Challenges and Opportunities of the North American Petroleum - - PowerPoint PPT Presentation
Challenges and Opportunities of the North American Petroleum Justin Kringstad Trisha Curtis Renaissance Trisha Curtis, Director of Research, Upstream and Midstream Lou Pugliaresi, President Energy Policy Research Foundation, Inc. (EPRINC)
Trisha Curtis, Director of Research, Upstream and Midstream Lou Pugliaresi, President Energy Policy Research Foundation, Inc. (EPRINC) Oxford Institute for Energy Studies January 30th, 2014
Justin Kringstad Trisha Curtis
About EPRINC
studies intersection of energy economics and public policy, with emphasis on oil, natural gas, and petroleum product markets
private sector and project support from US Government
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EPRINC Embassy Series
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energy policy community
diplomatic community to provide both an interesting venue and constructive policy discussion
to gain a greater understanding of U.S. energy policy in an era of expanding U.S. supplies of oil and gas
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2 4 6 8 10 12 14 16 18 20 2013 2015 2017 2019 2021 2023 Million Barrels per Day Saudi Arabia Russia USA Iraq Canada
Source: Wood Mackenzie (includes NGLs)
Importance of the North American Lens
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U.S. Imports of Crude Oil and Petroleum Products as a Percent of GNP
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Source: KBC Advanced Technologies
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Average Projected Relative Manufacturing Costs for 2015
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Major Global Challenge: Managing OPEC Spare Capacity
Tight oil and Iraq are wild cards here Regional Rivalries and Downside Price Risk Million barrels/day
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Source: EIA
Volumes of North American Crude Oil
(discussion)
1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Periphery Permian Eagle Ford Bakken EPRINC's May 2013 Forecast
Jan 2014 EPRINC’s Forecast for Major U.S. Shale Plays
Source: HPDI data with EPRINC forecast estimates
EPRINC forecasts an additional 2.5 mbd by 2020
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2000 4000 6000 8000 10000 12000 1980 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 2011 2012 201… U.S. Imports from Canada of Crude Oil Mbbl/d U.S. Field Production of Crude Oil Mbbl/d U.S. Imports of Crude Oil Mbbl/d
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U.S. Total Imports, U.S. Production, U.S. Canadian Imports
Source: EIA
U.S. Imports 7.8 mbd U.S. Production 7.7 mbd Canadian Imports 2.6 mbd
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Source: HPDI January 18 2014, Past 90 Days
Wil illi liston Ba Basin in Powder Riv River Ba Basin in Uin Uinta Ba Basin in DJ DJ Ba Basin in (Ni
(Niobrara R Reser servoir ir)
An Anadarko Ba Basin in
(M (Mis issi sissi ssippian, ian, Granit ite Wash, sh, Mis issi sissi ssippi i Lime ime and other st stacked plays) plays)
Permi mian Ba Basin in Ea Eagle le Ford Reservoir ir Ut Utica ica
Permit Activity
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Source: From PIECE Course Workbook, Mark J Kaiser, Houston, July 2008, “Introduction to USA Petroleum Industry”
Source Rocks and Reservoir Rocks
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Accumulations
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Source: EPRINC
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Source: EIA
500 1000 1500 2000 2500 3000 Jan-81 Apr-82 Jul-83 Oct-84 Jan-86 Apr-87 Jul-88 Oct-89 Jan-91 Apr-92 Jul-93 Oct-94 Jan-96 Apr-97 Jul-98 Oct-99 Jan-01 Apr-02 Jul-03 Oct-04 Jan-06 Apr-07 Jul-08 Oct-09 Jan-11 Apr-12 Jul-13 Thousand Barrels Per Day North Dakota Field Production of Crude Oil Mbbl/d Alaska Field Production of Crude Oil Mbbl/d Colorado Field Production of Crude Oil Mbbl/d California Field Production of Crude Oil Mbbl/d New Mexico Field Production of Crude Oil Mbbl/d Texas Field Production of Crude Oil Mbbl/d
Source: Baker Hughes
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500 1,000 1,500 2,000 2,500 # of Rigs Oil Gas Total
Source: NationalAtlas.gov
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Source: HPDI Nov 2013
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Source: HPDI Nov 2013 500000 1000000 1500000 2000000 2500000 3000000 3500000 4000000 4500000 200000 400000 600000 800000 1000000 1200000 1/1/2005 4/1/2005 7/1/2005 10/1/20… 1/1/2006 4/1/2006 7/1/2006 10/1/20… 1/1/2007 4/1/2007 7/1/2007 10/1/20… 1/1/2008 4/1/2008 7/1/2008 10/1/20… 1/1/2009 4/1/2009 7/1/2009 10/1/20… 1/1/2010 4/1/2010 7/1/2010 10/1/20… 1/1/2011 4/1/2011 7/1/2011 10/1/20… 1/1/2012 4/1/2012 7/1/2012 10/1/20… 1/1/2013 4/1/2013 7/1/2013 Thousand Barrels Per Day LIQ GAS
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Source: HPDI Oct 2013 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1800000 2000000 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/19… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… 1/1/20… Thousand Barrels Per Day LIQ GAS
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Source: EPRINC
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Source: NDIC
North Dakota accounts for almost 10% of US Production Almost all new production is from the Bakken/Three Forks
200,000 400,000 600,000 800,000 1,000,000 1,200,000 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 North Dakota Eastern Montana South Dakota TOTAL
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Source: Triangle Petroleum Corporation, Presentation Bakken Product Markets and Take-Away Denver Jan 31-Feb 1 2012
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Source: HPDI, Bakken
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Source: EPRINC Choke Point Map using Hart ArcGIS Mapping software
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Source: Canadian Energy Pipeline Association
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capacity-recent announcements to expand up to 800,000 b/d (early 2017)
River 280,000 b/d-full
transporting over 1.5 mbd with potential capacity around 2.5 mbd— Northern Gateway off BC coast planned 525,000 b/d, several other planned expansions, light oil access +400,000 b/d
b/d-full—XL would add 700,000 b/d, Energy East Pipeline Project 500 to 800k
Source: CAPP Crude Oil Forecast June 2013
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10 20 30 40 50 60
2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 PADD 1 East Coast PADD 2 Midwest PADD 3 Gulf Coast PADD 4 Rockies PADD 5 West Coast Number of Refineries Barrels Per Calendar Day Operable Atmospheric Crude Oil Distillation Capacity Thermal Cracking Coking Downstream Charge Capacity Operating Refineries
Where light sweet Bakken and heavy (blended bitumen) needs to go…
Source: AFPM map, EIA data for graph
Total Coking Capacity vs. Atmospheric Crude Distillation Capacity by PADD Cokers = Heavy refining capability
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Source: Flint Hills, EIA, CME Group, and estimates
Select -$18.50 to WTI
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$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Jan-13 Jun-13 Nov-13 WTI Bakken (North Dakota Light Sweet Flint Hills) WCS (Western Canadian Select) Brent
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Source: AAR; Crude and petroleum product includes liquefied gases, asphalt, fuel oil, lubricating oil, jet fuel, etc. U.S. operations exclude U.S. operations of CN and CP. Canadian operations include CN and CP and their U.S. operations. One carload holds 30,000 gallons (or 714.3 barrels). 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Jan 08 Mar 08 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11 Mar 11 May 11 Jul 11 Sep 11 Nov 11 Jan 12 Mar 12 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Barrels Per Day U.S. Average Barrels Per Day of Petroleum and Petroleum Product Canadian Average Barrels Per Day of Petroleum and Petroleum Product EPRINC's U.S. Daily Crude by Rail Estimate - 900,000 b/d EPRINC's Canada Daily Crude by Rail Estimate - 160,000 b/d
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Source: EPRINC Maps using Hart Energy data and ArcGIS Mapping software
Keystone XL and lack of historical build out to the coasts – system designed to import into the Gulf and move up
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and other petroleum products
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Source: North Dakota Pipeline Authority
November 2013 Estimates January 2012 Estimates
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LAC MAGENTIC: AP PHOTO/THE CANADIAN PRESS, PAUL CHIASSON
in Lac-Mégantic, Quebec, killing 47 people and destroying parts of the town
train of 90 cars carrying crude oil near Aliceville, Alabama (45 miles SW Tuscaloosa). Nobody was injured, but three of the cars exploded.
near Casselton,(SE) ND hitting a 106 car unit train of crude oil which caused 18 crude tank cars to derail causing a massive explosion and fireball
tracks in Plaster Rock, New Brunswick. 15 cars derailed and caught fire. The train was carrying propane and crude oil from Western Canada
Pennsylvania on a railroad bridge and close a busy expressway (Schuylkill), but did not leak any crude
http://usnews.nbcnews.com/_news/2013/12/30/22113442-mile-long-train- carrying-crude-oil-derails-explodes-in-north-dakota?lite
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Source: EIA
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20 40 60 80 100 120 140 160 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 $/Barrel East Coast (PADD 1) Crude Oil Composite Acquisition Cost by Refiners $/bbl Midwest (PADD 2) Crude Oil Composite Acquisition Cost by Refiners $/bbl Rocky Mountain (PADD 4) Crude Oil Composite Acquisition Cost by Refiners $/bbl West Coast (PADD 5) Crude Oil Composite Acquisition Cost by Refiners $/bbl Gulf Coast (PADD 3) Crude Oil Composite Acquisition Cost by Refiners $/bbl Brent
20 40 60 80 100 120 % Percent Utilization East Coast (PADD 1) Percent Utilization of Refinery Operable Capacity % Midwest (PADD 2) Percent Utilization of Refinery Operable Capacity % Gulf Coast (PADD 3) Percent Utilization of Refinery Operable Capacity % Rocky Mountains (PADD 4) Percent Utilization of Refinery Operable Capacity % West Coast (PADD 5) Percent Utilization of Refinery Operable Capacity %
Source: EIA
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Recycling
failing to connect what is happening on the ground to what is understood in Washington
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Source: NDPA
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Source: Bentek
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Typical 2012 North Dakota Bakken well will produce for 29 years (enhanced oil recovery efforts could extend the life of the well) In those 29 years the average Bakken well:
Source: ND Department of Mineral Resources 2012 Presentation