California Crude Oil California Crude Oil Import & Infrastructure Forecast
DOCKET 11-IEP-1L
California Crude Oil Import & Infrastructure Forecast
DATE RECD. Sept 08 2011
Transportation Committee Workshop Transportation Energy Forecasts and Analyses for the 2011 Integrated Energy Policy Report Sacramento, California September 9, 2011 Ryan Eggers Fuels and Transportation Division California Energy Commission
3,500 3,000 2,500 2,000 1,500 1 000 1,000 500
California
Alaska
Rest of U.S.
Gulf Coast OCS
North Dakota
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
0 1981
Millions of Barrels s Per Yea ar
United States Crude Oil Production 1981 to 2010
Texas
Source: Source: California Division of Oil, Gas, and Geothermal Resources, Alaska Department of Revenue, and EIA 9/9/2011
2
450 400 350 300 250 200 150 100 50 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Millions s of Barrells Per Yea ar
California Crude Oil Production 1981 to 2010
Federal OCS
State Waters
Onshore
Source: Source: California Division of Oil, Gas, and Geothermal Resources 9/9/2011
3
California Crude Oil Production 1876-2010 Millions o of Barrels s Per Yearr
450 Peaked in 1985 at 424 Million Barrels
400 350 300 250
Cumulative Crude Oil Production 28.67 Billion Barrels, Equivalent to 10.5 Months of 2011 Global Demand of 89.36 Million Barrels Per Day
200 150 100 50
Source: California Division of Oil, Gas, and Geothermal Resources and California Energy Commission 9/9/2011
4
2009 2
2002 2
1995 1
1988 1
1981 1
1974 1
1967 1
1960 1
1953 1
1946 1
1939 1
1932 1
1925 1
1918 1
1911
1904 1
1897 1
1890 1
1883 1
1876 1
0
Crude Oil Production Trends • Global crude oil production 2010 averaged roughly 86.1 million barrels per day. • 2010 U.S. crude oil production was roughly 2 billion barrels or 5.51 million barrels per day. • CA crude oil production in 2010 was 223.92 million barrels or 613 thousand barrels per day. day • California crude oil production is expected to continue to decline, despite higher prices and increases in drilling activity. • U.S. domestic oil production has increased the last two years, but staff believes increased imports of crude oil from foreign sources will be necessary to meet domestic demand. 9/9/2011
5
450 400 350 300 250 200 150 100 50 0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Millions off Barrels Per Year M
California Crude Oil Imports 1982 to 2010
Alaska
Foreign
Source: Annual crude oil supply data from the PIIRA database 9/9/2011
6
California Crude Oil Imports – Historical Trends • Total imports of crude oil have increased by 13% between 2000 and 2010, at an annual rate of 1.2%. • Imports p of Alaska crude oil declined a total of 47% between 2000 and 2010, at an annual rate of 6.2%. • Foreign crude oil has substituted for lower CA and Alaskan production d ti – 71% increase between 2000 and 2010, at an annual rate of 5.5% – Foreign imports peaked in 2008 at 318 million barrels – In 2010, foreign imports totaled 289 million barrels 9/9/2011
7
Crude Oil Import Forecast – Approach Refinery Distillation Capacity Forecast
Crude Oil Import Forecast
Infrastructure Requirement
California Crude Oil Production Forecast
9/9/2011
8
California Refinery Utilization Rates 2000 - 2010 94% 92% 90% 87.6% 89.8%
88% 86% 84% 82%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: EIA, PIIRA Database, and California Energy Commission analysis 9/9/2011
9
California Crude Oil Production Forecast 2011-2030 400 350
Low Production Decline Rate -2.2 Percent Per Year 2009 through g 2010 Change g
300 250 200 150 100
High Production Decline Rate -3.1 Percent Per Year 2000 through 2010 Average
50 0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Millions o M of Barrels Per Year
450
Historical sto ca C CA C Crude ude O Oil Production oduct o
High g Decline ec e Rate ate
Low o Decline ec e Rate ate
Source: California Energy Commission 9/9/2011
10
California Crude Oil Imports – High Forecast 900 800 Million ns of Barrrels
700 600 500
Refinery Input
2010 imports = 376 million barrels
400 300 200 100
2020 imports = 436 million barrels
2030 imports = 480 million barrels
California Sourced Crude Oil Historical
Projected
1986 1988 1990 1992 1994 1996 1998 2000 2 2002 2 2004 2 2006 2 2008 2 2010 2 2012 2 2014 2 2016 2 2018 2 2020 2 2022 2 2024 2 2026 2 2028 2 2030 2
0
Source: California Energy Commission 9/9/2011
11
California Crude Oil Imports – Low Forecast 900
Million ns of Barrrels
800 700 600 500
Refinery Input
2010 imports = 376 million barrels
400 300 200 100
2020 imports = 390 million barrels
2030 imports = 398 million barrels
California Sourced Crude Oil Historical
Projected
1986 1988 1990 1992 1994 1996 1998 2000 2 2002 2 2004 2 2006 2 2008 2 2010 2 2012 2 2014 2 2016 2 2018 2 2020 2 2022 2 2024 2 2026 2 2028 2 2030 2
0
Source: California Energy Commission 9/9/2011
12
California Crude Oil Imports – Forecast • Crude d oil il imports i are projected j d to increase i in i California lif i due d to: – Continuing decline of California crude oil production • The lower estimate for increased crude oil imports assumes that crude oil production declines by 2.2% per year and an annual reduction of 0.5% in refinery capacity. • The larger estimate for incremental crude oil imports assumes that crude oil production declines by 3.2% per year and no increases in refinery capacity. capacity
9/9/2011
13
Incremental Crude Oil Tanker Visits 160 140 2.0 120 100
1.5
80 10 1.0
60 40
0.5 20 0.0
0 2015 2015
2020 2020
2030 2030
Source: California Energy Commission 9/9/2011
14
Additio onal Crude Tan nker Visits
2.5 Crrude Tanker C Cargo Size (Milllion Barrels)
• Both High and Low projection result in increased tanker visits. • Staff is projecting 12 to 149 additional tanker visits to California by 2030. • High variability in the number of visits is due to storage capacity differences between VLCC and Aframax tankers, k as well ll as import i differences between projections.
Crude Oil Storage Capacity • Storage g capacity p y forecasts are dependent p on cycling y g rates: – The higher cycling rate assumes a rate of 1 million barrels of storage per 23 million barrels of import – The lower cycling rate assumes a rate of 1 million barrels of storage per 12 million barrels of import
• Staff forecasts additional storage tank capacity requirements in the range off 0.6 0 6 to t 5 million illi barrels b l by b 2020, 2020 andd 1 to t 8.6 8 6 million illi barrels by 2030. • Staff estimates the 60% % of this storage g will need to be built in Southern California. • The Low Case projection could be accommodated by existing i f infrastructure, barring b i any storage facility f ili closures. l 9/9/2011
15
Sources of Uncertainty in the Forecasts • Can technological advances and/or expanded access to offshore reserves slow or halt the decline in Californian crude oil production? •
For example: California shale oil reserves estimated at 15.42 billion gallons
• Will new crude oil import facilities be completed in time to maintain an adequate supply of crude oil to California California’ss refineries?
9/9/2011
16
Federal OCS Drilling Scenario • An estimated 5.8 to 15.8 billion barrels of Undiscovered Technically Recoverable Resources (UTRR) crude oil exist off the shore of California, over half in federal OCS. • Mineral Mi lM Managementt S Services i (MMS) estimate ti t th thatt 53% to t 78% off those resources are economically recoverable based on crude oil prices between $60 to $160 per barrel. • Possible constraints to moving forward: – Macondo crude oil spill in the Gulf of Mexico – New infrastructure required to develop these areas
9/9/2011
17
OCS Crude Oil Production Forecast No Moratoria 3
DOE Forecast O
Millions of Barrels Pe er Day
2.5
2
1.5
Atlantic Pacific (California) Gulf of Mexico ‐ Deep Water Gulf of Mexico ‐ Shallow Water
1
0.5
Source: United States Department of Energy
9/9/2011
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
• DOE estimates new production associated with the moratoria areas to begin 2015. • 74% of this increased production is forecasted to originate from the California OCS area. • This increased production has the potential of reducing crude oil imports to levels below 2011 totals under both cases cases. 18
Questions and Comments Q
Ryan Eggers Energy Commission Specialist I Fossil Fuels Office California Energy Commission (916) 651-2920 [email protected] 8/31/2011
19
California Crude Oil Import & Infrastructure Forecast
DATE RECD. Sept 08 2011
Transportation Committee Workshop Transportation Energy Forecasts and Analyses for the 2011 Integrated Energy Policy Report Sacramento, California September 9, 2011 Ryan Eggers Fuels and Transportation Division California Energy Commission
3,500 3,000 2,500 2,000 1,500 1 000 1,000 500
California
Alaska
Rest of U.S.
Gulf Coast OCS
North Dakota
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
0 1981
Millions of Barrels s Per Yea ar
United States Crude Oil Production 1981 to 2010
Texas
Source: Source: California Division of Oil, Gas, and Geothermal Resources, Alaska Department of Revenue, and EIA 9/9/2011
2
450 400 350 300 250 200 150 100 50 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Millions s of Barrells Per Yea ar
California Crude Oil Production 1981 to 2010
Federal OCS
State Waters
Onshore
Source: Source: California Division of Oil, Gas, and Geothermal Resources 9/9/2011
3
California Crude Oil Production 1876-2010 Millions o of Barrels s Per Yearr
450 Peaked in 1985 at 424 Million Barrels
400 350 300 250
Cumulative Crude Oil Production 28.67 Billion Barrels, Equivalent to 10.5 Months of 2011 Global Demand of 89.36 Million Barrels Per Day
200 150 100 50
Source: California Division of Oil, Gas, and Geothermal Resources and California Energy Commission 9/9/2011
4
2009 2
2002 2
1995 1
1988 1
1981 1
1974 1
1967 1
1960 1
1953 1
1946 1
1939 1
1932 1
1925 1
1918 1
1911
1904 1
1897 1
1890 1
1883 1
1876 1
0
Crude Oil Production Trends • Global crude oil production 2010 averaged roughly 86.1 million barrels per day. • 2010 U.S. crude oil production was roughly 2 billion barrels or 5.51 million barrels per day. • CA crude oil production in 2010 was 223.92 million barrels or 613 thousand barrels per day. day • California crude oil production is expected to continue to decline, despite higher prices and increases in drilling activity. • U.S. domestic oil production has increased the last two years, but staff believes increased imports of crude oil from foreign sources will be necessary to meet domestic demand. 9/9/2011
5
450 400 350 300 250 200 150 100 50 0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Millions off Barrels Per Year M
California Crude Oil Imports 1982 to 2010
Alaska
Foreign
Source: Annual crude oil supply data from the PIIRA database 9/9/2011
6
California Crude Oil Imports – Historical Trends • Total imports of crude oil have increased by 13% between 2000 and 2010, at an annual rate of 1.2%. • Imports p of Alaska crude oil declined a total of 47% between 2000 and 2010, at an annual rate of 6.2%. • Foreign crude oil has substituted for lower CA and Alaskan production d ti – 71% increase between 2000 and 2010, at an annual rate of 5.5% – Foreign imports peaked in 2008 at 318 million barrels – In 2010, foreign imports totaled 289 million barrels 9/9/2011
7
Crude Oil Import Forecast – Approach Refinery Distillation Capacity Forecast
Crude Oil Import Forecast
Infrastructure Requirement
California Crude Oil Production Forecast
9/9/2011
8
California Refinery Utilization Rates 2000 - 2010 94% 92% 90% 87.6% 89.8%
88% 86% 84% 82%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: EIA, PIIRA Database, and California Energy Commission analysis 9/9/2011
9
California Crude Oil Production Forecast 2011-2030 400 350
Low Production Decline Rate -2.2 Percent Per Year 2009 through g 2010 Change g
300 250 200 150 100
High Production Decline Rate -3.1 Percent Per Year 2000 through 2010 Average
50 0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Millions o M of Barrels Per Year
450
Historical sto ca C CA C Crude ude O Oil Production oduct o
High g Decline ec e Rate ate
Low o Decline ec e Rate ate
Source: California Energy Commission 9/9/2011
10
California Crude Oil Imports – High Forecast 900 800 Million ns of Barrrels
700 600 500
Refinery Input
2010 imports = 376 million barrels
400 300 200 100
2020 imports = 436 million barrels
2030 imports = 480 million barrels
California Sourced Crude Oil Historical
Projected
1986 1988 1990 1992 1994 1996 1998 2000 2 2002 2 2004 2 2006 2 2008 2 2010 2 2012 2 2014 2 2016 2 2018 2 2020 2 2022 2 2024 2 2026 2 2028 2 2030 2
0
Source: California Energy Commission 9/9/2011
11
California Crude Oil Imports – Low Forecast 900
Million ns of Barrrels
800 700 600 500
Refinery Input
2010 imports = 376 million barrels
400 300 200 100
2020 imports = 390 million barrels
2030 imports = 398 million barrels
California Sourced Crude Oil Historical
Projected
1986 1988 1990 1992 1994 1996 1998 2000 2 2002 2 2004 2 2006 2 2008 2 2010 2 2012 2 2014 2 2016 2 2018 2 2020 2 2022 2 2024 2 2026 2 2028 2 2030 2
0
Source: California Energy Commission 9/9/2011
12
California Crude Oil Imports – Forecast • Crude d oil il imports i are projected j d to increase i in i California lif i due d to: – Continuing decline of California crude oil production • The lower estimate for increased crude oil imports assumes that crude oil production declines by 2.2% per year and an annual reduction of 0.5% in refinery capacity. • The larger estimate for incremental crude oil imports assumes that crude oil production declines by 3.2% per year and no increases in refinery capacity. capacity
9/9/2011
13
Incremental Crude Oil Tanker Visits 160 140 2.0 120 100
1.5
80 10 1.0
60 40
0.5 20 0.0
0 2015 2015
2020 2020
2030 2030
Source: California Energy Commission 9/9/2011
14
Additio onal Crude Tan nker Visits
2.5 Crrude Tanker C Cargo Size (Milllion Barrels)
• Both High and Low projection result in increased tanker visits. • Staff is projecting 12 to 149 additional tanker visits to California by 2030. • High variability in the number of visits is due to storage capacity differences between VLCC and Aframax tankers, k as well ll as import i differences between projections.
Crude Oil Storage Capacity • Storage g capacity p y forecasts are dependent p on cycling y g rates: – The higher cycling rate assumes a rate of 1 million barrels of storage per 23 million barrels of import – The lower cycling rate assumes a rate of 1 million barrels of storage per 12 million barrels of import
• Staff forecasts additional storage tank capacity requirements in the range off 0.6 0 6 to t 5 million illi barrels b l by b 2020, 2020 andd 1 to t 8.6 8 6 million illi barrels by 2030. • Staff estimates the 60% % of this storage g will need to be built in Southern California. • The Low Case projection could be accommodated by existing i f infrastructure, barring b i any storage facility f ili closures. l 9/9/2011
15
Sources of Uncertainty in the Forecasts • Can technological advances and/or expanded access to offshore reserves slow or halt the decline in Californian crude oil production? •
For example: California shale oil reserves estimated at 15.42 billion gallons
• Will new crude oil import facilities be completed in time to maintain an adequate supply of crude oil to California California’ss refineries?
9/9/2011
16
Federal OCS Drilling Scenario • An estimated 5.8 to 15.8 billion barrels of Undiscovered Technically Recoverable Resources (UTRR) crude oil exist off the shore of California, over half in federal OCS. • Mineral Mi lM Managementt S Services i (MMS) estimate ti t th thatt 53% to t 78% off those resources are economically recoverable based on crude oil prices between $60 to $160 per barrel. • Possible constraints to moving forward: – Macondo crude oil spill in the Gulf of Mexico – New infrastructure required to develop these areas
9/9/2011
17
OCS Crude Oil Production Forecast No Moratoria 3
DOE Forecast O
Millions of Barrels Pe er Day
2.5
2
1.5
Atlantic Pacific (California) Gulf of Mexico ‐ Deep Water Gulf of Mexico ‐ Shallow Water
1
0.5
Source: United States Department of Energy
9/9/2011
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
• DOE estimates new production associated with the moratoria areas to begin 2015. • 74% of this increased production is forecasted to originate from the California OCS area. • This increased production has the potential of reducing crude oil imports to levels below 2011 totals under both cases cases. 18
Questions and Comments Q
Ryan Eggers Energy Commission Specialist I Fossil Fuels Office California Energy Commission (916) 651-2920 [email protected] 8/31/2011
19
