U.S. Russia Business Council

U.S. Russia Business Council

18th Annual Meeting

October 21, 2010San Francisco

Panel Discussion on The High Tech Dimensions of ‐Energy

Lucian Pugliaresi Energy Policy Research Foundation, Inc

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

2Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

•World to Face Large Scale Shortages in Refining Capacity

•No Major Large Scale Additions Likely in Petroleum Reserves (peak oil) – prices will rise to well over $100/bbl.

•U.S. to Face Natural Gas Shortages – Massive Commitment to Domestic LNG Receiving Facilities

•Latin America has been Fully Explored

Conventional Wisdom -- Just 5 Short Years Ago

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

Source: U.S. Energy Information Administration

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

© OECD/IEA 2010

Energy Demand in Russia 2007 v 2030(World Energy Outlook 2009, Reference Scenario)

Fuel 2007 2030Coal 15 20Oil 20 18Gas 55 50Nuclear 6 8Hydro 2 2Renewables 1 2

Fuel 2007 2030Coal 17 26Oil 2 1Gas 48 38Nuclear 16 17Hydro 17 14Renewables 0 3

Primary Energy Demand, %

Electricity generation, %

6

World LNG and Unconventional Gas Production

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

7

U.S. Proven Gas Reserves Since 1980

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20080

50000

100000

150000

200000

250000

300000

tcf

~50% increase in 8 years – nearly all

from shale gas

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org

8

The Peak Oil Problem:How Serious?

9

Permian BasinTesting Hubbard-Method Predictions for Reserves and Production

(Billions of Barrels)

Cumulative Discoveries

17.6 27.9 35.2

Percent Attributable to 1950

85% 86% 84%

Cumulative production as of 19-27.5 28.5-30.5 35.8-37.5

Year 2000 production projected in: (mb/d)

162-479 326-479 910(actual)

1964 1982 2000

Source: EPRINC, October 2006. Does the Hubbard Method Provide a Reliable Means for Predicting Future Oil Production, Richard Nehring, October 2006,

Energy Policy Research Foundation, Inc. | 1031 31st St, NW Washington, DC 20007 | 202.944.3339 | www.eprinc.org