Energizing America: Facts for Addressing Energy Policy

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Ports-to-Plains Energy SummitOmni Interlocken ResortBroomfield, COApril 7, 2011Lunch KeynoteJohn Felmy, Chief Economist, American Petroleum Institute

Transcript of Energizing America: Facts for Addressing Energy Policy

Page 1: Energizing America: Facts for Addressing Energy Policy
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$0.50

$1.50

$2.50

$3.50

$4.50

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 Mar '11

pric

e pe

r ga

llon

4/6/2011Diesel (AAA) $4.02Gasoline (AAA) $3.73Crude Oil (NYMEX) $2.59

Diesel, Gasoline and Crude Prices

Source: NYMEX (WTI crude oil) and AAA (gasoline and diesel)

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8/262.682

4/63.725

+104.3

8/241.7055$71.638/25cbot

$1.829

2.5912+88.57$108.83

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8/1/2010 9/1/2010 10/1/2010 11/1/2010 12/1/2010 1/1/2011 2/1/2011 3/1/2011 4/1/2011

Gasoline and Crude Oil PricesAAA, NYMEX

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7/17/084.114

12/29/081.616

1/20/091.848

3.725+187.7

7/14/083.4567145.18

12/19/080.8064$33.87

1/20/090.9224$38.74$1.612

2.5912+166.88$108.83

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Gasoline and Crude Oil PricesAAA, NYMEX

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Oil prices relate to many uncertain factors

Speculation, hedging, investment

Global economic growth

OPEC production decisions

Exchange rates and Inflation

Spare production capacity

Global Oil Prices

Non-OPEC supply growth Inventories

Geo-political risks

Weather

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86.7

86.1

85.0

87.9

89.4

82

83

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90

2007 2008 2009 2010 2011

World Oil DemandIEA - MMBD

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2.0%

0.4%

4.3%

2.2%

7.7%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

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8.0

9.0

Total Gasoline Diesel Jet Fuel Residual

Change in U.S. Petroleum Demand 2010 vs 2009

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World Liquid Fuels Consumption

EIA, Short-Term Energy Outlook, March 2011

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OPEC Surplus Crude Oil Production Capacity

EIA, Short-Term Energy Outlook, March 2011

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Source: EIA, Short-Term Energy Outlook, March 2011

2009 2010 2011 2012 09-10 10-11 11-12WTI Crudea

($/barrel) 61.65 79.4 101.77 104.75 28.8 28.2 2.9Gasolineb

($/gal) 2.35 2.78 3.56 3.57 18.4 27.9 0.5Dieselc

($/gal) 2.46 2.99 3.81 3.82 21.5 27.4 0.2

Heating Oild ($/gal) 2.52 2.97 3.7 3.9 17.7 24.6 5.3Natural Gasd

($/mcf) 12.12 11.18 11.2 11.92 -7.8 0.2 6.4

Electricityd

(cents/kwh) 11.55 11.58 11.69 11.74 0.2 1 0.5

Percent Change

a West Texas Intermediate. b Average regular pump price.c On-highw ay retail. d U.S. Residential average.

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72

Percent of Source

Percent of Sector

94Petroleum35.3

Petroleum35.3

Natural Gas23.4

Coal19.7Coal19.7

RenewableEnergy

7.7

NuclearElectric Power

8.3

Transportation27.0

Industrial18.8

Residential, Commercial

10.6

ElectricPower38.3

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37.4%37.4%

24.8%

20.9%20.9%

8.2%

8.8%

Quadrillion BTUs Quadrillion BTUs

28.5%

19.9%

11.1%

40.4%

Percent Percent

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72 94Petroleum35.3 Transportation

27.0

Industrial18.8

Residential, Commercial

10.6

ElectricPower38.3

Percent of Source

Percent of Sector

EIA: Annual Energy Review 2009

28.5%

19.9%

11.1%

40.4%

37.4%37.4%

Percent PercentQuadrillion BTUs Quadrillion BTUs

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72

Percent of Source

Percent of Sector

94Petroleum35.3

Petroleum35.3

Natural Gas23.4

Coal19.7Coal19.7

RenewableEnergy

7.7

NuclearElectric Power

8.3

Transportation27.0

28.5%37.4%37.4%

24.8%

20.9%20.9%

8.2%

8.8%

Percent PercentQuadrillion BTUs Quadrillion BTUs

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72

Percent of Source

Percent of Sector

94Petroleum35.3

Petroleum35.3

Natural Gas23.4

Coal19.7Coal19.7

RenewableEnergy

7.7

NuclearElectric Power

8.3

Transportation27.0

Industrial18.8

Residential, Commercial

10.6

ElectricPower38.3

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37.4%37.4%

24.8%

20.9%20.9%

8.2%

8.8%

Quadrillion BTUs Quadrillion BTUsPercent

0.2%

23.6%

36.4%

35.3%

4.5%

Elec. Flow

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1.40

10.50

10.70

11.20

12.40

18.20

22.50

0.00 5.00 10.00 15.00 20.00 25.00

Increase G&G Amortization Period

Reinstate Superfund Taxes

Modifications of Dual Capacity Rule

Repeal of Percentage Depletion

Repeal Expensing of Intangible Drilling Costs

Repeal of Sec. 199 for Oil and Natural Gas Companies

Repeal LIFO

Oil and Gas Tax Increases in 2012 BudgetBillion $

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Capital Spending

Source: Oil and Gas Journal, March 7, 2011

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