Melanie Kenderdine US Department of Energy
UN Student Energy Summit June 19, 2014
1
Energy Security, Natural Gas, Climate Change: A US Perspective
2
Challenge: Global Energy Consumption 2030
Source: Lawrence Livermore National Laboratory, John Ziagos
680 quads/yr.
Annual per Capita Electricity Consumption
3
“The world will need to consume four times
as much energy by 2100 to raise the
standard of living in developing
nations to that of those in
developed nations.”
Without Policy With Policy
Analysis of Climate Policy Targets Under Uncertainty, Prinn, et al 2009 4
It’s later – and more serious -- than we think
Changes in Precipitation (%) in the 21st century
Source: IPCC, 2007 5
Life Cycle Water Consumption for Electricity Production (gal H2O/MWh)
6
7
894
543
456
347
286
72
54
45
37
19
15
10
7.5
2.4
Biodiesel/corn
Electricity/biomass
Ethanol/cellulose
Ethanol/corn
Ethanol/sugar cane
Wind
Hydropower
Petroleum
Solar Photovoltaic
Natural Gas
Solar Thermal
Coal
Geothermal
Nuclear
Land Use Intensity per Unit of Energy by Energy Source (Km2/TW-hr/year)
McDonald, et al, Energy Sprawl or Energy Efficiency: Climate Policy Impacts on Natural Habitat for the United States of America, 2009 Funded by the Nature Conservancy
Sources: EIA, Richard Newell Presentation, 2010
8
Barnett Shale: 13,5000 Wells Drilled in 12 Years
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Population Density & European
Shale Development
Source: EIA, World Shale Resources , 2011
Poland Shale Basins
Marcellus/Pennsylvania
e i
Poland Population Density
10
In the US, This is Where the “Money” Is!
G-7 Leaders: Energy Security at the Center of Collective Agenda
The use of energy supplies as a means of political coercion or as a threat to security is unacceptable.
The crisis in Ukraine makes plain that energy security must be at the centre of our collective agenda…”
We will ask the IEA…to present by the end of 2014 options for individual and collective actions of the G-7 in the field of gas security
We will…promote a more integrated Liquefied Natural Gas (LNG) market, including through new supplies, the development of transport …and further promotion of flexible gas markets…
11 Excerpt, THE BRUSSELS G-7 SUMMIT DECLARATION, June 5, 2014
Energy Security
G-7 Rome Initiative: Energy Security for the 21st Century
Flexible, transparent and competitive energy markets, including gas markets, should be developed.
Energy fuels, sources and routes should be diversified and development of indigenous sources of energy supply should be encouraged.
Infrastructure modernization will improve energy system resilience. Promoting supply and demand policies will help withstand systemic shocks
Reducing our greenhouse gas emissions and accelerating the transition to a low carbon economy are key contributors to enduring energy security.
Energy efficiency in demand and supply, and demand response management should be enhanced.
Deployment of clean and sustainable energy technologies and continued investment in research and innovation should be promoted.
12 Adapted from Joint Statement, Rome G7 Initiative for Energy Security, May, 2014
Market Development
Resilience
Diversification
Innovation
Competitiveness
Climate Change
Climate Change
Competitiveness
Climate Change
Competitiveness
Energy Equity
Source: Eurogas
c
89 83
80 60
60 59
59 57
56 37
29 24
24 100 100
100 100
Gas Supplied by Russia % of Total Consumption, 2012
Russian gas Non-Russian gas 13
Energy Security
Diversification
Lowering Energy Intensity Can Enhance Energy Security in Countries w/High Russian Imports
14 Source: IEA
Intensity: 2012, USD base, toe/thousand, intensity numbers are rounded
0.08 0.08 0.08 0.09 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.2 0.2 0.2
0.3
0.4
0.8 Country % Gas Russian Imports Energy Intensity Czech. Rep 57 .20 Estonia 100 .30 Hungary 80 .19 Lithuania 100 .17 Poland 59 .20 Slovakia 83 .18 Bulgaria 89 .40 Romania 24 .20 Ukraine 60 .80
OECD avg.
Competitiveness
Climate Change
US Potential Contribution to Global LNG Supplies*
15
Sources: IGU World LNG Report, 2014 , DOE Office of Fossil Energy
Qatar LNGexports
US Volumes Europe LNGimports
WorldwideLNG
consumption
10.30 9.27 4.38
31.59
*Qatar and worldwide volumes are bcf/day in 2013. US volumes are for
approved or conditionally approved export permits as of 5/14
US conditionally-approved export volumes are almost equal to those of Qatar, the world’s largest LNG
exporter
Market Development
52 44
63
7
38 36
66
28 17
33
51
4
23 22
48
18
LNG Regasification Utilization Rates by Country, 2012/2013 (% utilization)
2012 2013
Numbers in parenthesis are 2013 capacity in mmt/a (1mmt = 47.6 bcf)
2013: Disconnected from crude prices
Because of large Asian/ European LNG price spreads, LNG cargoes are moving to Asia. Utilization rates of European regasification facilities have dramatically declined.
Benchmark Natural Gas Prices: U.S., Europe, Asia, 2013, forecasts to 2030
$16.87
$16.72
$12.82
$5.49
2013
2030
16
39% decline 62% decline
24% decline
19% decline
Brent: $16.87
Asian Term: $14.80
Eur. Spot: $10.59
Henry Hub: $3.61
2013: Tracking Crude
Importance of Regional LNG Pricing to Global Destinations of LNG Supplies
Shut down of nuclear reactors post- Fukushima has increased competition for fossil fuels worldwide.
Market Development
Source: International Gas Union
A mild winter that reduced household heating demand A decline in coal-fired electricity generation, due largely to historically low natural gas prices Reduced gasoline demand
17 Source: EIA Website
US CO2 emissions lowest in 20 years
Coal to Gas Fuel Substitution Benefits, contd.
Climate Change
18
PM on the Quadrennial Energy Review
“Affordable, clean, and secure energy and energy services are essential for improving U.S. economic productivity, enhancing our quality of life, protecting our environment, and ensuring our Nation's security. Achieving these goals requires a comprehensive and integrated energy strategy resulting from interagency dialogue and active engagement of external stakeholders. To help the Federal Government better meet this responsibility, I am directing the undertaking of a Quadrennial Energy Review.”
President Barack Obama January 9, 2014
Draft / Pre-Decisional / Not for Distribution 19
Near and Long-term Infrastructure Vulnerabilities Are Growing
Climate Change: weather related power outages have increased from
5-20 each year in the mid-1990s to 50-100 per year in the last five years.
Cyber-security: 53% of all cyber-attacks from October 2012 to May
2013 were on energy installations.
Physical Threats: There were three highly visible attacks on grid
infrastructure in 2013. Supply chains for key components of grid infrastructure are not robust.
Interdependencies: The interdependencies of the
electric and fuel infrastructures seen in Superstorm Sandy greatly complicated the response and recovery.
Supply/demand Shifts: The lack of pipeline
infrastructures for associated gas in the Bakken has resulted in large-scale flaring of this gas, in amount sufficient to be seen from space.
Recent Events Illustrate U.S. Energy Sector Vulnerability to Climatic Conditions
Cooling water intake or discharge too hot: Shutdown and reduced generation from power plants
Water restrictions due to drought: Limiting shale gas and power production
Wildfires: Damaged transmission lines
Lower water levels: Reduced hydropower
Lower river levels: Restricted barge transportation of coal and petroleum products
Intense storms: Disrupted power generation, distribution and oil and gas operations
Flooding: Impacts on inland power plants
20 Source: U.S. DOE (2013), U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather.
Supply/Infrastructure Geography Changing Rapidly
2010 Crude Oil by Train Loading (red) and Offloading (blue)
Facilities
2013 Crude Oil by Train Loading (red) and Offloading (blue)
Facilities
Source: Final SEIS, Keystone XL Project; Chapter 1.4, Market Analysis.
22
Growth in Oil Transport by Rail