Rayola Dougher - The Coal Institute

Rayola Dougher, API Senior Economic Advisor
Energy: the engine of our economic growth
U.S. oil and natural gas production is increasing as a
result of technological innovations
U S Crude Oil Production
U.S.
(millions of barrels per day)
10
9
8
7
6
5
4
Note: Bars in red show EIA’s Short-term Energy Outlook forecast.
Source: Energy Information Administration.
U.S.
U
S Natural Gas Marketed
Production (billions of cubic feet per day)
75
70
65
60
55
50
45
40
35
30
Crude oil and petroleum product imports have
declined as a share of consumption
70%
60%
50%
40%
30%
20%
10%
0%
Source: EIA
Shale resources are widely dispersed across the U.S.
New technology allows for additional access to
resources
The technology is designed to protect the environment
Shale production is offsetting declining production
from other U.S. oil and natural gas resources
The price of natural gas has fallen relative to crude oil
Changes in the price of crude oil and natural gas
Pric
ce Index: Ja
anuary 2007 = 1.0
3.0
2.5
2.0
1.5
1.0
05
0.5
0.0
Source: EIA
Crude Oil (WTI)
Natural Gas (Henry Hub)
Industrial production expands in response to
competitive advantage of low natural gas prices

Industrial production benefits from strong growth in
shale gas production

Lower natural gas prices lower costs of both raw
material and energy

Chemical and fertilizer facilities are seeing
increased utilization with lower natural gas prices

Energy-intensive industry can be more competitive
in the global market
Shale energy can lead to American prosperity
American
A
i
consumers’’ annuall savings
i
d
due to
t lower
l
gas
prices resulting from shale energy development
(IHS Global Insight)
Shale development equals more jobs
Construction Industry
Drilling Industry
Chemical Industry
Trucking Industry
Hospitality Industry
Steel Industry
Shale development equals more government revenue
Contributed
$74 billion in
2012 and
expected to
grow to $126
by 2020. On
cumulative
basis,
estimated to
generate $1.6
trillion
o in tax
a
revenue
between
2012-2025
The U.S. will require 10 percent more energy in 2040
and more than half of it will be met by oil and gas
120
100
Quadrillion BTU
80
Hydro
Renewables
Nuclear
Coal
Natural Gas
Oil
60
40
20
Source: EIA
2040
2
2034
2
2028
2
2022
2
2016
2
2010
2
2004
2
1998
1992
1986
1980
1974
0
Natural gas and renewables grow as a share of
transportation energy consumption
4%
3%
Source: EIA, AEO 2013
8%
7%
93%
85%
2011
2040
Renewables
Natural Gas
Oil
Most new capacity additions use natural gas and
renewables
Source: EIA,AEO 2013
Billion kilowattthours
Coal-fired plants continue to be the largest source of
U.S. electricity generation
Source: EIA,AEO 2013
Qua
adrillion Btu
Early declines in coal production are followed by
growth after 2016
Source: EIA,AEO 2013
Energy-related carbon dioxide emissions remain
below their 2005 level through 2020
Source: EIA,AEO 2013
87% of federal offshore acreage is off-limits to
development
Development of Canadian oil sands would benefit the
U.S. economy
FILLING AMERICA’S TANK
Within 11 years Canada & U.S.
U S can provide all our liquid fuel needs
Sources of liquid
fuel supply: 2024
24%
10%
13%
Oil from rest of world
10%
Biofuels
18%
Oil from Canada
US oil production
53%
EIA forecast
Sources: EIA; Wood Mackenzie
72%
Potential
The oil and natural gas industry is one of the most
heavily taxed industries in America
Voters voice strong support for increased domestic oil
and natural gas development
94%
Harris Poll Results on Increased U.S. Oil and Natural Gas Development
91%
86%
75%
73%
69%
68%
Importance Lead to more Help lower
Support
Support
Support off- Increasing
of energy
jobs
energy costs building
O&NG
shore
energy taxes
security
Keystone XL development development may hurt
pipeline
consumers
Source: Harris Interactive telephone poll, November 6, 2012
For more information visit:
www.api.org
www
api org
www.energytomorrow.org
www.energycitizens.org