Guiding Research For Impact

Energy Security: Technology and Policy Melanie Kenderdine NCSE Energy for a Sustainable and Secure Future Washington, DC February 27, 2006

Energy Trends

Fossil Fuel Consumption, 2002/2025 (% increase/decrease 2002/2025)

N. America

+40%

FSU/ E. Europe

W. Europe

+63% Ind. Asia

+49%

+102%

+43%

Mid. East C/S. America

+113%

Dev. Asia

+146% Africa

+172% Oil

Gas

Coal

Energy Demand

Energy Trends

% Oil/Gas/Coal Reserves

By

Region 36

N. America

27 E. Europe 57 26

18

7

W. Europe

3

5

9

36

30 3 8

Asia/Oceani Middle East C/S. America

8 4 2

6 8 6 Africa

Oil Source: EIA, International Energy Outlook, 2002

Gas

Coal

Energy Supply

Geopolitics

OPEC Imports by Region 2001/2025 Developing World +118% Total World

Industrialized World

60

50

+71%

40

30

+95% +60% +50%

20

+204%

+130%

+232% +633%

10 a

0 N

or

th

Am

ric

pe

e

. W

ro u E

a

i As

d ze

im li R ir a t st fic i o c T du Pa In al

C

g

in ld p r o o el W v e of D t l s e ta R o T

na i h

OPEC Reliance

Geopolitics

Middle East Oil Imports of the US and its Strategic Allies 77% 80 70

53%

60 50 40 30

13%

20 10 0

US

OECD Europe

Japan OPEC Reliance

Geopolitics

Reserve Distribution of LNG Suppliers* Non-OPEC 90+ tcf

OPEC 90+ tcf

Norway

OPEC < 90+ tcf

Non-OPEC < 90+ tcf

1770 tcf Russia

46 tcf 331 tcf Trinidad Venezuela Peru Bolivia

Egypt Algeria Libya Nigeria Angola Eq. Guinea

2812 tcf

Indonesia Malaysia Brunei

Iran Iraq Saudi Arabia UAE Oman Yemen Australia Qatar

Gas Cartel?

US LNG Suppliers, 2003 (bcf/yr.)

Geopolitics

378

Trinidad Algeria Qatar Nigeria

Oman

53 50

Source: Global LNG Market, EIA, 2003

14

9

Malaysia

3 United States

Geopolitics

LNG as Percent of Total Regional Gas Consumption

1% North America

8% Western Europe

97% Asia

Supply Options Will Drive Features of Regional Markets Market Differentiators

Energy Security Challenges Challenge #1

Challenge #2

Challenge #3

Challenge #4

The uneven distribution of oil and gas supplies and productive capacity, nonassured access to those supplies, and volatile energy prices threaten national, regional, and world stability and economies

Environmental stress increases the potential for regional political instability and tensions

The technologies and fissionable material associated with the nuclear power fuel cycle raise the specter of nuclear weapons proliferation

Key and expanding infrastructures required to move energy to demand centers increases their vulnerability to malevolent threats

CHALLENGE #1

The uneven distribution of oil and gas supplies and productive capacity, nonassured access to those supplies, and volatile energy prices threaten national, regional, and world stability and economies

POLICY OBJECTIVE

Develop alternatives to oil

TECHNOLOGY PATHWAY

Gas-to-liquids Biofuels

Diversify oil resources

Heavy oil/tar sands

Reduce oil demand

Higher efficiency vehicles

Change transportation paradigm

Hydrogen vehicles/ infrastructure

Increase/ enhance domestic natural gas supply

Unconventional/ ultradeepwater gas

Access stranded gas resources

LNG safety, efficiency, economics

Efficient turbines, end use

Challenge

A Hemispheric Oil Strategy Canada: 187 billion barrels equivalent tar sands Venezuela: 272 billion barrels heavy oil Saudi Arabia: 250 billion barrels oil reserves

Diversify Supply

Challenge

Developing Conventional/ Unconventional Gas Resources

303

Technically Recoverable Resource Base 1,969 Tcf 284

329

Enhance Gas Supply

Challenges

Challenge #1: Developing Conventional/ % World Gas Reserves By Region Unconventional Gas Resources

Technology Dissemination

GTI Project Management 75 Advisors 20 Companies

Idea Generation

200 Papers Methane from Cost: $140 M over 10 yrs Coal Seams CBM now 10% of domestic Publication production 100 Reports

Workshops, Forums, Symposia 12,000 Attendees Demonstration

40 Major Contracts Managed $140 million investment

3 Major Field Experiments 50 Research Wells Proof of Concept Supply

CHALLENGE #2

Environmental stress increases the potential for regional political instability and tensions

POLICY OBJECTIVE

TECHNOLOGY PATHWAY Advanced vehicles

Increase the efficiency of fossil fuel use

Combined heat and power

Promote carbon capture and sequestration from fossil fuel use

Develop carbonless technologies

Industrial processes Efficient power generation Capture ready technologies Geologic reservoir development Capital cost reduction for nuclear/renewables Nuclear spent fuel management Advanced modular reactors

Challenge

Greenhouse Gas Stabilization Triangle There are 15 options that would achieve a “wedge” each of carbon avoidance. These include:

16 14 12 10 8

r. Y / C 4Gt

1 o t se

a

li t h g i Stra

e r c n ne i

-----

Buildings Coal to CCGT CCS Efficient Power

-- Vehicle Efficiency -- Nuclear Fission -- Wind Electricity

6 4 2

Constant carbon at 7GtC/Yr for 50 years

0 2000

2010

2020

2030

2040

2050

2060 Emissions Reductions

US Policy/Technology Choices in New Energy Law • Promotion of LNG Imports • •

Public Subsidies for Coal and Nuclear Power Generation

Market intervention for IGCC with carbon capture “capability,” not carbon capture “ready” •

Selection of Hydrogen as the Preferred Technology for “Oil Independence”

• Technology Development without “Carrots or Sticks” for Deployment

Additional US Policy Focus is Needed •

Research to monetize smaller stranded gas fields utilizing CNG and other gas maritime transport technologies

•

Deployment of technologies to promote more efficient use of gas

•

Promotion of IGCC technology development, with carbon capture

•

More robust R&D support for ultra-supercritical power technologies

•

Accelerated and effective R&D in carbon sequestration

•

Development of technologies that will promote fossil fuel interchangeability for power generation and transportation

•

Promotion of methane capture as a near-term, low cost means of addressing climate change

•

Development and deployment of more efficient gas turbines, fuel cells, and gas turbine/fuel cell hybrids

•

More robust support for methane hydrates research

Challenge

Holding Fossil Use at 2000 Levels: Can NonFossil Sources Make Up the Shortfall? 1200

Fossil

1000

Non-Fossil

1024

Current Non-Fossil Energy Use: 60 Quads

800 600

727

400

494

200 0 2% /YR

Source: EIA International Energy Outlook, 2001

2.5% /YR

1.5% YR

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