proved Reserves
at 30 Year High Abundant Natural Gas
New Technologies, skilled workforce and exploration continually increase and fully replace reserves and gas consumed over last 40 years Cumulative Natural Gas Production 1978‐2006 485 tcf
An American Treasure
1978 EIA’s first proved reserves report 207 tcf
2007 Report: 238 tcf 2007 is 47% higher than 1993 low of 162 tcf
30 Year High
Source: DOE/EIA – 0216(2007) Advance Summary; MIT Energy Initiative, 2009
4
U.S. Production Grew by 4 Bcfd in 2008 U.S. Production Grew by 4 Bcfd Driven by Shale Gas and Tite SS Gas Driven by Shale Gas and Tite Abundant Natural Gas
Units = Bcfd
2007 2008 9.7 11.0
An American Treasure
Rockies
2.9 2.9
Bal of US 2.0
3.9 3.7
Paradox & San Juan 10.2 10.4
Anadarko & Permian
Source: BENTEK Energy, LLC
57.4
61.4
2.2
Appalachia 11.8
14.9
SE Sup Area
16.8 16.2
GOM & Gulf Coast
US Total
Production growth would have been approx 5 Bcfd without disruption of Hurricane’s Gustav and Ike or nearly 10% YOY!
5
U.S. Potential and Proved Reserves Summary Potential Gas Committee Report, 2008 Abundant Natural Gas An American Treasure
Traditional: Coalbed: Total Potential Gas Resources: Proved Reserves:
1673.4 Tcf 163.0 Tcf 1836.4 Tcf 237.7 Tcf *
Future Gas Supply TOTAL:
2074.1 Tcf
100+/‐ year supply Source: Potential Gas Committee, 12/2008, MIT Energy Initiative
*EIA 2007 6
U.S. Potential and Proved Reserves (TCF) Geographic Distribution Abundant Natural Gas An American Treasure
Pacific
Rocky Mountain
North Central
51.3
374.4
24.0
2.6
51.9
16.6
Mid‐ Continent
353.5 17.3
274.9 Alaska
7.5
Gulf Coast 455.2
193.8 57.0
3.4 Source: MIT Energy Initiative, 2009
Atlantic
*EIA 2007
Traditional gas Coalbed gas 7
Grabbing Market Share Lower Cost Unconventional Gas is Substituting for Higher Cost Conventional Lower Cost Unconventional Gas is Substituting for Higher Cost Conventional
Low Cost
Abundant Natural Gas
High Cost
Substitution
An American Treasure
50
20 Year Trend
50 40 Bcf per Day
Bcf per Day
40 30 20 10
Unconventional 0 1990
30 20 10
Conventional
0 1995
2000
Source: ARC Financial Corp., 2009
2005
1990
1995
2000
2005
8
Evidence of the Paradigm Shift in Domestic Natural Gas Resource Base Abundant Natural Gas An American Treasure
Source: Advance Resources International, 2009
9
Shale Has Changed Everything Continuing 20 year trend in Unconventional Gas Abundant Natural Gas An American Treasure
U.S. and Canada Shale Gas Plays
Horn River Montney
Deep BasinColorado Group
Cody
Utica
Gammon
Antrim
Bakken Baxter/Mancos Mancos
Mowry Niobrara Mulky Pierre
Woodford
New Albany Fayetteville
Marcellus/Ohio/Huron
Lewis Barnett/Woodford Floyd‐Neal Barnett Haynesville Eagle Ford
Many Shales Still “Un‐discovered”
Source: America’s Natural Gas Alliance, 2009
10
Canada and U.S. Natural Gas Future is Changing Abundant Natural Gas An American Treasure
Trillion Cubic Feet 9 (TCF)
Currently 11‐13% of total Canada and U.S. production is from shale Barclay’s estimate: 20‐30% by YE ’10 30‐40% by YE ‘12
8
Shale Gas Production
7 6 5 4 3 2 1
0 Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Antrim Fayetteville Pearsall
Source: America’s Natural Gas Alliance, 2009
New Albany Montney Horn River
Barnett Haynesville
Woodford Marcellus
11
Shale Gas Growth Represents A Paradigm Shift in Gas Markets L48 Production by Type 70 60 Dry Marketed (bcfd)
• What has changed? – Wide spread resource base that Abundant can be accessed with established Natural technologies—some cost uncertainty vs. exploration risk Gas – Bank of prospective plays set to An meet demand without exposing the market to spikes American – North America need not compete Treasure for expensive oil‐indexed LNG • What will look the same? – Boom and bust cycles in drilling still look likely; defined by cost pressures and timing – US breakeven costs remain high relative to stranded gas reserves, thus NA based liquefaction or gas‐ intensive industry can’t compete • Open Questions? – Can price differentials and infrastructure set up NGV demand? – Can this resource base help Source: Wood Mackenzie NAGS and Upstream Service support gas as a bridge fuel to meet aggressive carbon targets?
50 40 30 20 10 0 2000
2005 Conventional
2010 Tight Gas
2015 Shale
2020
2025
CBM
Shale Gas Developmental Breakevens
Breakeven @ 10% IRR $/mcf @ Local Marketing Hub Barnett 3.78‐6.60 Woodford 4.98‐5.76 Fayetteville 4.28‐5.21 Haynesville 3.90‐6.80 Marcellus 3.92‐5.28 Horn River 5.21‐6.75 Source: Wood Mackenzie
12
Shale Gas and Tight Gas to Dominate Future Production Push vs. Pull Abundant Natural Gas An American Treasure
Falls off Cost Curve
Tight Gas Shale Gas
On Cost Curve
• Continuation of 2005‐08 Production trend implies gas supply rises to 100 Bcfpd by 2016 (impossible) • For Demand & Price reasons such a trend will not continue but does demonstrate the “potential” gas production for future decades • Half of 75‐80 Bcfpd of potential drilling additions will be forced off of the cost curve
Source: Barclay’s Capital, Driscoll & Robertson, 2009; EIA
13
Colorado Natural Gas Proved Resources Abundant Growth in Supply Abundant Natural Gas
Tripled in Last Decade
An American Treasure Bcf
• • • •
pa = per annum
1997 – 2007 • Tite SS downspacing • Frac and Re‐Frac Technology • Higher Prices
21,851
1987 – 1997 Section 29 Tax Credits CBM Frac Technology Tite sands
Year
Source: EIA
14
Colorado Natural Gas Production Industry Has Delivered for the Consumer Abundant Natural Gas
6 Fold Growth since 1990 • CBM • Tite gas sands • Technology • Price
1,242,571
637,375
Mcf
An American Treasure
Doubled in last Decade
242,997
Year Source: EIA
15
Global Unconventional Gas Potential LNG LNG –– Supplement to Domestic Supply Abundant Natural Gas An American Treasure
World Total: 32,560 Tcf roughly 300 years of supply Source: MIT Energy Institute
16
Stable Outlook for Long Term Natural Gas Supply • Lower – 48 U.S. Supply, 100 +/‐ year supply Abundant Natural Gas An American Treasure
• Unconventional Resources o Tite Sandstone, Shale and CBM • Gulf of Mexico o Deep shelf and Deep water • Offshore Access (CA, FL etc.) o When U.S. politicians take energy as serious as China does
• Canadian Shales
•
Montney and Horn River
• Alaskan Natural Gas • 3 – 4 Bcfd; 10 years from “GO”
• LNG – pending Global Commodity • U.S./N.A. Capacity of 11‐14 Bcfd vs. current 1 +/‐ Bcfd imports 17
PART II Abundant Natural Gas An American Treasure
Technology Drivers for Recent and Future Natural Gas Supply
18
The Canada & U.S. Technology Renaissance Rapidly Increasing Production • Natural Gas production is growing due to horizontal Abundant Natural Gas
drilling and fracturing.
• Canada & USA production has grown at 9% for the past 3 years
An American Treasure
Bcf/d
~25 Tcf used in Canada & USA every year Projection
Actual
100
9% CAGR 80
60
40
20
0
2000 2002 2004 2006 2008 2010 2012 2014 2000 2002 2004 2006 2008 2010 2012 2014
Source: Encana
U.S. Conventional U.S. Unconventional
2016 2018 2020 2016 2018 2020
Canada Conventional Canada Unconventional
19
Barnett Shale Production Growth Abundant Natural Gas An American Treasure
Source: Range Resources
20
Reduction in Breakdown Costs Sets the Stage for Growth Abundant Natural Gas
Improvement In Fayetteville Breakevens 70
An American Treasure
1Q 2009
60
4Q 2007
% IRR
50
$5.50
40
4Q 2006
30
$8.00
20
Note: breakevens calculated at basin hub.
Note: breakevens calculated at Henry Hub.
10 3
4
5
Source: Modified from Wood Mackenzie Upstream Service 2009 Q1
6
7
$/m m btu 2007 Q4
8
9
10
2006 Q4
Source: Southwestern Energy
21
Marcellus Shale Efficiency Gains Abundant Natural Gas An American Treasure
Completion technique improvements: • 3 Fold Rise in IP’s, EURs and Recovery Factors in 2 years • D&C costs reduced by 30 – 50% Average Initial Potential ‐ MCFPD
EUR Calculated from Marcellus Type Curve
Apparent Recovery Factor on Average APC Well Spacing
Quarter
Wells Reported
3rd 2007
2
2,300
2,090
12.0%
4th 2007
4
3,450
3,134
17.9%
1st 2008
6
4,167
3,786
21.7%
2nd 2008
9
4,056
3,685
21.1%
3rd 2008
12
5,550
5,042
28.9%
4th 2008
7
6,771
6,152
35.2%
1st 2009
6
6,900
6,269
35.9%
3x
3+x
3x
Improvement Ratio Source: Jeffries, Randall & Dewey
22
Wattenberg Field Historical Production MMCFEPD by Formation Codell Trifrac 20 Acre Downspacing 318Ae Rule
Horizontal Tests Niobrara
Niobrara Recompletions Unconventional Reservoirs Codell
800
5 Spot Downspacing 318A Rule
Conventional Reservoirs D and J Sands
700
Codell Refrac
Conventional Reservoirs Sussex‐Shannon
600
Codell Niobrara J sand
500
Sussex Shannon D sand Other
400
300
200
100
Source: Noble Energy
Jan-08
Jan-06
Jan-04
Jan-02
Jan-00
Jan-98
Jan-96
Jan-94
Jan-92
Jan-90
Jan-88
Jan-86
Jan-84
Jan-82
Jan-80
Jan-78
Jan-76
Jan-74
0 Jan-72
An American Treasure
900
Jan-70
Abundant Natural Gas
Technology Drives Codell Niobrara Production from 50 to 500 mmcfed
23
PART III Abundant Natural Gas An American Treasure
Benefits of Natural Gas
24
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
Natural Gas
25
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
Natural Gas ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
26
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY • Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
Natural Gas ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
27
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY • Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
Natural Gas ENERGY SECURITY 100 + year Domestic Supply • 85% USA Produced • NGV’s can displace imported oil
ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
28
Natural Gas: Common Thread of Economy, Environment and Energy Security Abundant Natural Gas An American Treasure
ECONOMY
CH4 = E3
• Employs > 1,200,000 Americans • $30 billion in Royalties • $1 trillion value added in 2007 (7.5% of GDP) • $23 billion benefit to Colorado in 2007
National Treasure
Natural Gas ENERGY SECURITY 100 + year Domestic Supply • 85% USA Produced • NGV’s can displace imported oil
ENVIRONMENT • Natural Gas 60‐75% cleaner than coal • Immediate GHG reductions • Fleece to enjoy outdoors
29
An American Treasure
Coal power generation displaced by gas (GW capacity)
150
500
125
400
100 300 75 200
50
100
25
0 0
20
40
60
80
CO2 reduction (million tonnes per year)
Abundant Natural Gas
Additional volumes of gas consumed (bcm/year)
Substitution of Natural Gas for Coal ‐fired Power Generation Substitution of Natural Gas for Coal‐fired Power Generation Offers Most Timely and Significant CO2 Reductions
100
Source: IPIECA Report, Workshop Summary, Natural Gas as a Climate Change Solution, 09/2006, MIT Energy Initiative
30
U.S. Transportation Switch (for 25 Bcf/d of Natural Gas) (for 25 Bcf/d Current Fuel Mix (72 Bcfe/d)
Continental Oil 56%
An American Treasure
+25 Bcf/d Domestic Gas
OffContinent Oil 44%
Continental Oil 56%
2,000
80
1,500
60
1,000
40 20 0 CO2
GHGE
NO2
SO2
100
2,500 CO2E Emissions
100
NO2 / SO2 Emissions
CO2E Emissions
2,500
0
OffContinent Oil 9%
Emissions (Metric Tons)
Emissions (Metric Tons)
500
Natural Gas 35%
2,000
9% Reduction
1,500
80 60
9% Reduction
40
1,000 20% Reduction
500
34% Reduction
0
20
NO2 / SO2 Emissions
Abundant Natural Gas
Future Fuel Mix Vision
0 CO2
GHGE
NO2
SO2
130 MM tons of CO2 = 2% of US Total CO2 Emissions in 2008 Source: Encana
31
U.S. Electrical Generation Switch (for 25 Bcf/d of Natural Gas) (for 25 Bcf/d Future Fuel Mix Vision
Current Fuel Mix (107 Bcfe/d) Other Hydro 3% Gas 6% 17%
Other Hydro 4% 7%
+25 Bcf/d Domestic Gas
Nuclear 21%
An American Treasure
Nuclear 24%
Oil 1%
Oil 1%
Coal 52%
2,000
10
1,500 1,000
5
500
0
0 CO2
GHGE
NO2
SO2
20
3,000 CO2E Emissions
CO2E Emissions
15
NO2 / SO2 Emissions
20
2,500
Coal 16%
Emissions (Metric Tons)
Emissions (Metric Tons) 3,000
Gas 48%
2,500 2,000
40% Reduction
15
40% Reduction
1,500
55% Reduction
1,000
10 73% Reduction
500 0
5
NO2 / SO2 Emissions
Abundant Natural Gas
0 CO2
GHGE
NO2
SO2
975 MM tons of CO2 = 16% of US Total CO2 Emissions in 2008 Source: Encana
32
The Case for Timely Increase in Natural Gas‐Fired The Case for Timely Increase in Natural Gas‐Fired Power Generation in Colorado • Natural Gas is readily abundant in Colorado
Abundant Natural Gas An American Treasure
• Colorado Natural Gas reserves have more than tripled and production has doubled in last decade • Approximately 60% of Colorado Natural Gas is exported • Most (all) of Front Range coal is imported from Wyoming • A 60 – 75% reduction in CO2 is realized immediately by substituting gas‐fired for existing coal‐fired generation (per kilowatt hour) • Since only 29% of Colorado’s Natural Gas‐Fired Generation is utilized (2007), existing capacity exists with no further capital requirements • Colorado’s utilization of Coal‐Fired Generation by Utilities and IPPP (2007) is tapped out at 77% Summary: Meaningful capacity exists to immediately increase Natural Gas base load and immediately reduce significant CO2, NOX, SOX and Hg emissions 33
PART IV Abundant Natural Gas An American Treasure
Role of Natural Gas in a Sound & Balanced Energy Policy
34
Energy Consumption in 20th Century
An American Treasure
140
U.S. Energy Consumption (Quad BTU) Btu)
Abundant Natural Gas
120 100 80 60 40 20
0
1635 1735 1835 1890 1940 1957 1967
1977 1987 1997 2007 2017
Year Source: Rocky Mountain Institute, 2009
35
Abundant Natural Gas An American Treasure
World Population Billions
The Real Problem – Population Growth The Real Problem – 7 6 5 4 3 2 1 500 B.C.
A.D. 1
A.D. 500
A.D. 1000
A.D. 1500
A.D. 2000
When will Courageous Leaders in Colorado, America and World proclaim… “The State, Country and World is reaching (has reached) unsustainable population growth and is our #1 threat against Energy Sustainability, Climate Change and a Healthy Planet/Society? “Is anybody out there?” Data Source: Rocky Mountain Institute, 2009
36
Time is Right for Natural Gas Abundance Abundant Natural Gas An American Treasure
• 100 + year supply; Alaska; LNG
Clean • 60‐75% less CO2 than coal • Quickest, cheapest and most certain means to achieve GHG emission goals
Versatile • Power, heat, transportation, plastics, clothing, food • Easy to switch on and off (vs. coal) – more renewable compatible
Readily Available • 29% utilization rate; combine cycle plants quick and reasonable cost to build
Surface Efficient • Substantially less surface impact than equivalent BTU from wind and solar
Energy Security • Most reliable realistic way towards less energy dependence
Economy • 1.2 million jobs and $1 trillion industry
Climate change legislation • For fraction of cost of other options, Natural Gas could achieve 30% of W‐M CO2 goals *
Gas for Clunkers • 1 TCF per year of additional natural gas, retires 150 GWh of oldest dirtiest coal‐fired plants * * BP America Inc., September 24, 2009
37
Consideration of a Balanced Energy Plan Planning Matrix for Optimum Solutions Abundant Natural Gas An American Treasure
Criteria Abundance Scalability Domestic Reliability Intermittent Cost Greenhouse Gas Emissions Net Energy Transmission Systems Stability Surface Use per Energy Unit Availability Timing 1
> 10% Supply Now >10% Supply by 2020 >10% Supply by 2030 >10% Supply by 2050
Energy Source
Natural Gas
Geo Nuclear Hydro Biomass Thermal
Wind
Solar
Coal
Oil
High
Low‐Mod
Mod
High
High
Low
Low
Low
Low
High
Low‐Mod
Low
High
High
Possible
No
No
No
Yes
Yes
Yes
Yes
35%
Yes
Yes
Yes
Yes
High
Low
Low
High
High
High
Mod
No
Yes
No
Yes
Yes
No
No
No
Yes
?
No
Mod
High
High
Low
Mod
Mod
Low
High
Low
Low‐Mod
Low
Low
High
High
Low
Low
Mod
Low
High
Low
Low
Mod
Mod
High
High
‐
Mod
Yes
No
No
Yes
Yes
Yes
Yes
‐
Yes
High
Low
?
High
High
High
High
‐
‐
Low
High
High
Low
Low
Low
Mod
High
Low
Yes Yes Yes Yes
No ? ? Yes
No No No Possible
Yes Yes Yes Yes
Yes Yes Yes Yes
Yes Yes Yes Yes
No No No No
No No No No
No No No No
Our Leaders should include such a Planning Matrix in Energy Plan Decision Making and Communicate it to Americans (1) >10% Supply of Total U.S. Electric Power
38
Energy Sources and Diversified Human Uses Abundant Natural Gas An American Treasure
Energy Uses Electric Power Transportation Heating / Cooling Food/Fertilizer/Pesticides Plastics Clothing
Natural Gas
Wind & Solar
Oil
Coal
Nuclear
Hydro
Major Minor Major Major Major Major
Supplemental No No No No No
Minor Major Minor Major Major Major
Major No Major No No No
Minor No Minor No No No
Minor No Minor No No No
Natural Gas is an American Treasure since it plays a major role in Electric Power, Food AND many other Quality of Life Needs and Demands
39
Colorado Generation by Fuel Source Holy Cross Energy Suggestion Abundant Natural Gas
Non‐Emitting
An American Treasure
Natural Gas Coal To meet the Governor’s goal, load growth would need to be met with non‐emitting generation, and roughly half of coal generation would have to be replaced with 140 bcf natural gas. Source: Holy Cross Energy, 2009
40
A More Environmentally Sound Plan Proposed Colorado Electicity Energy Mix Proposed Colorado Electicity Energy Mix ‐‐ 2025 Abundant Natural Gas An American Treasure
Solar 5%
Hydro 1% Wind 15%
Coal 27%
Future Demand ? Colorado gains 1 million residents every 12 years Conservation, Energy Efficiency and Energy Waste Reduction Minimizes New Demand
Natural Gas 52%
41
Energy Policy Portfolio Design Please check your Political Agendas at the Security Desk Abundant Natural Gas An American Treasure
Layout Priorities of Energy Policy • Reliability for Quality of Life, Economic Growth and National Defense • Domestic Security and Trade Deficit Impacts; Decrease Energy Dependence • Greenhouse Gas Emissions Assess Criteria of Each Energy Source • Availability, timing, reliability, scalability, emissions, net energy costs etc. Design Realistic Energy Portfolio • % Contribution from each Energy Source for next 50 years • Factor in availability timing, technology, costs, transmission grid etc. Communicate FULL Energy Policy to People • Ask People to participate – Conservation and Energy Efficiency • Remove the Hypocrisy and Mis‐Alignments • Eliminate “Flavor of the Day” Energy Policy
Energy is too important to Domestic Security, Economy, Environment and Quality of Life for politicians to squander 42
Solutions to Colorado and U.S Electrical Energy Portfolio Abundant Natural Gas An American Treasure
Conservation ‐ Use Less Reduce Waste – Be Prudent Increase Energy Efficiency – Be Smarter Double Natural Gas – Abundant Domestic Clean Solution Reduce Coal by half Add Nuclear Increase Wind and Solar to Realistic Amount (15 – 20%) Technology Advances – Never Underestimate for ALL of Above
Leaders Need to Include ALL of Above in Energy Plan in Realistic Framework 43
